by AnnGardner Eubank
KILMARNOCK—The Kilmarnock Town Council on Monday, September 20, unanimously accepted a proposal from Chesapeake Bank for interim financing for the town’s waste water treatment plant project.
Those who voted in favor included council members Kylie Abbott, Mike Bedell, Emerson Gravatt, Les Spivey and Curtis Smith, 5-0. Councilman Don Lee was absent.
Chesapeake Bank’s proposal for financing offered a fixed interest rate of 1.69% of the $6,611,000 USDA loan the town had received with an all in cost to the town totaling $111,726.
Spivey said it would be a smart idea to choose a bank that offered a fixed interest rate as opposed to a variable rate even if the projected total cost to the town is higher because of the uncertainty of how high the variable rates could fluctuate.
Other banks that submitted proposals included Co Bank, VML/VACO and Blue Ridge Bank.
According to a side-by-side comparison provided by town manager Susan Cockrell, Co Bank’s proposal offered a variable rate that was based on the London Interbank Offered Rate (LIBOR) resetting weekly plus 1.25% all to be paid monthly, for an approximate $89,249 in interest costs. Additionally, Co Bank’s proposal included another $2,500 in additional fees and an estimated $7,750 in bond counsel for an estimated total of $99,499….