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Lancaster County approves VRA financing to cover $10M in parks and school projects
Summary
Board of Supervisors voted to pursue a lease-financing arrangement through the Virginia Resources Authority’s summer bond pool to raise up to $10 million for county parks, school-related capital projects and related costs; staff presented bank and VRA options beforehand.
Lancaster County supervisors voted Wednesday to pursue a lease-financing arrangement through the Virginia Resources Authority (VRA) summer bond pool to secure up to $10 million for county parks, school-related capital work and associated project costs.
The board moved to authorize participation in VRA’s financing pool after reviewing a staff presentation that compared direct bank loan proposals with the VRA option. County financial adviser Ben Wilson of Davenport & Company told the board the VRA pool currently produces lower estimated annual payments than the bank offers, though final VRA rates will not be fixed until a July bond sale. "VRA is quite a bit lower at the moment," Wilson said during the presentation.
The comparison presented to the board examined four bank proposals (Capital One, Chesapeake Bank, Cruz & Associates and Huntington) with fixed-rate terms of 10, 15 and 20 years, and a VRA pool option that can extend to 30 years. Davenport’s analysis showed the Capital One 20-year fixed loan would cost about $785,000 per year in debt service under current pricing, while the VRA market estimate at the time of the presentation was about $745,000 per year for an equivalent term. Wilson also laid out how a small portion of one project (Harpers Creek) could require taxable treatment because of private activity; staff proposed an alternative funding mix to keep the borrowing tax exempt.
County bond counsel Dan Siegel of Sands Anderson reviewed the resolution authorizing VRA participation and explained that participating requires board approval by the VRA deadline. County Administrator Gill asked for and received the board’s direction to use the VRA summer pool and for staff to proceed with the necessary documents, subject to the VRA program guardrails discussed in the presentation.
Supervisors approved a motion to finance through the VRA summer bond pool for a 30-year term. The county administrator said the board intends to return in late summer for a separate financing application for an additional $15 million for school construction previously authorized by the board; that later application would seek financing through the Virginia Public School Authority’s fall pool.
The board instructed staff and counsel to complete the VRA documents and to swap collateral on an existing VRA loan so the county’s higher-value facility can secure both the new and existing borrowings as required by VRA procedures. The resolution passed by voice vote and staff said VRA would lock rates at the bond sale on July 22 and deliver funding in early August if the county proceeds.
The VRA financing authorization cleared the way for the county to move forward this summer with construction and renovation projects that staff had already budgeted and partially bid, including expansion and restoration at Windmill Point, Westland Beach work and other park and school-related capital items.
Board action notes: the board approved the VRA resolution and authorized the county administrator, in consultation with counsel and the county’s financial adviser, to finalize financing documents and proceed with the VRA bond pool participation.
