A Jackson legislator said the city got a raw deal out of the State Bond Commission's recent decision to not allocate $6 million in interest-free bonds to repair the city's aging water system.
"(The Commission) need(s) to rethink what they did and try to help the city of Jackson get its water system working," Rep. Credell Calhoun, D-Jackson, said.
State Treasurer Tate Reeves attributed the commission's decision to the state's continuing effort to reduce its debt.
"It is pretty standard procedure for any entity getting new bond money to sit down at least with me and my office so we can understand what the use of the proceeds are going to be, what they're going to spend the money on," Reeves told the Jackson Free Press today. "And we get very specific. In the first four years the governor and I were in office, we had less debt on the books at the end of that four-year period than we had in the beginning, and we completely curbed the growth of our debt burden. We didn't do that by running around, chasing people and begging them to take money."
Jackson Mayor Harvey Johnson Jr. announced yesterday that the city had already budgeted for $6 million in interest-free bonds from the state to finance much needed water and sewer repairs around the city, including Capitol Street, and would likely have to re-configure the budget to reflect new interest rates to get an alternative loan. The re-appropriation could force the city to raise water and sewer rates.
"No one from the bond commission's office has made any contact with the city at all, "Johnson said. "I'm sorry the severity of the water system issue that the capital city faces is not apparently recognized by the bond commission. We were counting on these dollars. We are in the middle of the budgeting process and had included them in the upcoming fiscal year's budget. And this is truly a great setback for the citizens of Jackson."
State Department of Finance and Administration spokeswoman Kym Wiggins--who did not immediately return calls to the Jackson Free Press--told the Clarion-Ledger that Department of Finance employees abandoned the $6 million bond because the city "had other options" for financing water improvements, including loans from the Mississippi State Department of Health or the Department of Environmental Quality.
Interim City Administrator Rick Hill said, however, that those departments cannot authorize loans for the entirety of the city's water repair needs. He warned that the city would most likely have to carry its loan to the bond market, which could demand between a 3 or 5 percent interest.
House Appropriations Committee Chairman Percy Watson, D-Hattiesburg, said the House and the Senate approved the $6 million bond proposal for the city, and that the refusal of the bond commission to take up the bond may have been a private decision behind closed doors.
"Apparently a considerable amount of lobbying had to be done after the bond left the legislature. What happened here is not too unusual. I've had bonds pass the Legislature and take six years to get to the hands of the people to whom it was directed," Watson said, adding that "somebody" involved with the bond commission decided that "(they) just won't sell the bond."
Reeves said he could not say if the policy of pushing bond beneficiaries to interact with the bond commission prior to votes was exclusive to his administration.
"I don't know what they did prior to my seven years in office, but this is the way we do it now," Reeves said. "There are several hundred (bond) projects that are outstanding. The entities have to convince two of the three commission members that it makes sense from the state taxpayers' standpoint that the long-term benefits outweigh the costs," Reeves said, adding that the city's request never made it to commission members during their July 12 vote.
Johnson, however, said he did not recall having to lobby the bond commission to endorse a Legislature-approved bond in any of his prior administrations.
"We've had bond issues before. Farish Street was about a $6 million bond from early in my first administration, which the bond commission approved. The only difference was the make-up of the bond commission," Johnson said.
Reeves said he did not agree with the term "lobby," but assured that this setback did not amount to an outright refusal.
"These bonds have a four-year window. It's not accurate to say the commission voted them down. They have not been approved, yet, but that doesn't mean it is over. ... I couldn't tell you today what the $6 million is going to be spent on. I do look forward to meeting the city officials to better understand exactly what they plan to do with the money in the event that commission gives it to them."
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