NVDAILY.COM | Local News
Posted June 22, 2012 | 14 Comments
Regional jail cost figures less than planning model
By Sally Voth -- email@example.com
Debt service for the RSW Regional Jail will be $26 million less than a planning model predicted earlier this year, the jail's authority was told this week.
Ted Cole, of Davenport and Co. LLC, gave an update on financing to the authority, which consists of three representatives each from Rappahannock, Shenandoah and Warren counties, on Thursday.
The final total net debt service figure is $79 million, $26.1 million less than the $105.1 million estimate from Feb. 7. The gross debt service will drop from $153.8 million to $122.7 million.
Cole explained the discrepancy was due to a 5-percent interest rate being used in the planning model, although planners knew that figure was above the market rate. He said they wanted to have some cushion.
"We're about $950,000 less in annual debt service than what we had been planning over the last several months," Cole said.
That annual number would have been about $1 million had there not been a delay in the sale of jail bonds, he added.
When jail bonds were sold by the Virginia Resources Authority earlier this month, the interest rate was about 4 percent, up from the 3.9 percent rate in the May bonds sale where the VRA initially placed the jail bonds.
The lower debt service amount means the impact on the real estate tax rate in each jurisdiction is less than that used in the planning model.
The planning model predicted the tax impact would be an additional 5.1 cents for $100 of assessed value in Shenandoah and Rappahannock counties by 2021. The final figures show the increase instead at about 4.2 cents in Shenandoah County, and around 4.4 cents in Rappahannock County.
Warren County's tax impact is 6.9 cents by 2021, rather than the 8.2 cents predicted in the planning model.