Tag Archives: bonds

Greene Supervisors Approve $28.16 Million School Bond

By. Brent Wilson, Field Officer

The Greene County Board of Supervisors took the final step to approve going forward with a general obligation school bond not to exceed $28.16 million at their August 22nd meeting. . Virginia Public School Authority (VPSA) will purchase the bonds by the fall of this year.

The agenda item was presented during a public hearing – but no one showed up to comment. Chairperson Michelle Flynn (Ruckersville) took this to be a favorable commentary on the open process for the past two years leading up to tonight. She also indicated that she has received only positive feedback related to the project. Former Chairperson Bill Martin (Stanardsville) echoed the same sentiment and that the project will be good for the community and the school system.

Supervisor Jim Frydl (Midway) is the Board’s liaison to the schools and has been involved in the process over the past 30 months. He further stated that high schools are the most expensive schools to build and the project to renovate the high school and other schools in the Greene County School System is the most efficient way to provide quality educational facilities. At the same time, the study was a forward looking process with a look toward 20 years into the future.

Finally, Flynn said that the best way she could summarize the process is to quote Supervisor David Cox (Monroe) – “do it once and do it right”.


Greene County School System Project

The gross cost of the project of $28.16 million will cost nearly $41 million ($1.63 million x 25 years) assuming an interest rate of 3 % over 25 years. The accumulated Capital Fund Balance of $2.814 million represents excess tax revenue that taxpayers have paid in previous years. When Supervisor Dale Herring (At-Large) was asked if these funds should be used to help pay for the project, he indicated that Tracy Morris, Finance Director and Stephanie Deal, Treasurer indicated that these funds should be released over a period of time and not in a lump sum.

This raises the question – why?

Herring also indicated that the project will solicit quotes from multiple vendors and the project may cost less than the architects estimated – $28.16 million.

Logically, spending the $2.814 million at the beginning of the project would reduce the need for new tax revenue. Plus this is tax revenue already collected from taxpayers. One explanation not to spend it all up-front, has been that the unspent capital needs to be held back for unexpected capital requirements. That may be true to some degree, but it seems excessive to some observers.

The other comment in response to spending the $2.814 million excess capital is it would draw down cash too far. This seems to beg the question, how low should the cash balance be allowed to get down to – especially right before personal property taxes are collected in June and December (the lowest points each year).

The county has a Reserve Fund target, which includes cash and all assets which their auditors have recommended. But you can’t write checks against total assets, you have to have cash in the bank. As nationally known financial advisor Dave Ramsey advises – you need 3-6 months of living expenses on hand for emergencies.


Dave Ramsey, Financial Advisor

Perhaps Greene County could look to live by Dave’s advice.

If the Board is so inclined, they could easily agree on a transparent Cash Reserve Fund calculation so that a clear, well thought out policy can be developed.

Such a policy could provide the data to clearly determine how much cash could be spent to pay for the school project from excess capital funds. The concerns raised by the Treasurer and Finance Director are testament that there needs to be some safeguard – but it should be formalized. The current board may not spend too much but who is to say that a future board may be too aggressive and get the county back on the edge of bankruptcy.

The final question is – who determines if spending is to be made from the excess capital funds that the school system has accumulated. Per Herring, while the funds are designated for school capital funds, it is part of the overall county reserve position.

Currently, the determination of the usage of the excess capital reserve has not been decided. This needs to be clearly defined so that funds can be easily consumed when needed and done in conjunction with a Cash Reserve Policy so that the county doesn’t revert back to where it was several decades ago – nearly bankrupt.

Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.  The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at www.freeenterpriseforum.org

Photo Credit: Greene county, Dave Ramsey


Greene Supervisors Endorse Schools Project Fund Application

By. Brent Wilson, Field Officer

Last night (7/25), the Greene County School Board presented their Phase I proposal for updating the Greene Schools facilities to the Board of Supervisors. The School Board requested the Supervisors endorse the Virginia Public School Authority (VPSA) application for funding for the project . VPSA offers options for market financing with competitive interest rates.

clip_image004Greene County Schools Superintendent Andrea Whitmarsh addressed the Board and summarized the process that began 31 months ago with the formation of a community committee to review all the school facilities in the county and make recommendations. The total recommendation is broken down into three phases with Phase I currently being requested for funding.

