Mayor proposes using rainy day money for city’s debt
Published: October 14,2013
TUPELO — Mayor Jason Shelton wants to use about $5 million from the city’s rainy day fund to pay off part of its $30 million in bonds.
That could save up to $825,000 in interest over seven years, freeing up cash for big capital items such as fire trucks or tornado sirens, he told The Northeast Mississippi Daily Journal.
Shelton wants to use $1.4 million to $2 million a year in cash for Tupelo’s capital budget, with some of that from savings on annual debt payments.
“Most everybody agrees the capital plan is a good thing,” Shelton said. “We have to make investments in our community.”
He has not presented a plan to the City Council.
Councilman Lynn Bryan said the $18.5 million reserve fund brings in little interest, doing little good for taxpayers.
“I think we should first determine what an adequate reserve should be and use any surplus on capital funding and debt service,” Bryan said.
During the city retreat in August, Tupelo CFO Lynn Norris said the city should keep at least 25 percent of the city’s operating budget, or about $8.5 million, in reserves.
But Councilman Jim Newell says he thinks the reserves are where they need to be.
With interest rates for municipal bonds still hovering in the 2 to 3 percent range, Newell said the city would be smart to consider issuing bonds for long-term projects.
— The Northeast Mississippi Daily Journal
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