The Meridian City Council moved forward with a plan to take out a $6 million bond for infrastructure projects Tuesday during its regularly scheduled meeting.
The council adopted a resolution to issue the bonds and get quotes on potential interest rates.
Ward 1 Councilman and Council President George Thomas said Meridian residents should understand the resolution was not a final approval.
The action taken, he said, would give the council a chance to see what the interest rate would be before accepting or denying the bonds.
“If it’s 6-7 percent, we aren’t going to approve that,” he said.
The council adopted a resolution for up to $12 million in bonds for infrastructure projects in June 2020. However, only $6 million was actually issued.
Tray Hairston, with Butler Snow, LLC, said the resolution approved Tuesday was the other half of the $12 million approved last year.
“In this transaction before you is a resolution not to exceed $6 million,” he said. “The reason for that is the issued $6 million last year for certain projects, and that not to exceed has not reached it’s full amount so we’re back before you with the remaining $6 million.”
Harrison said Butler Snow would take the resolution to the Mississippi Development Bank next Wednesday to get quotes on interest rates for the city. The council, he said, would get that information and be able to vote on the bond in December.
If approved, the bond would be repaid using the city’s portion of internet use tax collections. In 2018 the Mississippi Legislature approved a tax on online purchases, with the portion of revenue going to cities and counties increasing from 25 percent to 100 percent over four years.
The 2020 $6 million bond is also being repaid with internet use tax funds, and Chief Financial Officer Brandye Latimer confirmed to the council there were enough funds to cover the additional bond payment.
Ward 2 Councilman Dwayne Davis said he was on board with moving forward in the bond process, but he wanted to make sure the funds, if approved and received, were spent on paving and infrastructure projects that benefited Meridian residents.
“I want to make sure we do exactly what we say, that we’re going to pave these roads versus doing special projects with these funds,” he said.
Additionally Davis said he wanted to encourage the council to look at the possibility of making advance payments on the bonds. The city received about $1.4 million from internet use tax but only puts about $500,000 toward the first $6 million bond, he said.
The bonds have 10-year repayment terms, Davis said, but the lifespan of pavement is about 6-8 years. Additional payments could shorten the time the city is making payments and free up funds to put toward other projects or future paving bonds.
In other business, the city council:
•accepted a $31,203 grant from the Edward Byrne Memorial Justice Assistance Program;
•approved ad valorem tax exemptions from the Mississippi Children’s Museum, Avery Products Corporation and Dominion Life;
•closed the alley South of 1st Street, North of Front Street and West of the 22nd Ave. to vehicles. The alley will be used for pedestrian traffic;
•authorized closing and vacating an abandoned alley at 2800 11th Street; and
•approved rezoning 2110 Mosby Road from multi-family to commercial.