City officials support issuing bonds for infrastructure needs

The mayor and Jackson City Council appear to be on the same page when it comes to leveraging one-percent dollars for infrastructure improvements.

Recently, the city council passed a resolution in support of issuing bonds to pave roads and fix water and sewer mains and using one-percent funds to retire the debt.

However, before Jackson can issue any more long-term debt, council members and the mayor say the city first needs to make sure its financial house is in order.

The resolution passed unanimously. The measure was non-binding and was approved only to show support for using the infrastructure tax to issue debt.

“It’s just a resolution saying if we could find out how to get some financing to get (infrastructure work) done sooner, rather than later, we ought to look at doing that,” said Ward One Councilman Ashby Foote.

The motion was introduced by Ward Three Councilman Kenneth Stokes, who said residents are seeing little progress the way one-percent dollars are being spent today.

He urged council members to vote in favor of the resolution, despite some members of the one-percent oversight commission voicing opposition to taking on additional debt.

“Anything dealing with bonds is supposed to be the governing authority’s (responsibility), which is the city council,” he said. “We need to act quickly, because the streets aren’t getting any better.”

The fund generates about $14 million a year. So far, the city has spent the revenues on a “pay-go” method.

With an estimated $2 billion in road needs alone, the $14 million is barely making a dent.

“Let’s use $6 million … that will generate $45 million to $50 million, money we can use to pave the streets,” he said.

Council President Melvin Priester said he supports issuing a line of credit and drawing down on the funds as needed.

“People want to see some big results. Right now, we’re doing maintenance around the edges,” he said.

The tax was implemented in 2014.

Through May, it had generated approximately $59.2 million. Of that, $24.7 million had been paid out to contractors.


Mayor Chokwe Antar Lumumba was not opposed to the motion. However, he said there are still a “number of financial questions” out there.

“We are going to leverage those funds, but we have to have our financial house in order,” he said.

Among concerns, Jackson’s bond debt payments are about to skyrocket.

This year, the city is expected to pay around $7.9 million in principal and interest on its outstanding general bond obligations.

In fiscal year 2019, which begins in October, the payment will jump to nearly $10.6 million, and the year after that, it will increase again to $13.4 million.

The amount will remain around $13.4 million through 2024, before dropping off to around $6.5 million a year, according to city documents.

The budget year runs from October 1 to September 30 the following year.

Also, the city won’t have a clearer picture of its financial situation until its comprehensive annual financial report (CAFR) is completed.

The report was due on June 30 but had not been finished at press time.

The audit has been delayed in part, because of questions with water and sewer billing.

Essentially, the city has a large number of “aging accounts,” or accounts that have been on file for years but have gone unpaid.

Under state law, the city can’t write off the debt, and must keep it on the books and has counted it as revenues to be collected.

Priester didn’t know exactly how much the aging accounts accounted for in terms of revenue, but estimated the amount could be in the millions.

“This stuff pre-dates Siemens and the change over in the billing system,” Priester explained. “A lot of it is coming to a head because we have new auditors who want to settle these numbers.”

Last October, the city brought on Tann, Brown and Russ Co., of Jackson, to conduct the audit. The firm replaced Banks, Finley, White and Co., who had compiled the CAFR for several years previously.



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