City OKs financing package for bonds

Published 12:00 am Wednesday, November 7, 2001

[11/07/01]With an interest rate characterized as the lowest in 30 years, a bond issue financing package for public works and downtown revitalization won city approval Tuesday.

The $17.5 million from the sale of the general obligation bonds will be available for the city to spend around Nov. 28. Mayor Laurence Leyens said he expects the projects being funded by the bonds to begin in February.

“The time is right for Vicksburg to make an investment in itself,” Leyens said. “I want to publicly challenge the county supervisors to do the same.”

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Leyens said he wants to encourage county residents to contact their supervisors and ask that the Warren County Board of Supervisors borrow money while interest rates are low and use that money for community improvements. But board president Richard George said that is not in the board’s plans.

“We have made a deliberate effort to use gaming revenue to make infrastructure improvements to avoid a tax increase,” George said.

The city received only one bid from investors and accepted that offer with an interest rate of 3.72 percent. At that rate, the city will repay $21.3 million over a 10-year period, City Strategic Planner Paul Rogers said.

Payments will be about $2.3 million per year, Rogers said.

The obligation bonds may be paid back through an increase in 2002 in the rate used to calculate property taxes unless property values increase from the investment and offset the cost of the debt. That increase could be about 7 mills, or $1 for ever $1,000 in assessed property value, Rogers said.

The money will fund downtown revitalization, area road work and the development of city Front.

Demery Grubbs, former Vicksburg mayor and a partner in the Jackson financial consulting firm hired to conduct the bond issue, said the interest rate is the lowest for general obligation bonds he has seen in his 11 years as a consultant.

“My compliments to the administration for doing this at this time,” Grubbs said. “I don’t know if you could pick a better time.”

Previous city bond issues have been for paving projects, construction of the city pool and other capital work including the Vicksburg Convention Center, which opened four years ago and cost about $13 million. The average amount borrowed and repaid from tax funds is about $6 million.