Photo/Graphic courtesy of Botetourt Co. Fire & EMS
By Matt de Simone
The Botetourt County Board of Supervisors unanimously approved a revised financing plan for two major public safety projects, along with a required resolution agreement, during a special meeting on March 10.
The board selected a funding option that reduces borrowing by increasing the use of the county’s fund balance, a move officials said will generate significant long-term savings.
County Administrator Gary Larrowe presented two options to fund the county’s emergency communications radio system and upgrades to the 911 center and Read Mountain Fire Department, projects totaling approximately $36.2 million.
Under the approved “Option 2,” the county will use about $11.2 million in fund balance, including $6.7 million already spent, and borrow $25 million. The radio system will be financed over 15 years, while the 911 center upgrades will be financed over 20 years.
Larrowe told the board the approach would reduce annual debt service from about $3.1 million to roughly $2 million.
“That’s about a $1.1 million difference annually,” he said, estimating total savings of $16 million to $18 million over the life of the debt.
Board members raised several questions during the discussion, focusing on financing terms, fund balance impacts, and flexibility in the borrowing process.
Chairman Dr. Mac Scothorn asked why the projects would be financed over different time periods. Larrowe explained that financing terms are based on the expected life of the assets, comparing shorter-term financing for equipment to longer-term financing for buildings.
Buchanan Supervisor Linda Rottman asked for clarification on previous board actions related to project funding and how they aligned with the figures presented. Larrowe said earlier discussions combined funds already spent with proposed future allocations, noting the county had already committed about $6.7 million and was now considering an additional $4.4 million in fund balance.
Rottman also asked about the county’s fund balance policy. Larrowe confirmed the county aims to maintain a reserve equal to 25% of annual expenditures and said projections show the county remaining above that threshold even with the additional spending.
Amsterdam Supervisor Tim Snyder asked when interest rates would be determined. County Attorney Mike Lockaby said preliminary estimates would be available last week, with final pricing expected in late April as part of the bond issuance process.
When asked about the preliminary debt service schedule, county officials believe that the bonds for the new money proposed prices will not be released until the week of April 13, and the existing debt refinancing is on a different schedule.
Blue Ridge Supervisor Walter Michael asked whether the county could withdraw from the financing if interest rates came in higher than expected. Lockaby said the resolution establishes maximum borrowing and interest rate parameters, allowing the county flexibility and preventing it from being locked into unfavorable terms.
The resolution specifically caps the total borrowing at a “Maximum Par Amount” of $32 million, including up to $7 million for refinancing existing debt, and sets an interest rate ceiling of 5.5% per year. It also requires that final repayment terms not extend beyond Dec. 31, 2050, while giving county officials authority to adjust terms based on market conditions at the time of sale.
In addition to new borrowing, the board considered refinancing existing debt tied to the county’s 2014 public safety building and regional jail. Larrowe said the refinancing would only proceed if it meets a minimum savings threshold of 3% in net present value. If achieved, the county could save about $42,000 annually through 2033, totaling roughly $252,000.
“It’s not every day you get to save a quarter of a million dollars,” Larrowe said.
The resolution formally authorizes that refinancing, stating it can move forward only if it meets or exceeds the 3% savings benchmark, ensuring the county benefits financially from restructuring the existing 2014 lease.
Lockaby also outlined the legal framework for the financing, including lease agreements with the Virginia Resources Authority (VRA), which issues bonds on behalf of local governments. Under the arrangement, the county will temporarily lease certain public safety facilities— including the Read Mountain Fire Station and portions of the radio system— to the VRA, which will then lease them back to the county as part of the financing structure.
For more information about what was discussed at the March 10 meeting, visit botetourtva.gov/agendacenter.
