By William J. Des Rochers, Fluvanna Field Officer
Supervisors Don Weaver (Cunningham) and Gene Ott (Rivanna) requested a special meeting of the Board of Supervisors on November 24th to discuss a potential outside review of the $71 million bond proposal for the new high school. The proposal was rejected by a 4-2 vote.
Mr. Ott, who presented the case for an outside review, drew extensively from a pamphlet published by the National League of Cities. Entitled Questions to Ask About Your Municipal Bond Financing Options, the publication provided a checklist of things local governments should avoid.
Ott contended that the county did not place itself in a favorable position by relying exclusively on Davenport & Company for advice and assistance in the school bond placement. Specifically, Ott criticized the relationship because:
· Davenport & Co. also underwrites bonds;
· The firm will receive advisory fees ($170,000) based upon a percentage of the bond offering;
· The county lacks assurances that Davenport is not deal trading, i.e. recommending a competitor’s underwriting services in a negotiated deal with the expectation that the competing underwriter will later reciprocate; and,
· The advisor recommended a “stand alone” bond issue instead of a pooled arrangement.
Ott stated that concerns were “red lights” that are not in the county’s interest, and therefore the county should seek outside advice before going to the market.
Once again, a well-organized group of citizens attended the meeting and overwhelmingly spoke in favor of caution and urged the supervisors to seek a second opinion on the bond process. Fifteen of eighteen citizens supported an outside review, while the three who urged the Board to proceed praised the county administrator [G. Cabell Lawton IV] and Davenport’s expertise in the matter.
As predicted by several sources prior the meeting, the Board rejected the proposal by a 4-2 vote. Supervisor Mozell Booker (Fork Union) doubted that in this economic climate, there were any experts: “show me the experts, where are they?” she asked.
Supervisor John Gooch said he suspected that some did not want a second opinion but rather just wanted to wait. He suggested that this could well be a good time to go to the market because construction costs are declining. He stated: “the tax burden will not go away, even if we wait a year”.
Supervisor Marvin Moss, who along with supervisor Charles Allbaugh, went to New York with Davenport earlier this year to obtain a bond rating, praised the company’s expertise and said that it is highly respected by other local governments throughout the state.
The vote to proceed with the bond sale means that the county likely will negotiate a bond sale with Wachovia in the early part of December.