Jackson Free Press

Read Barbour's letter to Johnson
Read Johnson's response
JFP Editorial: State Officials: Respect Jackson

The Mississippi Legislature singled out Jackson as the only municipality that needed to submit an application to and lobby the state Bond Commission in order to receive a loan that the lawmakers had promised the city.

Mississippi Department of Finance and Administration spokeswoman Kym Wiggins told the Jackson Free Press that the city did not complete an application for a $6 million water and sewer infrastructure bond that the Legislature approved during the last session. "At the time of the July 12 (Bond) Commission meeting, there was no grant application on file for the City of Jackson," Wiggins said.

Wiggins also confirmed that the Legislature took the unusual step of adding the application component, which she called "exclusive" to Jackson. A review of the 2010 bond legislation, H.B. 1701, reveals that while the legislation stipulates that businesses seeking loans from the Mississippi Development Bank must submit applications to the commission, it demands no application requirement from other municipalities and projects.

Mayor Harvey Johnson Jr. was shocked to learn about the new requirement last month, saying: "No one from the bond commission's office has made any contact with the city at all. 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."

The requirement for Jackson to lobby the Mississippi Development Authority is in the legislation listing all approved bonds, however, in Section 44 on page 213. "The city of Jackson must submit an application to the MDA. The application must include a description of the purpose for which assistance is requested, the amount of assistance requested and any other information required by the MDA," the legislation states. It also specified that the bond money must go to city projects near state-owned or operated buildings or roads.

No one from the state reached out to the city to inform them that the city was subject to a special application requirement, Johnson said: "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."

As a result of the confusion, the State Bond Commission did not address the interest-free $6 million loan the state Legislature approved during the regular legislative session. The unexpected absence of the money prompted Johnson to ask the Commission to consider the bond. Wiggins said the vote could not go forward with bond stipulations unfilled.

"It would have been inappropriate for the MDA because the legislation required they give an amount and a specific project, and that project had to be in accord with the way the statute is written with projects located in and around state buildings," Wiggins said.

City spokesman Chris Mims confirmed that the city had failed to submit an application to the MDA prior to the July 12 Bond Commission vote, but said the city has since submitted a request for application information. "We have sent a letter to MDA requesting the funds and whatever process we have to go through," Mims said. "We have asked them to let us know what they need."

When asked for a copy of the application the city should complete, Wiggins said she was unfamiliar with a template for such an application and referred questions to the MDA, which did not immediately return calls.

Rep. Cecil Brown, D-Jackson, said he had never encountered such a requirement during his legislative career, and took issue with an Aug. 11 statement State Treasurer Tate Reeves made to The Clarion-Ledger. Reeves told the Ledger that the city must defend the bond request before the commission. In a letter sent to the Ledger, Reeves demanded answers to questions including: "How (does the city) plan to fund the other improvements that have largely been ignored for many years?" and "Is federal money available to help fund some of these enhancements?" and "If so, has the city been diligent in ensuring that all federal sources were applied for and deadlines were met?" among a host of other requests.

Reeves told the Jackson Free Press that the commission's July 12 decision not to consider the $6 million interest-free bond proposal is testament to the state's continuing effort to reduce its debt, and described the process of bond beneficiaries sitting down with Reeves and his office prior to the bond vote as "pretty standard procedure," under his administration.

"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," Reeves said, adding: ""I don't know what they did prior to my seven years in office, but this is the way we do it now."

Brown said Reeves implies through these remarks that he has veto authority over the project by not including it in the agenda. "He's saying they have the authority to decide whether or not it's a worthy project. I don't think they've got that authority, or should have it," Brown said. "'... He can ask for any information he wants, but he cannot make a decision that the project should not be funded, which seems to be what he is talking about."

Brown added: "The bill is very specific about the steps that MDA must go through, and also very clear that MDA is the authority, not Tate Reeves, not the Bond Commission. So Tate Reeves speaking on behalf saying he wasn't given the information--there's nothing in this bill that gives him the authority to even ask for the information."

Reeves said the bonds have a four-year window, and that the commission could still decide the issue since it had not yet voted down the project. "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," he said.

