TUPELO • City leaders look primed to approve a request from Mayor Jason Shelton’s administration to issue $10 million in bonded debt to fund future projects.
The Tupelo City Council convened for a work session on Thursday and learned about minor changes to the plan. These changes will add $600,000 in overall expenditures compared with the initial plan.
The administration currently plans to spend $8.9 million out of the overall $10 million bond intent. The city will have around 36 months to spend the money and will reserve the remaining $1.1 million as a safety cushion in case any projects run over budget.
Since the first draft of the plan, the administration now plans to spend $300,000 more on the city’s parks and recreation department and $285,000 more on drainage work, bringing the totals to $1.6 million and $785,000 respectively.
Shelton, at the counsel of the city’s financial advisors, believes the city is in good financial condition to take on the bonded debt.
“What is remarkable is since this council and our administration took office, the general obligation debt has been reduced by about $13 million,” Shelton told council members. “The city of Tupelo is in great financial shape.”
The general obligation bond debt is a subtotal of the city’s total bond debt.
Numbers provided by the city’s financial department show that when Shelton took office in 2013, the city had $59.7 million in total bonded debt. Now, the city currently has around $60.8 million in total bonded debt.
In a telephone interview with the Daily Journal, Shelton said the total debt figure has increased because of the $15 million in revenue bonds the city issued to pay for the BancorpSouth Arena expansion. But, Shelton highlighted that the subset of the total debt composed of the general fund obligation bonds has seen a decrease.
“What that does is it allows the city to operate easier for lack of a more technical way to say that,” he said. “If you have a home mortgage and the amount of debt is reduced on the mortgage, that brings up income for your family to use,” he said, comparing a mortgage to the city’s bonded debt.
Shelton said his administration has paid down the general obligation debt while still investing in projects such as the police department, revitalization on Ida Street and purchasing new equipment.
As of Friday, a majority of the members of the City Council indicated they planned to support the $10 million bond intent and vote in favor of it.
Ward 1 Councilman Markel Whittington told the Daily Journal that he supports many of the projects in the bonded plan and believes the bonded debt is necessary to fulfill many city projects.
“When you separate your capital expenditures from your operating budget, that’s an intelligent way to manage both,” Whittington said.
Ward 4 Councilwoman Nettie Davis said she also plans to vote for the bond plan whenever the issue comes before the council.
“I’m supportive of everything we have in there,” Davis said. “I’m very excited about the stage in Gumtree Park and supportive of the renovations to the Bel Air Center.”
Ward 5 Councilman Buddy Palmer was absent at the latest work session. He said he was still reviewing some of the minor changes, but believes he would support the plan. Likewise, Ward 3 Councilman Travis Beard said he intended to support the plan.
Some of the major items the city intends to use the bonded dollars for are renovations to the Bel Air Center, building infrastructure to the Fairpark District for its next phase, street repairs and replacing a fire station.
This bonded plan comes after the city officials approved a separate $3 million capital plan as part of its overall budget in September. That smaller plan uses dollars from the city’s general fund to invest in projects or big-ticket items.
Don Lewis, the city’s chief operations officer, told the Daily Journal the administration believes the projects the city wants to use the bonded money for are “diverse projects” that are wise investments for the city.
“We’re frugal and prudent in that we’re paying off our bonded debt, and we’re reinvesting in the city,” Lewis said.
The council is expected to vote on the final version of the plan sometime in January.