Funds would go toward school, safety building

By Robert King -- Daily Staff Writer

FRONT ROYAL — Warren County may need to raise taxes to help pay for school renovations and a new public safety building.

A Richmond-based firm on Tuesday presented the Board of Supervisors with options for renovating the old Warren County High School on Lu-ray Avenue. A county official said the board may have to raise the real estate tax rate by two cents per $100 of assessed value in the next fiscal year. Half the revenue would go to the renovations, and the other half toward a public safety building to house the sheriff's office and other departments.

That could be the only tax revenue needed for the projects, and additional revenue from a county meals tax or other sources might negate the need for a hike, said County Administrator Douglas P. Stanley.

The real estate tax rate is currently 45 cents per $100 of assessed value. The supervisors didn't raise the rate this fiscal year, which started in July and ends in June 2009.

The renovations are part of the second phase of a 20-year facilities plan, the first phase of which was completed last fall. Warren County High School moved to an expanded junior high school building, and Skyline High School opened for the first time.

The first part of the plan's second phase focuses on converting the old Warren County High School into a middle school. The project is estimated to cost $27,147,985.

The county hopes to get at least $2.6 million from a historical tax credit because of the building's historical significance, and hopes to get $7.5 million from a state literary loan.

Ted Cole, who works for Richmond-based firm Davenport & Company LLC, presented three funding options for the remaining $19.7 million. One option is to get a lease-revenue bond, another is a bond from the Virginia Public School Authority, and the third is bank financing.

A lease-revenue bond is easier to refinance, but requires bond insurance. Cole said the price of bond insurance has increased because of the poor economy, and "doesn't look quite as attractive as in the past."

Funding from the VPSA doesn't require bond insurance, but a bond is harder to refinance, Cole said. "They say when it happens, how it happens," he said.

Davenport had already requested non-binding bids from banks. BB&T offered a fixed-interest rate of 4.73 for the loan.

The annual payments for a VPSA bond are $45,000 cheaper than a BB&T loan on average per year, according to a Davenport analysis. That could change if the rate on the VPSA bond increases, the analysis reads.

Cole and Stanley recommended that the board provide some direction on the subject sometime next month.

* Contact Robert King at rking@nvdaily.com

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