Kristie Spencer, Director of Business and Facilities added the retirements by year to her previous financial presentation. And then she showed the impact of consuming the $2.81 million excess capital funds that have been accumulated by underspending schools budgets in the past few years.


Kristie Spencer

Spencer also pointed out that the first payment would not have to be made until July, 2018, which will allow for more debt to be paid down. Per Spencer, there are several options on how to structure the debt repayment that VPSA may allow. The length can be 25 or 30 years, the debt could be back loaded, etc. Greene County can make suggestions but the final decision is made by VPSA.clip_image008

Supervisor Bill Martin (Stanardsville) asked Spencer why would the school board not use the excess capital funds to reduce the higher debt in the beginning of the repayment schedule?

Spencer stated that there may be other capital projects to use the funds. Martin suggested using the $2.81 million excess capital funds for the school project since it would have a large financial impact at the beginning of the repayment schedule, until more debt is paid off.

Supervisor Jim Frydl (Midway) thanked Spencer for the detailed planning with all of the options presented in a format easy to understand. Supervisor Martin complimented Frydl on his idea several years ago to accumulate unspent funds for future capital projects.

Jim Frydl

Frydl asked Whitmarsh if the Supervisors agreed to endorse the VPSA application could the project be put out to bid? Robert Moje, one of the principals of VMDO, the architects working on the project – agreed that it is important to move forward quickly to minimize cost increases and raising interest rates. However, funds must be available in order to enter into contracts.

Spencer indicated that there are still several steps to occur and that it would be November, 2017 before the bonds would be sold and the costs finalized.  Moje clarified that this should be accomplished by November 6th.

Frydl asked Moje how long he expected the request for bids to be out. Moje said that it typically takes a month with the goal to have the funding and the quotes come in at the same time. Supervisor Dale Herring (At-Large) asked Moje if he expected any problems in getting bids for the project. Moje anticipated that the project should get multiple bids.

Chairman Michelle Flynn (Ruckersville) stated that Greene County doesn’t have other separate facilities – and therefore the school buildings are very important assets beyond their primary function of providing classrooms to the students. The Board unanimously agreed to approve the request of the School Board to endorse the VPSA application.

Finally, as Moje was departing the meeting, he addressed the Board and said that it is rare that a community works as well together as Greene County did on this project.

Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.  The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at www.freeenterpriseforum.org

Fluvanna Supervisors Consider Bond Financing and Refinancing

By. Bryan Rothamel, Field Officer

The conditions are starting to come together for Fluvanna County to make a decision on water infrastructure.

One of the biggest hurdles is how to finance it and right now, bond rates are extremely low.

Fluvanna Supervisor Tony O'Brien

Fluvanna Supervisor Tony O’Brien

“You are never going to see money this cheap right now,” Tony O’Brien (Rivanna District) said following a presentation from Raymond James & Associates, the county’s financial advisor.

Dianne Klaiss, senior vice president of Raymond James & Associates, agrees with O’Brien’s assessment, “If you have to do a capital project, now would be a good time to finance it.”

Rates were their lowest in history November 2012 and have stayed below the historical average since.

Unfortunately, another hurdle in adding to the county’s debt load is its financial history. In FY15, the current fiscal year, the county is paying $7.62 million for debt service. The total budget is $80 million but includes borrowing another $12.48 million.

Two previous projects are eligible for refinancing and the advisor is recommending the board start the process of doing so.

The Series 2005 bonds issued for the courthouse is at 4.29 percent interest rate and has a current balance of $1.86 million. It is subject to acceleration on Oct. 15, 2020 with a $720,000 final balloon payment in 2026. The county is currently scheduled to pay $2.51 million for the rest of the bond.

