- Last Updated on Tuesday, 31 July 2012 21:56
- Published on Tuesday, 31 July 2012 21:56
- Hits: 927
Westmoreland’s new court house project became more appealing when local officials and their public learned this Monday evening that the proposed construction project can go forward without a need to increase county tax rates.
The Board of Supervisors and Industrial Development Authority (IDA) met in joint session on July 30 to review contractor bids proposals and entertain the anticipated project’s financing options. Assuming the role of administrative agent, the IDA will reconvene at 6 p.m. on Aug. 20 in A.T. Johnson auditorium to conduct a public hearing and deliver a vote accepting or rejecting the 40-year loan the federal government has made available to finance the construction project.
The Supervisors will conduct their own public hearing on the court house construction question when that Board meets at 6 p.m. on Aug. 13 in A.T. Johnson auditorium. During that session, members of the public will receive a briefing that details information gathered this Monday evening. Private citizens will then be accorded an opportunity to make their positions part of the official record. After hearing from county residents, the Supervisors will vote to recommend that the IDA take no action at this time or move the project forward and accept the 40-year debt service obligation that U.S. Department of
Agriculture’s Rural Development made available with a fixed 3.375 percent interest rate.
During this Monday’s session, The Journal learned that the retired Northern Neck Regional Jail Executive Administrator, Jeffery Frazier, has been engaged by Westmoreland County to deliver assistance with the court house project. Frazier is credited with successfully originating an initiative that brought the U.S. Marshal Service into the regional jail endeavor, creating a partnership that resulted in construction and ongoing operation of the facility at no cost to participating Northern Neck localities.
Unlike the regional jail project of 1995, the new Westmoreland County court house won’t be free. Principal and interest over a 40-year period will cost the jurisdiction as much as $16,000,000.
According to project architect Rick Funk, the low bid submitted by the Maryland contractor W.M. Schlosser puts construction costs at $199 per square foot. Information gathered by Funk and others reflects a median construction cost of $250 per square foot for comparable recent projects in Virginia. County Administrator Norm Risavi and architect Funk both advised this Monday that construction costs would have greatly exceeded the low bidder’s $199 per square foot proposal if Westmoreland had attempted to initiate the project five years earlier.
Risavi said square footage construction costs ran as high as $275 during 2007.
Frequently chastised by private citizens for holding public monies in reserve, Risavi’s fiscal practices anticipated the court house construction project throughout his 20 years of service in Westmoreland. As long ago as December 1990 the local government was put on notice by that era’s presiding Circuit Court Judge Joseph Spruill that existing facilities would not meet the law enforcement community’s emerging needs.
To ease the burden associated with such a costly project, Risavi began setting aside a pool of revenue that grew into the $1,726,113 the jurisdiction expects to use to purchase court house equipment, fund near term court house debt service and interest payments during the project’s two-year construction period.
The reserve monies were derived from revenues that the courts produced. Currently quantified at the level of $200,000 per year, the revenues generated by Westmoreland courts will be used in subsequent years to help retire the debt.
Additional revenue streams designated for annual court house debt retirement are the $50,000 received from emergency communications tower leases and $75,000 generated by E-911 land line revenues.
The timing of a court house construction project was similarly programmed by Risavi and long-time Supervisors Woody Hynson and Darryl Fisher. The county refurbished the A.T. Johnson complex and leased office space to the Health Department, Medical Center and Department of Social Services. Those payments have been used to retire the debt resulting from that refurbishment project.
When the A.T. Johnson debt obligation is fulfilled in 2020, those annual payments of $160,459 will be used to retire the court house debt. The annual library debt service of $78,000 will likewise be retired in 2020 and that $78,000 will be used to meet the annual court house debt service obligation.
The scenario presented by the county’s Davenport & Company, LLC consultants lists borrowed principal at $8,709,750.00 and interest at $7,210,983.80 over the 40-year life of the debt service obligation.
The county will deliver interest-only payments during the initial two years of the debt service schedule. After two years, the building will be in service and the county will begin making annual payments in the amount of $407,040.00. Annual deficits will be reflected through 2019 in the amount of $54,372.53 in 2015 and $82,040 during the four-year interval from 2016 through 2019. Early debt retirement can occur without a penalty.
Davenport’s David Rose praised Westmoreland County’s fiscal condition.
“The good news is your county continued to be in a very solid financial position,” he began.
“Your debt level is on the bottom compared to the debt level of your neighbors.
“The other good news is we are seeing interest rates at a 40 year low. Rural Development has offered financing at a fixed rate. That means your interest won’t go up. The 3.375 percent interest rate is half of what the rates were 20 years ago and the burden associated with the financing is lest than previous estimates.”
The closing date on the federal financing proposal is Sept. 25. The low bid from general contractor W.M. Schlosser expires on Aug. 27. The previously noted meeting schedule in Westmoreland County was established to meet the referenced deadlines if the project does in fact move forward as proposed.