Virginia

Through refinancing, Smyth County could in effect maintain current debt-service levels and save almost a million dollars over the next 18 years.

Roland Kooch of the financial planning firm Davenport & Company LLC brought that report to the county supervisors March 13.

Based on a proposal by Carter Bank, the best of the two proposals received from about 20 institutions Kooch said he queried, Carter Bank will refinance a 2005 general obligation bond, and U.S. Department of Agriculture Rural Development loans from 2002, 2005 and 2007.

The 4-percent interest GO bond matures in 2030 and the other loans in 2042 at 4.5 percent, 2045 at 4.375 percent, and 2047 at 4.5 percent.

County Administrator Mike Carter said Thursday the 2005 bond refinanced various water and sewer project loans, and the RD loans were, in order, for  Hutton Branch Water, Allison Gap Sewer and East Hungry Mother Water projects.

Carter Bank’s plan would mature all five in 2030 at a fixed 3.35 percent interest rate.

Payment on the bond would drop $20,000 from $405,000 to $385,000. The other loan payments would rise by $4,600 from $19,000 to $23,600; $6,800 from $21,600 to $28,400; and $6,000 from $18,500 to $24,500, for a total payment of $17,400.

By 2030, the county will have saved $935,000, according to Kooch.

“Basically,” said supervisor Ron C. Blevins, “we’re paying what we’re paying now but for less time.”

County attorney Heather Pritts told the supervisors bond counsel must be appointed before the county can act on the refinancing. The supervisors asked Kooch to request Carter Bank to extend its proposal acceptance deadline pending approval of a bond attorney.

 

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