The two options to refinance the Series 2005 bonds is to have the same maturity date or to match the current debt service payment. Both will have a savings over the course of the loan compared to the current agreement.

Keeping the same maturity date would have a $204,000 savings but mean higher payments until 2026. Refinancing to keep the $162,000 payment of this year means only saving $157,000 but extending the maturity date to 2029.

The other bond is the Series 2006 bonds for the library. It matures in 2022 but has $1.75 million left. The county is currently scheduled to pay $2.07 million over the course of the bond. A refinance could save $116,000 overall with the same maturity date.

This fiscal year the county is considering paying for a fire truck and projects at the middle school with two bonds.

A fire truck bond of $550,000 would have a maturity in 2025 with annual payments of $65,000. The middle school bond projects are for $5 million with debt service payments around $500,000, changing depending on the bond length choice of 10, 15 or 20 years.

The Board of Supervisors is expected to take up the refinancing of the first two bonds and issue the other two bonds soon.


bryan-rothamelThe Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS® and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

Photo Credit: Fluvanna County

Fluvanna Approves School Borrowing

By William J. Des Rochers

Fluvanna Field Officer

Fluvanna’s supervisors agreed to borrow up to $75.5 million to finance the construction of the new high school.  Previously the Board borrowed $7.5 million for the project.  Of that amount, approximately $61 million is dedicated for high school construction; the remaining portion would be for deposits and fees. 

The actual amount borrowed will depend upon market conditions at the time of the sale, but is expected to be between $65-$70 million according to Mr. David Rose, the bond counsel.  The county expects to go to the market the week of September 21st. 

Supervisors also agreed to refinance $7.5 million of previous school construction debt in order to reduce interest charges to the county.

There was a lot of discussion regarding the size of the loan, particularly since the supervisors previously agreed to a maximum $71 million for on high school construction.   Supervisor Don Weaver (Cunningham) criticized the county administration’s advertizing a $75.5 million cap on the borrowing since the Board never approved that amount.  Rose’s later explanation of the loan package seemed to mollify the concern.

Supervisor Charles Allbaugh (Rivanna) offered to support a motion to lower the authorized amount, but no supervisor offered an amendment to reduce the limit.


Board Nixes Rezoning

In a somewhat surprising decision, supervisors denied a request by the Fluvanna-Louisa Housing Foundation to rezone a property in Fork Union that would have provided two units of affordable housing instead of the one that currently exists by right.

Citizens and local residents opposed the request – over fifty signed a petition against the proposal – charging that it could endanger the Omohundro well, which provides around one-third of the water to residents of the Fork Union Sanitation District.

Mr. Howard Evergreen, the director of the Foundation, told the supervisors that water safety was not an issue.  According to Mr. Evergreen, the state health department had given its approval and he said:  “If you don’t approve it [the rezoning], you are saying you know more than the state heath department”.

Moments later, he also told the Board:  “If you want to turn us down, then tell us you don’t want affordable housing”.  Supervisors did not tell him that, but did turn down the request 3-2.  Supervisors Gooch (Palmyra), Ott (Rivanna), and Weaver voted against the request.  Supervisor Booker (Fork Union) abstained since she is a member of the Housing Foundation.

Other Board Actions

Among other actions, the supervisors:

·        Approved an application by Serenity Partners (Palmyra) to rezone 14.8 acres from A-1 (Agricultural, General) to I-1 (Industrial, Limited) for industrial uses in the Zion Crossroads area;

·        Approved amendments to the county zoning ordinance so as to require a special use permit for private community water and wastewater treatment systems.  The county lost a lawsuit filed by the developer of the Central Meadows subdivision and the amendments would correct the deficiencies the court found in the previous ordinance;

·        Approved the Industrial Development Authority’s request for a name change to the Economic Development Authority;

The Board’s next meeting will be on October 1st, at 2:00 pm in the Courthouse.