Mississippi Attorney General Jim Hood said in an Aug. 13 statement that he is requesting fellow bond commissioners Gov. Haley Barbour and Reeves to set a special session on the matter and include the bonds on their September bond meeting agenda: "The Executive Branch cannot ignore the laws passed by the Legislature," Hood said in a statement. "However, the statute also requires the city of Jackson to submit an application to MDA for such loans, which they have not done. Until the city of Jackson applies for the funds, and MDA approves the application, the Bond Commission cannot act."

In the meantime, the city may have to re-configure its budget to reflect new interest rates that would not have been included in the state loan. The re-appropriation could force the city to raise water and sewer rates.

Malachi Group Inc. President and CEO Porter Bingham, who is a contracted financial adviser for the city, estimated the new interest rate to be 3.4 percent, which amounts to an annual $204,000 in added fees.

In an Aug. 16 letter to Johnson (PDF), Barbour wrote "in response to the City of Jackson's recent request for the amount of $6 million in general state taxpayer bonds to be issued for the North Congress Street project, a superior alternative method of funding would provide a more flexible, more cost effective solution to the City's water and sewer system problems."

Barbour suggested that the city take advantage of the State's Revolving Fund loan program for the project. Yesterday, in a letter to Barbour, Johnson said the city has already borrowed $14 million from SRF in the past and would continue to seek alternative funding solutions, but would also continue to seek the $6 million interest-free loan.

"The Legislature 's intention in establishing this no interest loan was to immediately fund improvement around the Capitol Complex, in order to minimize the level of disruption of state government that was experienced in January of this year," Johnson wrote. "... Clearly the Legislature recognized the vital importance of this measure, and for this reason, I ask that you promptly implement HB 1701, both in letter and in spirit, by timely issuing the bonds."

Also see:
Read Barbour's letter to Johnson
Read Johnson's response
JFP Editorial: State Officials: Respect Jackson

Previous Commentsshow

If the state's elected officials who are being recalcitrant about cooperating to solve this problem (however it happened) were my children--and they are darn sure acting like children--I'd send them to their room without supper and tell them that if they ever wanted to go outside and play with their friends, they'd better straighten their backsides up. That acting like a horse's petoot was not attractive in my house. I hope when we go to the polls we make that point as an electorate. Jackie Warren Tatum Oh, and P.S., I assume they do flush commodes in the govt bldgs where these "kids" work.

J.T.

Aug 18 2010

What's remarkable about Barbour's letter to Johnson is how condescending it is--and how it indicates that he isn't as concerned about the economic development along Capitol Street as he could be. Good response from the mayor.

DonnaLadd

Aug 18 2010

Oh, and cheers to Adam for ferreting out more of the real story beyond partisan politics. It seems he's the only one asking some very relevant questions like: "Are you applying the same rules to other municipalities?" And, "Does Tate Reeves have the authority to do what he is doing?" Also, Barbour's letter indicates that *he* wants to supercede the legislative approval of the bonds, regardless of the special application process being selectively applied to Jackson. I wonder what Rep. Brown and other legislators are going to say about that. All of this is remarkably partisan and juvenile. No wonder our state is such a mess.

DonnaLadd

Aug 18 2010

Just looked at Downtown Jackson Partner's blog for the first time in a while (often too many anti-Obama posts for a Jackson eco-devo site, and exclamation points, there to bear). Here's a question relative to the above story. Why, in this reposting of Jim Hood's letter about the water bond controversy, did Allen bold just the part about the city not filing the application? Why not also emphasize the part above it about the Executive Branch not ignoring laws passed by the Legislature? Are his Republican politics superceding his role as a head cheerleader for downtown? This street goes two directions (pardon the pun), as Adam spells out in the story above.

DonnaLadd

Aug 18 2010

Just out of curiousity, why do some of you think Barbour told Johnson to take the loan out with DEQ? I would like to hear some opinions in regards to Barbour suggestion to Johnson?

Duan C.

Aug 18 2010

I think this letter was a hastily prepared defense for declining the city's request. They just threw in the other funding options just to make it look good... I don't think there's anything else to it. "We ain't giving you no money, & we don't have a good reason for not giving you any money, but by the way, call these other people" Vague, deceptive, ambiguous, say alot but make sure it means nothing, those are skills that you need to write a good official letter like this...

lanier77

Aug 20 2010