Surry County approves $5 million interim loan for YMCA; Huntington Bank bid selected at 4.2%

The Surry County Board of Supervisors voted July 2 to authorize up to $5 million in interim financing to begin design and early construction work for a proposed YMCA recreation center, accepting a competitive bank bid from Huntington Bank at a 4.2% fixed interest rate.

The interim loan will be structured as a fixed-rate, interest-only facility with a roughly three-year final maturity and prepayment flexibility that would allow the county to pay off the loan without penalty after about one year. County financial adviser said proceeds will be invested while unused through Virginia's SNAP program; current SNAP yields were described as roughly comparable to the borrowing rate, reducing net carrying costs in the near term.

The financing presentation, led by county consultants working with the county administrator, emphasized that the $5 million is an initial, interim tranche intended to cover design and early construction until the project team establishes a firm total construction budget — which consultants estimated could fall in a broad planning range (discussed as roughly $20 million to $24 million) for permanent financing next calendar year. "Huntington offered the lowest interest rate — 4.2%," the county's financial adviser said during the presentation.

Bond counsel, George Scruggs of Richmond, told the board the proposed loan is structured as a subject-to-appropriation financing secured by a leasehold deed of trust on the YMCA property. He warned the arrangement does not legally obligate the board to appropriate future payments, but said: "If you elect not to appropriate, the lender may restrict the county's use of the property," and that the structure is commonly used by Virginia localities.

A member of the public, Jean Wilmer of Surry County, spoke during public comment and urged the board to delay spending on a YMCA until the county provides more detailed answers about total costs, current county debt, expected membership thresholds and operating costs. "No money on this project should be spent until all these questions are answered," Wilmer said.

Board members and staff repeatedly noted the county's adopted FY2026 budget already contains line items intended to cover debt service for the planned project, and consultants said the interim borrowing fits within the county's debt policies. The board also heard that proceeds not yet spent would be reinvested to earn interest, potentially offsetting borrowing costs.

The board adopted a resolution accepting the Huntington Bank bid and authorizing county officers to execute transaction documents within specified parameters (principal not to exceed $5,000,000; term not to exceed four years; interest rate cap set at 5% in the resolution). The motion was moved from the floor and seconded; the board approved the resolution by recorded voice vote. The chair announced the tally as "one no and three ayes," and the resolution carried.

Next steps described by staff included finalizing documentation with counsel and financial advisers, closing the interim loan (targeted in mid-July), and continued coordination on capital campaign and permanent financing options next year.

Votes at a glance: The resolution awarding interim financing to Huntington Bank was approved (motion carried; announced tally: yes 3, no 1).