Surry County approves $5M interim loan to start YMCA project; Huntington Bank bid recommended

The Surry County Board of Supervisors on July 2 approved a resolution to accept a Huntington Bank proposal to provide up to $5 million in interim financing to begin design and early construction work on a proposed YMCA. Davenport financial adviser Mister Locks said Huntington offered the lowest fixed rate in the county's competitive bidding process and recommended the board proceed with that bid.

"Huntington ... offered the lowest interest rate. It's a 4.2%," the adviser said during the presentation, noting the loan will be interest-only during the interim phase and can be prepaid without penalty after roughly one year. He told the board the loan fits within the county's adopted FY2026 budget and capital plan and that the county can reinvest unused proceeds through the state's SNAP program to offset carrying costs.

Bond counsel George Scruggs outlined the parameters of the resolution and explained the financing structure is "subject to appropriation," meaning the board must appropriate funds annually to make payments. He cautioned there is a practical enforcement mechanism tied to a leasehold deed of trust if the county declines to appropriate funds, saying it "would allow the lender to, remove the county from the property or not allow the county to use the property," though he characterized such remedies as uncommon enforcement tools.

The board voted to approve the resolution to accept the Huntington financing and authorized county officers and the county administrator to execute necessary documents. The chair emphasized to residents that, based on today's presentation and the county's financial policies, the initial interim loan does not require a tax increase.

Next steps: staff will finalize documentation with financial advisers and aim to close the interim financing later in July, then use the proceeds to complete design and determine permanent financing once final construction costs are better established.