On a 5-1 vote Monday night, Halifax County commissioners agreed to use limited obligation bonds to fund the new detention center. 

Commissioner Thomas Barrett cast the dissenting vote, expressing a preference to explore a USDA loan instead.

County Finance Director Mary Duncan stated in a memo to the board that staff, in conjunction with First Tryon Advisors, had reviewed financing options for the new jail. 

Discussions held with the state Local Government Commission resulted in the LGC allowing the county an extended bond period of 25 years, rather than the standard 20, based on the size of the borrowing. 

Duncan noted that the county’s outstanding debt position is favorable, as the LOB option would result in interest savings of $21,158,743 compared to a 30-year USDA loan.

The memo detailed that a 30-year USDA repayment at 4.75 percent on $50 million would total $97,732,743, whereas a 25-year LOB repayment would total $76,574,000.

While the LOB saves money in the long run, the annual debt service for the 30-year USDA loan would be an estimated $3,487,450, versus $4,250,500 for the 25-year LOB — a difference of $763,050 more per year. However, by 2036, the difference between the two annual payments narrows to $16,000, after which the LOB repayment becomes the smaller of the two.

Duncan noted that the debt for Inborden School and the Department of Social Services building will be retired in June, freeing up $1,133,000. Additionally, the $165,933 Qualified School Construction Bond for Roanoke Rapids and Weldon will be paid off in September. The Manning Elementary School debt payment is set to mature in May 2031.

Barrett raised concerns that the LOB lacked flexibility, noting that a USDA loan could be paid off early. Duncan clarified that while that is true, the bonds could also be refinanced down the road if the county secures a better rate.

Barrett discussed a scenario involving overextended funds or a catastrophic event. “USDA is going to work with it. USDA is going to look at it,” he said. 

Regarding bonds, he added, “You’re obligated. You’re stuck — and if you don’t believe it, go ask the city of Roanoke Rapids. They are stuck with that theater; they refinanced it twice and they’re still stuck.”

County Manager Dia Denton said staff brought the information back to the board because interest rates had shifted. “I understand your point that you can repay the USDA loan and there’s no penalty,” she said. 

However, she added, “We can’t predict who’s going to be sitting in your seats in four, six, eight, or 10 years. On the one hand, they could be obligated to the limited obligation bond, or they may not want to prepay (a USDA loan). You have to weigh those options too.”

Denton also noted that a USDA loan would likely slow the project down. “With USDA, you still have to match up your financing calendar with your construction calendar, and it’s more likely that the USDA option would slow you down.”

Commissioner Jimmie Silver made the motion to proceed with the LOB, which was seconded by Sammy Webb. Commissioners Chenoa Richardson Davis and Board Chair Vernon Bryant also voted in favor of the LOB.