Surry County is looking to borrow up to $24 million to fund construction of a YMCA.

According to Board of Supervisors Chairman Robert Elliott, the facility would be built on county-owned land adjacent to the existing county Parks and Recreation Center at 205 Enos Farm Drive.

The board voted unanimously on April 23 to authorize the county’s financial advising firm, Davenport & Co., to solicit financing options. Supervisor Amy Drewry was absent.

The county plans to hold a public information session and public hearing on to-be-announced dates in May regarding the proposed lease agreement and would hold a separate hearing in June before voting to take on the additional debt.

“Nothing is binding at this time,” Elliott said.

County Attorney Lola Perkins said Surry had received a signed letter of intent from the YMCA of the Virginia Peninsulas as well as a draft lease agreement that’s pending her review. The county would foot the cost of building the facility and then lease it to the Y, Perkins said.

It’s a model the Y uses in many communities, Surry economic development consultant Renee Chapline said. The Luter Family YMCA in Smithfield, which is housed in the Isle of Wight County-owned former Smithfield High School at 259 James St., operates under a similar agreement. The Smithfield Y is the closest to Surry at roughly 18 miles, or a half-hour drive.

“Surry County is interested in determining how the YMCA could address the community’s needs by providing services and programming to enhance its citizens’ quality of life,” Skip Ferebee, chief strategy officer for the Y of the Virginia Peninsulas, told the Times. “To this end, the YMCA conducted an anonymous market study last summer through a consulting firm to survey the community’s wants, needs and desires to assess their alignment with the services and programs the YMCA offers. This is a standard initial step in the YMCA’s discovery process.”

The results of that survey, which Ferebee said would be presented at a future supervisors meeting, “strongly suggest that the Surry County community has interests focused on family engagement, indoor aquatics and diverse activities promoting physical and social well-being. Specifically, the demand for youth development programs aligns with the YMCA’s specialized offerings.”

A capital improvements plan for one-time expenses included in last year’s county budget included plans for a debt-funded $10 million for a public swimming pool, amphitheater and banquet hall at the Parks and Recreation Center, but the money wasn’t borrowed and the plan didn’t move forward when the opportunity to partner with the Y presented itself.

Ferebee said the site, facility layout and program offerings at the proposed Surry Y would be defined during the master site planning phase, which would be the next step if Surry borrows money to fund the project. After that, a timeline can be developed for the start of construction.

“It’s important to note that the YMVA is inclusive, and no one is turned away due to an inability to afford membership,” Ferebee said. “Financial assistance is available through the annual impact fund.”

 

Financing options

A representative of Davenport presented multiple options at the April 23 meeting that Surry could finance the new Y depending on whether it borrowed $20 million or $24 million.

The plan calls for Surry to obtain interim financing this spring or summer for the first $10 million by soliciting bids for a direct bank loan. Surry would seek a second round of financing in 2026 for the remaining $10 million to $14 million.

Options for the second round of financing include another direct bank loan, authorizing the public sale of county bonds on credit markets based on Surry’s credit rating, or applying to the Virginia Resources Authority’s pooled financing program, which the state describes as providing local governments with public debt market access at competitive interest rates.

Interest rates are currently around 4.5%.

County Administrator Melissa Rollins said during the presentation of her proposed 2025-26 budget that Surry is currently carrying $23.28 million in debt, of which $19.46 million is principal and the remaining $3.8 million is interest.

By policy the county caps annual debt payments at 12% of General Fund revenue and expenditures, and its total debt at 3% of the total assessed value of taxable property.

According to Davenport, Surry’s current $2.2 million annual debt payment amounts to 5.78% of projected revenues and expenses, and its total debt amounts to 0.6% of the valuation of taxable property.

Taking on an additional $20 million to $24 million in debt would raise Surry’s annual debt payments to 8%, which is still well below the 12% policy threshold, and would raise its total debt to just over 1%, which is also still below the 3% limit.

“Its good to know we are in such a strong position to take on something like this,” Elliott said.

According to Davenport, no real estate tax increase would be needed to cover the new debt in the 2025-26 fiscal year that will start July 1. Rollins’ proposed budget proposes setting aside for future needs just under $2.3 million in expected 2025-26 revenue, about half of which is tied to a $1.1 million one-time influx of additional car tax payments from a change in the billing schedule county supervisors made last year.

Davenport, however, advised that an influx of $384,000, or the equivalent of a 1-cent real estate tax increase, would be needed in fiscal year 2026-27, and another 1-cent increase would be needed in 2027-28, to cover the second half of the new debt. Another half-cent to 2-cent real estate tax rate increase would be needed in fiscal year 2030-31 depending on whether the second round of borrowing for the Y is for $10 million or $14 million. That’s a worst-case scenario that assumes no new growth or economic development that would bring in additional revenue.

Elliott said Y will be something tangible residents can see as what they’re getting for their tax money.

“Hopefully, we will have a Y in Surry County,” he said.