The Town of Purcellville has incurred some significant costs over the past couple of years with some major capital projects, including the move to a new Town Hall, renovations to Fireman’s Field and construction of a completely new parking area, major utility projects and the ongoing construction of the Southern Collector Road.
The town has been pondering how best to manage resolution of the FY12 debt and how to use the $1.365 million proceeds from the sale of the former town offices most efficiently.
Last week, following advice from its financial consultant Davenport and Company, the Town Council voted 5-0-2 to issue a general obligation bond of up to $6.5 million. Councilmen John Nave and Patrick McConville were absent for the vote.
The refinancing would allow the town to accomplish several objectives: pay off a note due in April that was issued to cover the construction of the new Town Hall, the parking lot and related improvements at Fireman’s Field; finance various public capital projects, including completion of the Southern Collector Road and other transportation, utility and water system improvements; and pay down the related issuance and financing costs associated with the FY12 debt.
The council also voted to secure a revolving line of credit financing under which it may borrow, repay and re-borrow up to $1.4 million to provide short-term funding for the completion of the Southern Collector Road until receiving reimbursement from VDOT. “This will give us better management of our cash flow,” Mayor Bob Lazaro said after the meeting.
The council previously had discussed the town’s outstanding FY12 debt with consultant David Rose of Davenport and Company and authorized him last month to seek Requests for Proposals from commercial banks for tax-exempt, bank-qualified bond funding.
Rose last week recommended selection of Cardinal Bank to finance both the permanent financing of up to $6.5 million and the line of credit up to $1.4 million. Rose recommended Cardinal’s 2.75 percent interest rate over a 20-year term for the permanent financing with flexible prepayment options as being the best choice. The line of credit with Cardinal would provide the town with a low-cost cash flow tool to manage the VDOT reimbursements for the SCR project, Director of Finance Elizabeth Krens recommended.
Along with the debt situation, the council has been deliberating how best to use the proceeds from the sale of the former Town Hall. Adopting a suggestion made by Rose, the council will put the money in a newly created debt service reserve fund to further pay down the debt between now and 2020.
In other financial action, the town raised the fees charged to the public for use of the Purcellville Train Station to help with maintenance and repair costs. The new rates will go into effect Jan. 1. The town purchased the former railroad station in 2004 from the Purcellville Preservation Association, which had acquired and restored it. Currently, nonprofits are not charged for use, while for-profit groups or individuals are charged $40 per use, which may be of any duration.
The building has become a popular spot for meetings and receptions, now being used on average 600 times a year. To help with the fairly substantial cost to the town for maintenance and upkeep of the historic structure, the town staff first compared usage charges in other jurisdictions and found that most on average charged $40 per hour, although some offered reduced rates for nonprofits.
The new rates are as follows: $200 for full-day use (12 hours); $100 half day; $75 for a four-hour block; $50 two-hour block; $10 for 501(c)(3) nonprofit organizations; and $200 for 12 uses by HOAs. The town also approved a payment of $125 per month to Jason Brownell, owner of the adjacent parking lot, to cover wear and tear on that lot.
The council also formally approved Budget/Procurement Specialist Steve Coakley’s suggested FY14 Budget schedule for the operating budget and five-year Capital Improvement Plan. Departments are to submit their initial CIP recommendations to the Finance Department by the end of this month. Dec. 11, the council will approve any required FY13 budget amendments and hold a public hearing on the CIP. The budget staff kick-off session is slated for Dec. 19.
The town’s financial advisor and rate consultant will give a Jan. 8 presentation on tax rates and fees to the council. Rates will be based on real estate assessment information from the county and the real estate tax advertisement prepared Jan. 28. The personal property tax rate and notice of public hearing will be advertised Feb. 4. March 4 budget public hearings will be advertised along with other tax rates and fee schedules. March 12, the town will hold a public hearing on real estate tax rates, personal property tax rate and personal property tax relief.
On March 14, Town Manager Robert W. Lohr Jr. presents the FY14 budget and CIP to the Budget Committee and council. Public hearings on the budget and other tax rates and fees will be held April 9, following which the council is expected to adopt real estate and personal property tax rates and personal property tax relief. May 14 is the date set for council adoption of the FY2014 budget and five-year CIP. For a full budget and CIP schedule, go to the town’s website at www.purcellvilleva.gov.
The council also voted to adopt the county’s real property tax relief exemptions for the elderly or disabled aged 65 or more who fall below certain income limits through incorporating the county’s ordinance in its own ordinance by reference, rather than voting on a new town ordinance every time the county’s tax exemption provisions are amended. This way, the town’s ordinance would automatically be amended in line with the county’s actions.
The council went into closed session to consult with legal counsel concerning the Community and Farm Market Ordinance and the collection of fees under the ordinance, but took no action on emerging into open session.