Jackson council approves amendment allowing up to $40M in modernization-tax bond financing for streets and facilities

The Jackson City Council on Aug. 26 approved an amendment to a parameters resolution permitting the city to issue a promissory note and obtain up to $40 million from the Mississippi Development Bank for an infrastructure modernization tax revenue bond project. City officials said the funds are primarily intended for resurfacing and street repairs, with some allowance for drainage and building improvements.Mayor and finance team: Mayor Trey Hairston and city finance advisers said the financing was structured to secure a private placement purchaser. A financial adviser reported a term sheet from Capital One offering a rate of “4.79%,” which the city described as favorable. The adviser said the lender required a closing by Sept. 30, 2025, to lock that rate.Council context and allocation: Council members asked whether funds would be divided evenly among the seven wards. Administration officials said the intention is to direct the bulk of money to street resurfacing, with some flexibility for drainage and, per recent legislative change, certain publicly owned building projects. The resolution maintains a pro rata share by ward unless the council votes otherwise.Timing, debt service and receipts: Interim CFO Felix Malenbecker told the council the city receives about $10.6 million per year in modernization-tax receipts, paid in two tranches (January and July). City bond counsel and advisers said debt service would start in February 2029 and the financing could run for up to 15 years; exact debt-service schedules vary in early years as principal amortization changes.Plans for use and matching federal funds: Mayor and councilors discussed potential to use the bond funds as a match for approximately $75 million in resurfacing projects, including a federal grant requiring a $29 million local match. Officials said the city would seek state assistance for some matches but could use modernization-tax proceeds to meet match obligations.Commitments and next steps: Bond counsel and the administration said they will prepare closing documents and revalidate bonds through the court process. Officials asked council members to submit ward preferences for street work; advisers said they hoped to close the transaction by Sept. 30 to secure the published rate.