The Cumberland County Board of Supervisors gained direction during a workshop Thursday regarding how it would like to restructure part of the county’s debt.

After a presentation by Jimmy Sanderson and Dan Siegel of Davenport & Company, a majority of the board favored an option to refinance its 2012 bonds through the Virginia Public School Authority.

“It’s an ongoing effort to look for ways to save money,” County Administrator and County Attorney Vivian Seay Giles said.

The anticipated debt restructuring could save the county money by allowing it to take advantage of a lower interest rate.

According to Davenport & Company’s presentation, the 2012 bonds were a direct bank loan from SunTrust Bank issued to refinance the county’s 2008 lease revenue bonds. Those bonds were incurred through the construction of the county’s middle school/high school complex. Giles said the amount left to be paid on this debt is a little less than $17.9 million, representing about half the county’s total debt.

Under the current arrangement, that debt should be paid off by July 15, 2029, but with a fixed interest rate of 2.96 percent only good through Jan. 1, 2025.

The restructuring option the board is pursuing, called Option 1 in the presentation, will see the debt paid off by Aug. 1, 2029, with a fixed interest rate throughout the term and potentially lower than 2.96 percent.

“The rate won’t be set until October,” Giles said, adding the county would re-evaluate the debt restructuring proposal if the interest rate ends up being more than 2.96 percent.

But for now, Giles affirmed Option 1 as a good one for the county.

“It’s an overall savings for the residents of the county, and secondly, it gives the county the (cash flow) ability to address other needs as they arrive,” she said. “(Third,) because it also does not extend the payback period.”

The restructuring would also help the county level its total debt service for the next 13 years, paying off all general obligation debt, outside of water and sewer, by 2029.

District Two Supervisor and Board Chairman Lloyd Banks favored another debt restructuring plan, Option 5, which would be more aggressive in its initial debt payments than Option 1.

District Three Supervisor Kevin Ingle said he respected Banks’ position but explained why he and the other supervisors did not look to pursue Option 5.

“We wouldn’t have had that little bit of reserve money right up front with the way that debt payment was designed,” he said.

For Option 1, Ingle said, “We were talking about the last two years of it being where it actually increased the payment, and that was because of the upfront savings as far as a little bit over a million dollars that would be available for us to be able to put into the reserve. If they had gone with No. 5, it would have been used up immediately to pay towards the principal.”

Giles confirmed the board will be considering a resolution to continue to move forward with Option 1 during the board’s Sept. 13 meeting, when a public hearing on the matter will be held.

She did warn of the possible need for the county to buy more debt in the future.

“Things happen,” she said. “Is there anything looming that I’m aware of? No. But you never know what may be out there, so if you layer that on, I just think it’s the responsible thing to do to assume that something may happen. But we hope not.”

After a brief closed session Thursday, District One Supervisor William Osl made a motion to establish an EMS agency as a county department with Tom Perry as chief. The motion passed unanimously. The Farmville Herald will have more on this in Friday’s edition.