By Robbie Ward
TUPELO – Mayor Jason Shelton officially unveiled plans Tuesday to use $5.1 million in city reserves to pay off existing debt and add funding to the city’s multi-year capital projects fund.
Shelton officially shared with the City Council during a work session his plan to take money currently used for paying off debt and instead help pay for long-term city projects like a spray parks at two city parks and long-needed drainage improvements.
Under Shelton’s plan, the city’s reserves will shrink from $18.5 million to $13.5 million but free up about 2.5 mills each year beginning in the 2015 fiscal year for capital projects.
Annual tax dollars freed up by paying off debt will range from $431,500 in 2015 to $1.1 million in both 2017 and 2018.
Shelton first shared this general plan three months ago with the Daily Journal but presented a detailed version officially to the council.
“This allows us to have a capital project plan without raising taxes or have to issue new debt,” Shelton said after meeting with City Council members.
Shelton’s plan to pay off debt from city reserves to free up more money annually for big-ticket projects differs from his predecessor.
Former Mayor Jack Reed Jr. supported issuing bonds to pay off long-term projects.
From fiscal years 2011 to 2013, the city spent $21.1 million in capital projects that include the $12.3 million aquatic center that opened in December. The bulk of the expenses were paid through issuing bonds.
Shelton’s approach limits the city from borrowing more money to pay for projects expected to last 10 years or longer. However, using bonds to finance long-term projects allows all taxpayers who benefit through the years of capital projects to pay for them since repayment of mostly low-interest bonds occurs during a longer period of time.
Items added to Shelton’s proposed capital projects plan include funding spray parks at City Park on Joyner Avenue and at Theron Nichols Park. The most expensive project added is Kings Creek Drainage project, estimated to cost the city $550,000. Overall, the drainage work will likely cost $1.6 million with the remaining costs paid from federal tax dollars.
Shelton said the federal support is “leftover stimulus money” and must be used by the city in the next couple of months or it risks losing the federal funding.
Other projects include $100,000 and $150,000 respectively for walking paths at the Elvis Presley birthplace and the miniature Vietnam War Memorial Wall and F-105 aircraft planned at Veteran’s Memorial Park.
As City Council members learned of Shelton’s plan, some questioned specifics, such as the year planned for particular projects and items already listed as capital expenditures.
Along with the capital project plan, Shelton told the council members he will meet with them in coming weeks to gather support for a seven-year plan to lower the city’s overall personnel costs and use savings to fund pay raises.
He plans to ask the council to increase salaries of City Clerk Kim Hanna and Personnel Director Cassandra Moore, the only women and lowest paid among city department heads.