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Alleghany commissioners set public hearing for Truist loan recommendation for new high school; staff to apply to LGC
Summary
County finance staff recommended a Truist draw‑down loan for the new high school project and commissioners agreed to set a public hearing for Jan. 6 to allow submission of a Local Government Commission loan application.
County finance staff recommended that Alleghany County pursue a draw‑down loan from Truist to fund construction of the new high school and related project costs, and commissioners agreed to set a public hearing on the matter for the next meeting so staff can submit the Local Government Commission application.
"This is our recommendation with Truist. Option A for the 10 years at 4.3 tax exempt interest rate," the finance director said during the presentation. The finance director said the loan would be structured as a draw‑down: the county would keep the proceeds in a Truist account and request funds as needed.
Staff presented estimated payment comparisons: the 10‑year option would have a monthly payment of $70,536.61; the 15‑year option's monthly payment was presented as $52,346.67. Staff said the 10‑year option would save the county approximately $1,000,000 in interest over the life of the loan compared with the 15‑year option.
Staff explained that the loan product is a draw‑down account, that payments are scheduled to begin in March and that interest will be charged on the outstanding principal even if funds remain in the account; the finance director said the account will earn interest that offsets some interest expense. Staff also said Truist had guaranteed the quoted terms for 90 days and discussed prepayment penalties that decline over years (for example, 5% in year one, declining to 4% in year two and 3% in year three under the presented terms).
Commissioners asked procedural and timing questions. Staff said the county must set a public hearing and then vote at the next meeting to submit the loan application to the LGC. Commissioners agreed to hold the public hearing on Jan. 6 and to proceed with the LGC application afterward.
No final loan award or binding contract was executed at the meeting; commissioners set the public hearing and directed staff to continue the loan application process subject to required approvals.
