City to borrow $5.4M for work on utilities

Published 12:00 am Thursday, June 26, 2003

[6/26/03]Vicksburg officials announced Wednesday plans to borrow another $5.4 million to pay for water, sewer and gas work.

The mayor and aldermen authorized Harris Geno Dunbar, bond counsel, and Holley, Grubbs, Mitcham & Phillips, financial advisers, to prepare documents to issue the general obligation bonds.

The issue will be the second time during the current administration that the city has borrowed money for public improvements, and the final amount has not been determined.

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“We’ve got serious public works deficits that need to be taken care of, and this is in response to what the community asked for,” said Mayor Laurence Leyens.

The money from the bonds will go toward installing six new water wells, additional fire hydrants and water lines in the north and south annexed areas, improvements at the waste water treatment plant and electronic water and gas meters. Some of the signal-emitting meters are already in use. They transmit meter information to readers sitting in nearby vehicles, speeding the process and reducing the chance of error.

In total, the city plans to take on about $8.1 million in improvements, but will use a $2.7 million federal grant to fund part of the project, said city strategic planner Paul Rogers. The bonds will be issued for 15 years and repaid from utility revenues.

In November 2001, the city borrowed a record $17.5 million to fund downtown revitalization, street repaving and a proposed softball complex. Repaying the loan costs about $2 million each year out of the city’s general fund, but has not resulted in a tax increase.

Leyens said that with the new bond issue, Vicksburg residents could expect increases on their utility bills to repay the loans.

“We feel like what we need to do is just raise the bills slightly,” Leyens said.

He said previous administrations had dug only enough water wells at a time to meet demand for four years and that some residents in the annexed areas still do not have adequate fire protection or large enough water lines.

“If we don’t do it now, we’re going to have to pay the piper somewhere down the line,” Leyens said.

The wells, near the Vicksburg Harbor, silt in and become less productive as they age. The last city annexation became effective in 1990, and extending city services to the more than 20 square miles added has been an ongoing process.

Demery Grubbs, one of the financial consultants for the bonds and the former Vicksburg mayor who started the annexation process in 1982, said his firm will also look at refinancing a 1994 bond issue on which the city still owes about $2.1 million.

“What we want to do is look at some of the older debt and blend it in to save money,” Grubbs said. Interest rates are at record lows. Grubbs’ firm is paid a percentage based on how much money is borrowed.

The next step will be for the city board to adopt a resolution of intent and give public notice of plans to borrow. Residents will then have 30 days to file a petition at City Hall and call for a public vote on the bond issue. There was no objection voiced to the last bond issue.