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Nottoway supervisors approve $7.5M interim financing through IDA to fund school HVAC and courthouse design
Summary
The Nottoway County Board and its Industrial Development Authority approved parallel resolutions authorizing up to $7.5 million in interim tax-exempt borrowing—primarily to replace a failing Crewe-area school HVAC system and to fund courthouse schematic/design costs—after advisors said the best bid fixed the rate near 4.05%.
Nottoway County supervisors voted unanimously May 14 to authorize interim tax-exempt borrowing through the county uthority to cover an estimated $4.5 million HVAC replacement at the Crewe-area elementary school and approximately $2.6 million in short-term financing for courthouse schematic and design work.
The action implements a financing plan presented by Davenport & Company and reviewed by bond counsel from Sans Anderson. Advisors told the board they solicited national and regional bids and received three competitive offers; Huntington Bank submitted the lowest-cost proposal with an effective fixed rate roughly 4.05%, with Truist identified as a 4.5% backup.
Steve Rose of Davenport & Company, presenting the recommendation, said the package was structured to allow draws into a state-managed tax-exempt investment account and prepayment without substantial penalty. "The good news tonight is this presentation's pretty short because we got what we asked for," Rose said, summarizing the market response.
The loan package covers interim mobilization and draw needs: county staff said the school may request about $1 million for mobilization in July, while design and soft costs for the courthouse will be paid as they accrue. Advisors walked the board through the anticipated collateral structure: a ground lease to the IDA and leaseback to the county (the bank receives an assignment of the lease as security), a common mechanism that supports tax-exempt status.
Advisors also explained operational details: proceeds can be held in Virginia's state non-arbitrage pool (SNAP) until draws are needed; if grant money arrives (county staff noted a potential school grant in the $1.1M–$1.5M range), the county expects to prepay the note after the first permissible prepayment window next July. The financing team estimated combined advisory and transaction fees in the low six figures (advisors cited project-dependent figures; an illustrative figure near $85,000–$90,000 was discussed).
Board members pressed advisors on timing and accounting: June 11 was identified as the bank eadline to lock Huntington's rate, and auditors' rules require certain consultant fees to be paid and recorded in the fiscal year the work is performed. Davenport's team said the interim structure preserves fund balances ahead of permanent financing next year and can be prepaid when permanent financing and grant receipts allow.
The board pproved the resolution by roll call, 5—or, 0 gainst. The county's IDA then adopted a parallel resolution, authorizing the entity's role in the lease/leaseback structure and related closing documents. County staff will coordinate signatures with the chairman and clerk and proceed to closing steps with the bank and counsel.
Next steps: county staff will finalize closing documents, confirm the bank's credit approval, and proceed to close prior to the June 11 deadline if possible. The county expects to draw funds only as needed and to monitor SNAP yields while the interim note is outstanding.
