Pittsylvania County to vote on bond structure

The Pittsylvania County Board of Supervisors will vote Monday night whether to restructure up to $3.3 million in middle-school and landfill bonds to save money in the short-term and help pay for high-school bond debt.

The proposed budgetary move, similar to refinancing a home mortgage to a lower interest rate over a longer period of time, would rearrange the debt structure of up to $3.3 million through 2011. The county would repay $300,000 for each of the following four years and $1.8 million in the fifth year, said County Administrator Dan Sleeper.

“We borrowed from ourselves and will have to pay ourselves back over five years,” Sleeper said.

The proposal would restructure up to $3.3 million taken from $38.6 million in middle-school bonds and $6.5 million in landfill bonds. It would save the county up to $1.49 million each year in 2010 and 2011, Sleeper said.

Until the county Board of Supervisors approves the refinancing and closes the deal, the proposed $3.3 million figure is not definite, Sleeper said.

The $38.6 million middle school bond, which is paying for the county’s four new middle schools, is made up of a $20 million Virginia Public School Authority Loan and $18 million in general obligation bonds. The $6.5 million landfill bond comes from general obligation bonds. The landfill bond is paying for part of a new lining system to prevent leachate from entering the ground.

The $3.3 million would be made up entirely of general obligation bonds, Sleeper said.

Sleeper said he couldn’t break down the amounts from each of the two bonds that would go toward the proposed $3.3 million. The interest rate on the proposed amount would be 3 percent over the following five years beginning in 2012.

The interest rate on the remaining general-obligation portion of the middle-school bond is 4.25 percent in 2010 and 4.35 percent in 2011. The rate for the landfill bonds is 3 percent in 2010 and 2011.

The money saved would help enable the county to pay debt on the $70 million high-school renovation bond county voters approved in 2007. The refinancing would help the Board of Supervisors keep the real-estate tax increase to 3 cents, from 53 cents per $100 of assessed value to 56 cents.

The Board of Supervisors must pay $4.1 million in debt service for the high-school bond in 2009-2010. The board also raised other taxes and fees to minimize the real-estate tax increase.

County residents voted for the $70 million high-school renovation bond in 2007, knowing they would have to pay for it with higher taxes. Supervisors had proposed greater increases on the real-estate tax rate, but raised it just three cents. Constituents protested during public hearings that property owners would bear the brunt of the tax burden.

“We’re trying to avoid charging the people money that they had already agreed to pay,” Sleeper said of the proposed bond restructure.

Contact Crane at jcrane@registerbee.com or (434) 791-7987.