Cape Charles, Va. – The Town of Cape Charles is preparing to sell its public water and wastewater utilities to a private company, prompting a comprehensive review of its existing debt obligations. The town currently has four debt instruments dating back to 2010, with a total liability of $4,723,482.29.
The Cape Charles Town Council will review the debt issue at its next Regular Meeting April 18th.
The majority of this debt was incurred to finance the construction of the wastewater treatment plant (WWTP), with additional infrastructure in the harbor and general fund comingled among some of the instruments over the years. Bond Counsel, hired by the town to facilitate the transfer of the utilities, has advised that the WWTP issue must be paid off at closing, while any portion of debt associated with the utility system in the other three issues must be settled within 90 days of closing.
Although it is possible to pay off only the utility portion of the remaining debt, town officials have determined that it would be costly and time-consuming to separate these liabilities. Additionally, there is no prohibition or penalty for paying off all debt, including utility system and other infrastructure, early.
To streamline the process and relieve current debt service payments in future budgets, the town is considering paying off all debt at once. This move would also provide the town with readily available debt capacity if needed in the future.
While the current total value of the debt is $4,723,482.29, this amount is not the final payoff sum, as interest may accrue before the closing and associated payoffs take place. To ensure that adequate funds are appropriated, the town staff has recommended a FY24 budget amendment of up to $5,000,000 for the purpose of eliminating the current town debt.
The proposed budget amendment and debt elimination plan are consistent with the town’s ongoing efforts to responsibly manage its finances and infrastructure while preparing for the sale of its public water and wastewater utilities.
You could save money by letting some officers go and sell off older police vehicles. Maybe stop fixing what’s not broke. Maybe pay off some debts with that money. I personally think someone needs to come down on cape charles like eastville. New Chief, New Town Manager.