The $3.9 million bond resolution passed the City Council in a 5-2 vote. The money should be available before the new year.
Dissenting were Ward 3 Councilman Jim Newell and Ward 6 Councilman Mike Bryan, who had said Monday the city was moving too fast.
Typically, the council wouldn’t have voted on the issue until mid-November. But leaders fast-tracked the bond, which first was proposed at an Oct. 25 work session, because they want it processed by year end to take advantage of lower rates.
The bond is the first in a series of anticipated borrowings to fund a $32 million, five-year capital projects plan approved in September. It includes items like an aquatic center, fire trucks, park and neighborhood improvements, and vehicle and equipment purchases.
But the plan hasn’t been without controversy. Some council members have argued against any borrowing until the economy improves. They also questioned the necessity of some of the capital projects, saying Tupelo needs a new police station before a new aquatic center.
Coincidentally, the previous bond issue passed in 2007 had funding set aside for a new police station. But the project repeatedly has stalled due to location issues. The $9.5 million bond also built Tupelo’s baseball complex and Fire Station No. 4.
Chief Financial Officer Lynn Norris defended bonds as responsibly distributing costs across several generations of residents.
“It’s necessary for government – cities and counties and states – to borrow money for infrastructure improvements,” Norris said, “otherwise you’re going to be taxing people and holding their money for a long time until you get enough for a capital project.”
By that time, the residents who bore the burden of funding a project might have left the city before its implementation. With bonds, Norris said, projects come to fruition quickly, and the people who enjoy them pay for them over the life of the reimbursement.
It can take decades to repay a bond debt, depending on annual payments and refinancing.
Of Tupelo’s current 32.47 mill tax levy, 5.25 mills are set aside for bond and interest payments. Norris said the city easily can afford another bond within the current repayment structure.