Richmond County commissioners approve refinancing proposal to lower debt payback costs

ROCKINGHAM — The Richmond County Board of Commissioners on Tuesday approved a recommendation to resolve its debt several hundred thousand dollars cheaper.

The refinancing recommendation came from the Richmond, Virginia-based financial services firm Davenport & Company and was presented by Mitch Brigulio, senior vice president and municipal advisor.

“We identified a number of potential refinancing opportunities for the county’s existing debt obligations,” Brigulio said. “We’re in a good interest rate environment now. You already have good interest rates on your existing loans, but explore the opportunity to potentially reduce that interest rate further and generate some debt service savings, budgetary savings for the county.”

According to a summary, Davenport sent out a Request for Proposals to 50 national, state and local lending institutions and secured seven responses to refinance seven of the county’s existing loans.

The three lowest bids were from:

• J.P. Morgan Chase - with a 1.37% interest rate locked on or after Nov. 22 and a closing date of Jan. 6.
• PNC Bank - with a 1.46% interest rate, but the term sheet had to be submitted the day following the meeting (Nov. 3)
• Truist - with a 1.56% interest rate locked through a closing date of Jan. 6

Davenport also explored a public sale approach, which would have a 1.06% interest rate. However, those rates are subject to change until late January.

Brigulio said the estimated potential savings for those options are as follows:

• JP Morgan Chase - $656,000
• PNC - $568,000
• Truist - $519,000
• Public Sale - $780,000

All things considered, Davenport recommended going with JP Morgan Chase — unless the interest rate rises above 1.56% within the next 20 days. In that case, Truist should be the choice.

Brigulio said that the refinancing will not extend the terms on any of the outstanding debt obligations.

Bond Counselor Bob Jessup, of the law firm Sanford Holshouser, walked the commissioners through a public hearing

County Manager Bryan Land, during his monthly report, said he was “pleased” with the refinancing opportunity and the commissioners’ approval, adding that he and county Finance Director Cary Garner have been reviewing market conditions for the past three months “and felt the timing was right to finally pull the trigger” on refinancing the $19 million in current debt before interest rates started to escalate.

“This was a personal goal of mine, over three and a half years ago, to have our debt burden slashed in half within my first six years,” Land said. “I’m pleased to announce we are well on our way to achieving that goal.”

Not long ago, Land said, the county had more than $42 million in debt — which will be down to about $27 million by the end of the year.

“Major strides have been made,” Land said.

Once the interest rate is locked in on Nov. 22, depending on which of the two institutions the county decides to choose, the proposal will go to the Local Government Commission for approval and back to commissioners at the December meeting for a final resolution and closing on Jan. 6, 2022.

The commissioners also approved:

• A proclamation to honor Richmond County’s veterans; and one in recognition of National Adoption Awareness Day (Nov. 20).
• The appointment of Tamara Harris to the Sandhills Community Action Program Board of Directors.
• The reinstatement of three-year terms on the Richmond County Health and Human Services Advisory Board for Dr. William Cleveland, Evonne Moore, Patricia Solomon, Dr. Ralph Souder and Thad Ussery.
• A resolution to support bylaws changes of the Fort Bragg Regional Land Use Advisory Commission.

The next meeting is scheduled for 5:30 p.m. Dec. 7.