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Board backs Rye Valley Water Authority with moral‑obligation support for $4M project
Summary
The board authorized Smyth County to provide a moral‑obligation commitment to help the Rye Valley Water Authority access a $4 million reimbursement grant line of credit, authorizing the county administrator to execute necessary documents; the board noted a theoretical exposure of up to $160,000 if the local match were unpaid.
Rye Valley Water Authority requested county support in the form of a moral‑obligation commitment to back a bank line of credit while the authority spends project funds and later draws down reimbursement grant proceeds. The authority was awarded roughly $4,000,000 in grant funding for a major waterline project, but because the grant is reimbursement‑based it requires interim financing.
County staff explained that the Bank of Marion has approved a $4 million line of credit for Rye Valley and asked the county to provide a moral‑obligation backing at no upfront cost; county staff noted the grant rules allow interest as an eligible expense and the county's potential exposure would be limited to Rye Valley’s local match (about $160,000) only if Rye Valley defaulted. After discussion, the committee recommended and the board unanimously approved the moral‑obligation request and authorized the county administrator to execute necessary documents to move the project forward.
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