Falls Church City Council members Ira Kaylin and David Snyder verbalized anxieties over Monday’s 634-point drop in the Dow Jones Industrial Average and on-going volatility in the markets at the Council’s work session Monday night. Kaylin, formerly in the banking business, cautioned that the Council should be prepared for what could be further significant losses in the City’s pension fund investments resulting from a further drop in the market.
He also expressed concern that the recent downgrade of the U.S. credit rating by Standard and Poor’s could have a domino effect on the Commonwealth of Virginia and localities such as Falls Church. However, he also noted that, as a proportion of its budget, Falls Church relies far less on federal and state support than other jurisdictions in the state, making it better insulated from their fates. Snyder, who is in the insurance business, tempered Kaylin’s remarks by stating as long as there remains an economic recovery, no matter how slow, the City should not suffer significant negative consequences from the wider economy.
It was noted that the City’s debt situation is sound, especially when compared with other jurisdictions, and the City has maintained its commitment to its formally adopted policy of limiting its debt to a small percentage of its annual operating budget.