VML Bank of Finance presents financing options for Nottoway County courthouse project

At a work session on Aug. 14, 2017, representatives of VML Bank of Finance told the Nottoway County Board of Supervisors they can help the county plan and execute financing for a major courthouse renovation or replacement.

The presenter said VML Bank of Finance offers municipal advisory services, investment management and accounting support and can prepare a “plan of finance” that models five-year revenue, expense and fund-balance projections and overlays capital projects to show what level of debt the county can afford. “We start out with developing a five‑year projection of revenues, expenses and fund balance,” the presenter said. He added VML can participate in board work sessions and that the nonprofit arm may offer a grant credit of $7,000 toward planning work.

Why it matters: County staff told the board the chief circuit court has identified ADA, security and building-system deficiencies that likely require either major renovation or replacement. The presenter estimated projects of this type in Virginia commonly run into the millions and outlined how counties typically access lower‑cost, tax‑exempt financing for public facilities.

Key options explained

- IDA conduit/lease revenue bonds: For county projects, the adviser described use of an industrial development authority (IDA) as a conduit issuer and structuring financing as tax‑exempt lease‑revenue bonds with a 20–30 year term. The county would maintain ownership while the IDA holds lease rights during the bond term; the county annually appropriates lease payments. The presenter said such a “moral obligation” appropriation pledge is common in Virginia and typically results in attractive interest rates because of the state’s credit profile.

- VRA pooled bond program and standalone bonds: The presenter described the Virginia Resources Authority (VRA) pooled bond program as an alternative for localities that want municipal‑bond economics via a pool, and noted standalone bond issues are more economical for larger financings and for localities with stronger credits. He cited recent examples the firm helped structure, including a $31 million lease‑revenue financing for Botetourt County and a $27 million general‑obligation bond for Lexington‑Rockbridge.

- Interim (construction) financing and refinancing: He recommended interim (construction) loans during building, converted to permanent financing at completion, and noted options such as bank placements or public sales depending on project size.

- Enhancements: The adviser said counties can set a debt‑service reserve fund at closing to provide bondholders comfort and reduce near‑term liquidity risk.

Costs and engagement

The presenter described a planning retainer that includes a plan of finance and one year of advisory availability. He said VML Bank of Finance’s board authorizes grants (the $7,000 credit was mentioned) that can substantially offset planning costs; execution fees for actual bond or bank placements are set by the firm’s board and vary by financing vehicle and size.

Context and next steps

Board members were told the county has received an unsolicited proposal under the PPEA (Public‑Private Education Facilities and Infrastructure Act) and has begun receiving competing proposals. The presenter recommended a financial adviser review any PPEA proposals’ assumptions (fees, interest rates, timelines) so the county can make apples‑to‑apples comparisons. No formal vote was taken. Staff and advisers discussed seeking additional state or federal grant programs as a separate step and noted application timelines would vary.

Quotes from the presentation were limited to statements by the VML Bank of Finance representatives. The board did not adopt financing decisions at the session; staff indicated they would continue evaluating proposals and may engage municipal‑advisory services to review PPEA submissions and prepare a plan of finance.