Like the Town, County looking at alternate capital improvement financing options

Also on January 22 the Warren County Board of Supervisors unanimously endorsed a resolution authorizing bond consultant Davenport & Company of Richmond to explore alternate financing options on three capital improvement projects (CIP).

Those projects are the largely completed Ressie Jeffries Elementary School renovations (estimated cost $5,374,198); additional renovations to the Health and Human Services Complex in the old middle school/Mosby Academy building to house the Brighter Futures alternative education program and County Voting Registrar’s Office (estimated cost $2,698,588); and construction of a new Rivermont Fire Station (estimated cost $7 million). During discussion it was noted that the Rivermont Fire Station project is about to go out to bid.

New financing options are necessary in the wake of the loss of the anticipated New Market Tax Credit (NMTC) funding option the County, like the Town, had anticipated being available through the Front Royal-Warren County Economic Development Authority. However, as the town government found out regarding financing its new $10.5-million police station slated to be completed this March, none of the CIP projects both municipalities had on the table for the EDA’s NMTC application for an approximate $27-million loan package qualified for that interest-reducing financing program. Interest is abated during the first 7 to 9 years of NMTC loan paybacks, significantly reducing the total debt service.

The reason that New Market program option was lost, as recently explained to the Town, was that the last round of New Market Tax Credit loans were aimed at permanent job-creating projects. It seems apparent that there was a communications breakdown between the Town, County and the EDA on the viability of the local NMTC application process and status for this round of projects.

Primary financing options cited in the County Resolution are through the Virginia Resources Authority’s (VRA) Pool Financing Program, direct bank financing, and at the suggestion of Davenport’s Ted Cole at the January 22 meeting, the Virginia Public School Authority Pool (VPSAP). Cole noted that the Ressie Jeffries project might qualify under that public schools financing option. Statewide pool options seek better interest rates by coupling projects from multiple municipalities together.

See the financing discussion on this Royal Examiner video: