The price tag for the courthouse construction project is now approaching close to $30 million, with the Halifax County Board of Supervisors approving a reimbursement resolution at Tuesday’s meeting totaling that amount.
The reimbursement resolution, along with a financing resolution, allow supervisors to work through the Virginia Resource Authority’s 2019 fall pool financing to utilize the approximate $2.4 million in courthouse reserve balance funds to reduce the borrowing amount necessary for the $12.5 million it will take to complete the project.
Board members authorized a loan application to the Virginia Resources Authority for an amount not to exceed $12.5 million, at around a 2.9% interest rate.
Supervisors approved both resolutions by 7-0 roll call votes, with ED-1 supervisor J. T. Davis absent from Tuesday’s meeting.
ED-7 supervisor Garland Ricketts moved to adopt the first resolution, with a second from ED-6 supervisor Stanley Brandon, and ED-2 supervisor Jeffrey Francisco moved to adopt the second resolution, with a second from Brandon.
In the fall of 2016, the county locked in a portion — $16.7 million — of the funding required for the project, obtaining the initial financing through the VRA’s Virginia Pooled Financing Program at a fixed rate of 3.06% amortized over 20 years, according to a presentation from Davenport public finance representative Ted Cole to supervisors on Tuesday.
That allowed the county to obtain funds to proceed with the project and cover costs since 2016, mitigate volatility in credit markets, avoid interest expense on the full amount of the project over the past several years and accumulate over $600,000 of interest earnings on bond proceeds that can be used toward project costs, according to Cole.
Cole noted volatility in interest rates since 2016 but indicated approval of the spending package for courthouse construction comes at an opportune time.
“It’s great timing, a silver lining in what you’ve been through in managing this project,” Cole told supervisors.
Scott Simpson, county administrator, pointed out the $2.4 million capital reserve created in 2015, when supervisors passed a designated 2-cent real estate tax increase to be used for courthouse renovations, shows “some discipline by the board of supervisors in the past many years to allow for this approach” in preparing to repay the courthouse debt.
Costs for the project have increased since the county adopted the first resolution dated June 24, 2013, authorizing the reimbursement of expenditures in an estimated amount of $15 million.
On Tuesday night, Davenport Public Finance, in concurrence with the supervisors’ finance committee, recommended the county adopt one of three scenarios to complete financing for the project.
Cole explained that the scenario the finance committee and his group recommend reduces the principal amount of debt the county has to issue and minimizes the total financing costs over 20 years (at an interest rate of 2.91%); fully utilizes moneys set aside in the courthouse reserve fund that have been accumulated specifically for this purpose; and maintains a minimum fund balance in the county’s future debt service reserve fund of approximately $1.5 million that could be used for other capital needs over time.
“The good news is no additional reserves are needed by the county to service debt on this project,” said Cole.
The application deadline to the VRA is Sept. 20, and it will take about a month before the agency sells bonds to raise capital. By the middle of November Halifax County should learn exactly what rate of interest it will pay on the debt.
Construction on the courthouse renovation project continues to move forward, according to county building official Otis Vaughan, who told supervisors Tuesday that pouring of concrete for the new retaining wall is 40% complete, and construction of one stairwell is complete.
Due to begin in the next 30 days are continuing construction of concrete walls, digging and pouring of foundations, forming and pouring elevator pits and bracing the south concrete foundation wall at the portico area.
Work is scheduled to begin inside the historic courtroom building, with demolition of the wainscot at the 1834 building courtroom, demolition of the lobby and wall on the second floor of the 1834 building, and installation of flooring in the 1834 courtroom and hallway also is set to begin, the county administrator told supervisors.