Town Council OKs New Loan, May Borrow Another Million

Cape Charles Wave

November 18, 2013

Cape Charles Town Council voted November 14 to refinance two loans for $1.215 million at a variable interest rate and begin preparations to borrow $1 million more. Borrowing additional money requires a public hearing, scheduled for December 5.

Richmond financial advisor David Rose of Davenport & Company urged Council to take advantage of historically low interest rates with a 20-year loan from PNC Bank.  The interest rate would be 2.65 percent for 10 years and then change to whatever the market rate is in 2024.

Rose claimed the PNC loan did not have a variable rate because the interest rate would only change once. But according to Wikipedia, “variable rate” refers to any type of loan “that does not have a fixed rate of interest over the life of the instrument.” (Click for definition.) Rose’s fee to the Town for arranging the new loan is $37,500.

Councilman Frank Wendell asked Treasurer Kim Coates how much debt the Town currently has. Coates was unable to say, but Rose thought it was around $8 million or $9 million. After consulting with bond counsel Kevin White, he revised that estimate to “about $10 million.” [Read more…]


THURSDAY 11/21: Ladies Night Shopping at Local Merchants

Thursday, November 21, from 5-8 p.m. is Cape Charles Ladies Night on Mason Avenue, Strawberry Street, and Randolph Avenue. [Read more…]