Davenport: Prince George has room to borrow; $44M short‑term affordability under cautious scenario

Davenport Financial told the Prince George County Board of Supervisors on Sept. 23 that the county has financial capacity to borrow for capital projects without an immediate tax increase, and staff should consider that capacity as the capital improvements plan (CIP) committee meets.

Mitch Bergoglio and Gracie Caplis of Davenport Financial presented a debt analysis showing the county's existing debt outstanding, upcoming declines in annual debt-service payments and a reserve balance in the debt service fund that can be deployed to accelerate projects. Bergoglio noted the county's credit ratings — "rated Aa2 by Moody's Investor Service and AA+ by Standard & Poor's" — and said that rating strength gives the county access to attractive market rates if it chooses to borrow.

The presentation said Prince George carried about $59.9 million in outstanding tax-supported debt as of June 30 and had an annual debt-service payment budgeted at just under $7 million for fiscal 2026. Davenport modeled three repayment-term scenarios. Using only the county's projected annual surpluses (leaving the current debt-service fund balance intact), the firm reported an illustrative affordability of roughly $44.4 million over 10 years on a 15-year final maturity. Extending terms to 20 or 30 years increased that aggregate capacity by about $7 million to $8.5 million, but longer terms also reduce the 10-year payout ratio and can move the county closer to policy limits for that metric.

Why it matters: the county's financial policies limit several measures used to evaluate new borrowing: a minimum 10-year principal payout of 55 percent, annual debt service not to exceed 10 percent of governmental expenditures, and debt outstanding to assessed value capped at 3.5 percent. Davenport's slides showed Prince George currently well inside those limits (debt to assessed value roughly 1.25 percent), and that scheduled step-downs in debt service create space for new capital borrowing.

Davenport also highlighted the county's debt service fund balance (reported at about $4.9 million on the packet's schedule). Using that balance together with projected annual surpluses would allow the county to take on additional debt more quickly while remaining within the policy limits Davenport modeled; the firm showed example issuance schedules that accelerate the pace of projects if the reserve is used.

Board context and next steps: county staff noted the CIP committee meets Sept. 24 to begin ranking projects. Davenport said the affordability figures are mathematical exercises, not a recommendation to issue debt immediately: "you could access financing at attractive interest rates if you choose to do so," Bergoglio said. He offered detailed appendices for board review and said staff will return with options as the CIP process proceeds.

Ending: the board did not authorize new borrowing at the Sept. 23 meeting; Davenport's analysis will inform committee work and future board decisions about which projects, if any, to fund through debt.