PALMYRA — The Fluvanna County Board of Supervisors agenda has a report on the school bonds refinancing and the county could see much lower payments than originally scheduled.
According to the documents in the agenda, the supervisors will be briefed on paying $10.65 million less than scheduled for 2013 to 2036. The scheduled payments are less because of refinancing the bonds purchased for construction of the new high school.
The presentation, made by county financial advisor Raymond James | Morgan Keegan, lays out the year-by-year payment schedule including principal and interest breakout.
The supervisors will hear the full presentation on Jan. 2 during the 2 p.m. meeting.
The largest decrease in scheduled payment happens in this current fiscal year with a savings of $1.7 million. From then on, the county averages $389,598 less per year for the other 23 years. Overall the county saves from paying $425,959 per year for the entire 25-year span.
Using the current assessments and current tax rate, one penny of taxes is nearly $300,000. (After reassessments are completed, the tax rate will increase to equal the same county revenues, however the value of one penny of taxes will decrease.)
The lower payments stem from a lower interest rate. The county will pay more per year in principal but not nearly as much in interest. The chart from the agenda has the county reducing interest payments by $21.3 million but paying $10.7 million more in principal.
The really interesting portion of this refinance is how it will affect the lawsuit against former county financial advisor Davenport and Co. LLC. The board originally requested $18 million worth of damages from Davenport allegedly giving misguided advice on the bonds issuance.
The board has authorized the county attorney to enter mediation with Davenport and appointed Don Weaver (Cunningham District) as a board representative in any mediation session. Davenport, who originally did not know about the board approving possible mediation until contacted by Fluco Blog, said the company is looking forward to mediation to possibly find “amicable resolution of the case.”
The refinancing of the bonds presentation is scheduled for the ‘presentations’ section of the Jan. 2 meeting. Also at the meeting the supervisors will also elect a chairperson and vice-chairperson, schedule for meetings, location for meetings and adopt board by-laws and rules of procedures.