PROCTORVILLE — The inaugural program geared to boost the interest rates the county gets on its money will start with an investment in the village of Proctorville.

County Treasurer Stephen Burcham plans to buy a bond to be issued by Proctorville’s council with a face value of up to $200,000. That bond will pay off a current loan the village has with a Huntington, W.Va., bank that is coming due.

The loan financed renovations to the village’s water plant. The village also wants to buy two used police cruisers.

To renew that loan the bank was offering the village a seven-year note at 5 and a half percent interest rate. However Burcham will provide the village with terms of five years at 2 percent rate. Five years is the maximum period the ORC allows Burcham to offer.

“This gives us the ability to assist a community within our county and increase our interest rate,” the treasurer told the County Commission at its Tuesday meeting. The commissioners met two days earlier for their regular meeting because of the Thanksgiving holiday.

With a struggling economy the county has watched the interest it earns on certificates of deposit drop dramatically. The last CD to come due this year currently has an interest rate of 5.05 percent expected to bring $141,000 into general fund.

But in the past year the highest rate Burcham has found for renewing five-year CDs has been 1.7 percent. That is why Burcham started the Neighborhood Investment Program using a state statute that allows him to use county money to purchase the bonds issued by other political subdivisions within the county.

“Two percent is more than I have received from banks here,” Burcham said.

Right now the county has $12 million in investments with $5 million in cash.

“We could invest substantial dollars in political subdivisions if the need arose,” Burcham told the commissioners. “You would want to evaluate the risk inherent.”

While not requiring their approval Burcham received the support of the commissioners who viewed the program as a way for the centralized county government to help villages and other entities.

“It could be a very good way to help Lawrence County’s neighborhoods,” Commission President Les Boggs said. “I don’t see much of drawbacks. But what would happen if they defaulted?”

Burcham said the county could withhold taxes going to the entity that did default.

“It appears (Proctorville) has the wherewithal to make payments,” he said.

The village will make semi-annual payments and will save up to $40,000 in interest costs.

Although not involved with the negotiations, Mayor-elect Rick Dunfee supported the arrangement.

“What I see of it, it will be a good thing for us,” Dunfee said. “It will save us money.”