Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, November 4, 1994 TAG: 9411040079
SECTION: CURRENT PAGE: NRV1 EDITION: NEW RIVER VALLEY
SOURCE: BRIAN KELLEY STAFF WRITER
DATELINE: CHRISTIANSBURG LENGTH: Medium
Sixty percent of Montgomery voters approved the two projects in a referendum a year ago, but the county Board of Supervisors delayed the bond sale until this fall to avoid a larger tax increase last spring.
Selling the bonds in the next three weeks means the county will have the cash necessary to begin construction on the two projects early next year. Supporters have been waiting for more than four years for this, ever since voters in 1990 rejected an earlier bond referendum.
Of the bond issue, $1.9 million will go toward the renovation and expansion of the Blacksburg branch of the Montgomery-Floyd Regional Library system. Another $2.9 million will pay for the construction of a new health and human services center in Christiansburg.
Work is to start on the new health building in February and on the library in April or May. Both are scheduled to be finished a year later. The new health building will be on Pepper Street in downtown Christiansburg, behind the social services building.
On Wednesday, county officials received audit figures for the fiscal year that ended June 30. A computer software problem in one county agency delayed completion of the audit - and the bond sale - last month. But with that resolved and the audit figures in hand, the county can prepare a final draft of the official statement to accompany the bond sale, said Assistant County Administrator Jeff Lunsford.
"Right now the [county's] financial adviser is looking at different days" to sell the bonds, Lunsford said. "It's going to be locked down very shortly."
A general obligation bond is in effect a loan to a local government on which investors earn interest that's exempt from federal and state taxes. The bonds are considered low-risk investments in Virginia because the government's full faith and credit is pledged to repay them - meaning taxpayers are responsible for paying the principal and interest over the full term of the bonds.
Under rules approved by the Board of Supervisors, the soon-to-be-issued bonds will mature in no more than 21 years. Moreover, the true interest cost to the county cannot exceed 9 percent per year.
The sale in Montgomery will be a competitive sale rather than a negotiated one, Lunsford said. That means banks and other financial agencies will form syndicates and make bids on the bonds. Lunsford and the county's bond adviser will take the bids and figure out which has the cheapest true interest cost.
The winner will then serve as underwriter to market the bonds out to corporations, investment houses and even individuals, Lunsford said.
by CNB