Supervisors vote 4-3 to refinance $3.3M Pittsylvania County debt

On a 4-3 vote Monday, the Pittsylvania County Board of Supervisors passed a budget amendment that allows $3.3 million in county debt to be refinanced.

The vote will allow the Board of Supervisors to hold this year’s property tax rate increase to 3 cents per $100 of assessed value. Tax increases were needed this year because county voters approved a $70 million bond referendum in November 2007 to renovate Pittsylvania County’s four high schools.

During the contentious budget process this spring, county residents angrily complained about any new or higher taxes being levied in the middle of a recession. The plan to refinance some of the county’s existing debt came in as a last-minute proposal, and kept this year’s property tax rate increase to just 3 cents.

Carter Bank & Trust supplied the best bid for the debt refinancing proposal, with a 3-percent interest rate and no penalties for early payment.

Supervisors Fred Ingram, Hank Davis and Marshall Ecker were against the refinancing, saying the proposal would incur more debt, while simply taking $900,000 from the general fund’s surplus would balance this year’s budget.

Davis called the restructuring plan “irresponsible,” but Supervisor James Snead said the general fund surplus had to be kept for emergencies. Supervisor Tim Barber said that borrowing money from the general fund to balance this year’s budget would put the county at risk of an 8-cent property tax increase next year to balance its budget.

Ecker said the county “needs to pay off our debt” and said the restructuring itself would incur a $75,000 fee just to get the refinancing set up. The bonds being refinanced helped to build the county’s new middle schools and expand the landfill in Dry Fork.

Supervisor William Pritchett noted that taking the general fund surplus would leave “nothing to fall back on” and hurt the county’s bond rating.

The schedule for repaying the principal of the debt will begin with a $125,000 payment in March 2013, followed by $225,000 due in March 2014, $235,000 due in March 2015, $750,000 due in March 2016 and a final payment of $1.92 million due in March of 2017.

Payment for the interest on the bonds will be due semi-annually, in March and September of each year, beginning in September 2009.

Ingram, Davis and Ecker voted against the debt restructuring and Snead, Barber, Pritchett and Chairman Coy Harville voted for it.

Contact Thibodeau at dthibodeau@registerbee.com or (434) 791-7985.