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Scott County board backs moving forward with Capital One loan to finance school projects
Summary
After a public hearing, the Scott County Board of Supervisors authorized staff to pursue Capital One—s fixed-rate loan proposal (recommended 4.6%) to finance about $5.3 million in renovation and construction at Weber City and Yuma elementary schools; formal resolution and school-board approvals remain required.
The Scott County Board of Supervisors voted to proceed with a Capital One loan proposal offering a 4.6% fixed interest rate to fund school capital projects that Davenport & Company estimated at about $5.3 million.
Davenport & Company's Austin Sachs told the board the county pursued a dual-track plan: a pool financing option through the Virginia Public School Authority (VPSA) and a competitively bid direct bank loan. Sachs recommended the Capital One option because it locks a known, fixed rate now and offers a seven-year call/prepayment feature, while the VPSA rate would not be known until October and could fluctuate.
At a public hearing, school officials described current projects including roofing, HVAC and electrical upgrades at several county schools. Scott County Schools officials said one large HVAC replacement at a high school likely will cost in the $2 million to $3 million range; Superintendent Ferguson reported in-person enrollment around 3,200 students this school year, a near-term increase that he said differs from longer-range state projections.
During discussion, board members and the public asked whether pending grant awards would change borrowing needs. School staff said any grant receipts would be applied against the loan/sale proceeds to reduce the financed amount if the county is awarded funds. Sachs cautioned that bank credit approvals remain necessary but said Capital One had given positive feedback to date.
The board made a motion to express intent to move forward with Capital One's 4.6% proposal and approved it by voice vote; staff will complete transaction logistics and return with the formal resolution and financing documents in October after final approvals by bond counsel and the school board. Virginia law requires the county use an economic development authority as the conduit issuer for this type of financing; the board will still be the ultimate obligor on the debt if default were ever to occur.
Next steps: staff will coordinate credit approval with Capital One, seek school-board concurrence (because the loan uses a school building as collateral in the bank’s proposal), and prepare the formal financing resolution for the board in October.
