City board OKs $16.9M bond issue|[08/16/07]
Published 12:00 am Thursday, August 16, 2007
Shake-ups on Wall Street set conditions for a favorable rate for Vicksburg to borrow up to $16.9 million in general obligation bonds Wednesday.
The Board of Mayor and Aldermen accepted the low bid on 10-year bonds from Duncan Williams Inc., of Memphis, and repayment will be at an interest rate of 4.134667 per year. It was “an excellent bid,” said financial adviser and former Mayor Demery Grubbs, who presented the bids before the board.
The stock market has been on the skids for about 10 days, leading investors to the market for municipal bonds which are more reliable and more predictable. Demand in the bond market has been pushing rates down. “It was a great time to purchase bonds,” said Mayor Laurence Leyens.
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It is the second major bond issue of the Leyens administration. The first, $18.2 million borrowed five years ago, covered a downtown makeover and several other projects. With old debts being retired, City Hall has said annual payments on the municipal debt will remain fairly even at about 8 percent of the $30 million the city collects each year.
Although a firm pledge of no tax increase due to the new debt was made, the resolution of intent passed in September 2006 for Wednesday’s bond issue still attracted the first petition for a city referendum in memory. The challenge was to obtain signatures of 1,500 city voters. When verified, however, the petition submitted by officials of the Vicksburg NAACP had fewer than 1,000 signatures.
According to the resolution, the money will be spent: