Purcellville Council Briefed on Debt Reduction Options

Purcellville Town Council is moving ahead with its utility debt restructuring.

Last week, representatives of the town’s financial advisor, Davenport & Co. presented three series of utility debt that can be restructured. The firm recommended tax-exempt bank qualified bonds to refinance $5 million in debt. Six banks offered bids. Middleburg Bank proposed a 10-year bond at 2.7 percent interest or a 15-year bond at 2.85 percent. Sterling National Bank offered a 20-year bond at fixed rate of 3.22 percent. Davenport recommended the council move forward with the longer-term bond from Sterling National.

Another selection of taxable outstanding debt, totaling $15.9 million, was recommended to be refinanced in a public bond sale, eyed for completion this fall.

The town’s Enterprise Fund has approximately $41 million of debt outstanding. Under current conditions, debt service payments will increase roughly $2 million in the next five years. Also, the town has a $1.44 million balloon payment due in fiscal year 2021. Over the next five years, the town is expected to have an additional $10 million of capital needs solely to maintain the system in proper working order.

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