County, town agree to co-sign for Middle Peninsula planning group

The Middlesex County Board of Supervisors and Urbanna Town Council have agreed to support The Middle Peninsula Planning District Commission (MPPDC) by backing them with a moral pledge and to serve as third party cosigners, along with other MPPDC locality members, for a $500,000 line of credit from the Virginia Resources Authority (VRA).

“The line of credit is necessary to turn grant dollars over monthly when normal cash flow is exceeded,” wrote MPPDC Executive Director Lewie Lawrence in an email to Town Administrator Ted Costin.

“MPPDC must cover costs before grant funders will release reimbursement and grant projects like housing, living shorelines, septic/wells and dredging are big ticket costs and it is becoming more commonplace to have months where contractors need payment in excess of normal and customary levels.

“VRA has approved MPPDC for a $500,000 line of credit that can be accessed in 30-45 days while reimbursement is from grants being processed. VRA is asking member localities to enter a third party position and offer a moral pledge and serve as a cosigner,” he said.

“The first level of collateral is the grant agreement which the draw is tied to; the second position is MPPDC unrestricted General Fund (around $500,000) and  third is the pro-rated moral obligation pledge. There is a fourth level called state aid interceptor, but that is beyond likely to be needed,” said Lawrence.    

If all nine MPPDC localities participate the moral obligation is pro-rated at $71,429 per county and $23,809 per town. This is a moral obligation as a “co-signer” and not a cash payment to MPPDC…