Aldermen prepare for budget workshop, discuss TIF bonds
The Poplarville Board of Aldermen will need to cut $184,000 from the city’s proposed budget for the next fiscal year.
The Board set a budget workshop for Thursday at 5 p.m. to go through the budget for the upcoming fiscal year. At $4.8 million, the proposed budget is $184,210 over the projected revenue for the 2020 to 2021 fiscal year.
The police department accounts for the largest portion of projected expenditures from the general fund at $962,113. The proposed budget includes a $203,281 increase in funding for the police department.
The Board is also considering issuing Tax Increment Financing (TIF) Bonds for the College Square Shopping Center. The bonds would pay the shopping center’s developer for some of the costs incurred during the center’s construction. TIF bonds are meant to provide economic incentive for infrastructure development. The Board took the matter under advisement at their regular meeting Tuesday.
In 2017, the Board approved a TIF plan for the shopping center and entered an interlocal agreement with the Pearl River County Board of Supervisors to develop a TIF district in the city.
Issuing the bonds would add an additional annual $78,352 loan payment to the city’s expenses for the next 10 to 15 years. The Board is considering a 10 year TIF Bond Issue with a principal of $590,589 and a 5.5 percent interest rate or a 15 year TIF Bond Issue with a principal of $760,975 and a 6 percent interest rate.
City Clerk Jane O’Neal advised the Board against issuing any TIF bonds.
“For the long term stability of the city’s finances, I have to recommend against it,” said O’Neal.
Board members Tony Smith and Shirley Wiltshire both said they understood that the city had a legal obligation to issue the TIF bonds. Mayor Rossie Creel told the Item that he needs to clarify with the bond attorney if the city is legally obligated to issue TIF bonds since the Board of Aldermen and Board of Supervisors approved the matter back in 2017.
Creel told the Board that he disagreed with O’Neal’s recommendation. Creel said he feels that regardless of legal obligation the city has an obligation to issue the bonds, because the developer decided to build the shopping center with the expectation that the TIF Bonds would be issued.
“I think we’re obligated to that, even if not required by law, because that’s the word that we gave,” said Creel.
The city is already obligated to pay $122,248 in 2021 in debt services for the $1.4 million general obligation bond that paid for paving and street repairs, said O’Neal. The general obligation bond is being funded by the city’s gas severance tax and the city will be making payments on it for the next 12 years, she said.
O’Neal said that if the Board issues TIF Bonds it will be earmarking $200,000 annually from its general fund to debt services to pay for the two bonds for at least the next 10 years.
Creel said the revenue the city would be putting toward paying for TIF bonds would be revenue generated by the shopping center. The city pledged 50 percent of new sales tax generated by the shopping center and all of the ad valorem tax generated by the property towards paying the bond if one is issued, said Creel.
O’Neal speculates that if the sales tax and ad valorem revenue combined was not enough to pay the annual debt or if the developer defaulted, the Board would still be liable for the debt.
The Board entered executive session to discuss fire department personnel matters. After executive session the Board approved hiring Jason Mitchell as a firefighter.
In other business the Board:
—Approved appointing Captain Kimble Farmer as Deputy Municipal Court Clerk. Board member Kevin Tillman voted against the appointment.
—Approved Police Chief Danny Collier signing a Mississippi Justice Information Center Holder of the Record Agreement with the Pearl River County Dispatch for NCIC. The agreement should already have been in place, said Collier.
Wednesday morning, concrete for a sidewalk near Roseland Park Elementary was poured in an effort to repair the aging walkway.... read more