New Kent leaders hear possible options for funding new school, courthouse complex

New Kent Board of Supervisors received information in regards to financing two Capital Improvement Plan (CIP) projects for future consideration.

Davenport and Company representatives presented three options to New Kent Leaders on how to finance the construction of a new elementary school and a new courthouse during Monday morning’s work session. In total, the projects total $130 million.

When presenting the options, Tripp Lawrence and Ted Cole of Davenport and Company indicated the options they were presenting would not be in compliance with county practices, but there were ways to adjust the borrowing of funds to meet those regulations.

Option one would be borrowing $65 million to focus on one project. To make that scenario work without a tax increase, the county would have to contribute $2.3 million from cash reserves. If the county elects not to contribute funds for this option, a two-cent tax raise would likely take place in FY2028. There is also an option to split the tax raise, adding a penny in FY2027 and one in FY2028.

In order to be in compliance with current policies under option one, the county would have to shorten the lifespan of the loan to 18 years. They would also have to increase their cash contribution to $3.2 million, but representatives of Davenport and Company said that this option was feasible and wasn’t far off their initial contribution to a singular project.

Both option two and option three focused on funding both projects, but in different ways and with different scenarios. In option two, funding both projects would require $46 million in cash, something the county currently doesn’t have on hand. Cole commented that at the time, to fund the projects the county would have to decide the cash contribution, which would effect the cost and tax rate for the next few years.

In option two, 1.7 pennies would be needed in 2027 per project, bringing it to roughly 3.4 cents. In total, nine cents would be required to do so. Cole said that the project could be spread over FY2026 and FY2027 to spread the impact, where the county could get by with four pennies in 2026 and five pennies in 2027. However, if the county wanted to stay in compliance with their policies, the borrowing maximum for both projects would be $74 million and the county would need to have $55 million in cash to fund the project, with the borrowing’s lifespan being 17 years.

Option three would consist of staggering the borrowing over two years in FY2026 and FY2027. More cash would needed to be contributed upfront, with a tax increase from five to nearly eight cents added to help fund the project. The tax rate would more than likely dropped as the lifespan of the project passes, with anywhere from three to four-and-a-half pennies needed for the project. The borrowing for each of the staggered years would be $65 million.

County leaders took in a lot of information regarding finances of the proposed budget as they prepare to hold a budget public hearing on Tuesday, May 6. Supervisors cannot act on the proposed budget by law until 10 days have passed.