Financing discussed for library build

Published 11:03 am Wednesday, February 20, 2019

Buckingham County’s financial advisers presented financing options for the county’s new library during the Buckingham County Board of Supervisors meeting Feb. 11.

Davenport Inc. Senior Vice President Roland Kooch Jr. and Associate Vice President Griffin Moore presented the options.

The new library would be converted from the former Dillwyn Primary School building at the intersection of U.S. Route 15 and State Route 20.

Kooch and Moore presented a dual track option, or performing two options simultaneously.

The first track, Direct Bank Loan, Davenport representatives would solicit financing proposals from local, regional and national lending institutions for a Direct Bank Loan through a Request for Proposals (RFP).

For the second track, Virginia Resources Authority (VRA) Pooled Financing Program, Davenport representatives would assist the Buckingham County in applying to participate in the spring program. Buckingham applied for the VRA pool Feb. 1.

The goal of the projects outlined by Davenport are meant to secure approximately $5 million of financing for the library by the end of the fiscal year.

In a timeline of the Direct Bank Loan program, Davenport officials would distribute the RFP to local, regional and national banks to solicit the week of Feb. 11, after Buckingham Supervisors approved the action and they presented the request to the county’s Industrial Development Authority.

In late February, responses to the RFP are due back to Davenport from potential lending institutions.

After this time, Davenport and County staff analyze results of the RFP, compare estimated results of a Direct Bank Loan and VRA Pool financing, and develop a recommendation of financing approach.

Davenport would then present the recommendation during the March 11 Board of Supervisors meeting. If the Direct Bank Loan option is chosen, Davenport would present the RFP results to the IDA during the month of March.

If the VRA Pool is chosen, local approvals would be due to VRA by March 28.

In early April, representatives could close on a Direct Bank Loan, if applicable.

In an item tentatively scheduled for May 8, VRA would sell pooled financing bonds competitively in the Public Markets, if applicable. Interest rates would be locked in at this time.

Lastly, for an item tentatively scheduled for May 22, representatives, if applicable, would close on a VRA Pooled financing.

District Three Supervisor Don Matthews asked how many banks could potentially see the RFPs.

Kooch and Moore said Davenport typically sends RFPs to a master list that includes approximately 75 banks. The number of bids returned varies depending on the credit structure and the terms and conditions of the loan.

There could be up to five RFPs returned, though he said the typical number typically ranges from two to three banks.

District Two Supervisor Donnie Bryan asked about the current rate on the VRA market.

Kooch and Moore estimated it could be approximately 3 percent for a 20-year financing period. With independent banks, they estimated the rate could be comparable to the VRA rate, approximately 3-3.15 percent depending on the market.

Members of the Buckingham County Board of Supervisors gave Davenport approval to move forward with the RFP submissions.