Getting your Trinity Audio player ready...

Over the last four years, the Town of Farmville has approached the budget in a different way, taking out a loan to cover some costs. This is how they’ve been able to buy police cars and other needed equipment, staggering the payments over several years. Residents have asked several questions about the proposed budget and the details around the loan process being used, so we thought it was a good time to go over it. 

The current proposed budget is for $43,367,489. That consists of $33,341,990 in the general fund; a total of $2,621,672 in the street maintenance fund; $3,176,458 in the water fund; $2,688,059 in the sewer fund; $1,159,745 in the transportation fund and $379,565 in the airport fund. In the general fund, town staff want to spend $956,000 to make a series of purchases. That includes $231,000 for five police cars; $75,000 for graphics and outfitting for those cars; $60,000 for a new emergency medical services (EMS) vehicle; $25,000 to outfit the EMS vehicle; $180,000 for a tractor/mower to mow the right-of-way on the street; $80,000 for a pickup with a lift gate; $225,000 for a dump truck and $80,000 for a ¾ ton utility truck. 

“We don’t have the cash today to (pay for) all the capital needs that we have,” Farmville Town Manager Dr. Scott Davis told the town council during their Wednesday, April 9 meeting. “But we can afford that over a five-year period.” 

Previously, Davis said, the town had gone more than a decade before replacing police cars. And as a result, they got very little when they sold the old ones at auction. It makes more sense, Davis said, to replace the vehicles every five years. That way, the town can get more out of the old ones at auction. 

How is the Farmville loan structured? 

Going beyond that, The Herald asked Davis how the loan is structured each year and more details about the process. First, this loan would be paid back over a period of three to five years. That timeframe depends on the final terms received from the bank. Once the loan is fully repaid, any liens on the equipment, such as the police vehicles and other purchases, will be released. 

One key part of this is while the loan is part of the budget and has to be approved as such, no part of the $956,000 will be paid during this upcoming budget cycle. 

“The (Fiscal Year 2026) budget does not include any repayment for this loan,” Davis told The Herald. “Payments typically begin in the fiscal year following the loan’s approval and closing.”

So in other words, it’ll be this time next year that you hear council members discussing making the first payment in this latest loan. 

Also, no interest rates or other details have been mentioned because they don’t exist yet. 

“At this time, the interest rate is unknown,” Davis told The Herald. “We will not know the exact rate until the loan is officially put out to bid to banks. That said, municipal loan rates are typically a bit lower than what individuals would receive for a personal loan.” 

But this is why, when council members have brought up postponing purchases of the police cars or trucks, town staff has said that wouldn’t reduce this year’s overall budget. We don’t start paying for all of these vehicles until next year. The goal is to avoid ending up like some other towns and cities in Virginia, which kept putting off infrastructure and equipment purchases until it got so big they had to make dramatic decisions to cover the cost.

One of those is Purcellville, where the town council back on April 8 voted to move forward with eliminating the police department. The move would save the town $3 million, by transferring law enforcement responsibilities to the Loudoun County Sheriff’s Office. It wasn’t a well-received decision, as Purcellville council members now face protests and recall petitions to put them out of office. 

What happens next? 

Meanwhile, here in Farmville, while the tax rate has been set, the actual budget hasn’t been agreed to yet. That will be discussed in special called meetings of the town council on Wednesday, April 23 and Wednesday, April 30, both starting at 6 p.m. The public hearing on the budget, meanwhile, is set for May 14, also starting at 6 p.m.