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Roanoke council approves up to $25 million bond anticipation note to fund deferred maintenance
Summary
Roanoke City Council on July 21 adopted a resolution authorizing up to $25 million in general obligation public improvement bonds in the form of bond anticipation notes to fund deferred-maintenance projects, selecting Atlantic Union Bank for a line of credit with a 3.95% fixed rate and prepayment rights; elevators listed as the first priority.
Roanoke City Council adopted a resolution on July 21 authorizing the issuance and sale of up to $25,000,000 in general obligation public improvement bonds, structured as bond anticipation notes, to fund deferred-maintenance projects across the city.
City finance director Margaret Lindsay introduced David Rose of Davenport & Company, who told the council the city received nine proposals and is recommending Atlantic Union Bank. “We have a locked in fixed rate of 3.95 percent for up to the next 5 years,” Rose said. He added the facility is structured so the city pays interest only on amounts it draws and may prepay the note “in whole or in part at any time without penalty.”
The plan is sized to address an estimated $20 million to $25 million of deferred needs over the next five to seven years. Rose said the city expects roughly $2,000,000 a year from a dedicated funding stream to apply strategically to the projects; council previously approved a 1% dedicated meals tax increase and half of that is earmarked to pay debt service for these projects. City Manager Turner specified that elevators are the first priority for work. The city expects to close on the facility on or before Aug. 19, subject to final credit approval by the bank.
Why it matters: the city has deferred capital maintenance across multiple facilities. The line-of-credit structure lets Roanoke begin critical repairs while preserving flexibility to refinance or prepay if market rates change. Council opened and closed a public hearing on the matter with no speakers and then took a roll-call vote; every member present voted yes and the resolution was adopted.
Details and next steps: the council resolution authorizes the city to issue bond anticipation notes in advance of permanent bond issuance. David Rose described the recommended term as up to five years at the locked 3.95% fixed rate; staff said the city will only pay interest on draws from the facility. Davenport and city staff expect the bank’s final credit approval to be procedural. The city will prioritize elevator replacements as part of the first tranche of work and will present spending details as projects are drawn from the facility.
