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Consultants advise cautious financing for $9.5 million park project; bids due Sept. 1
Summary
Consultants told the Byram City board the special 2% sales tax has averaged about $83,000 per month (about $996,000/year), and recommended planning shorter-term financing with cash reserves rather than borrowing the full $9.5 million to preserve operating funds.
Consultants reviewing the proposed park project told the Byram City board that special-sales-tax collections have averaged “right around 83,000 a month,” which annualizes to roughly $996,000 — a figure that will shape how much the city can safely pledge to debt service.
The presenter outlined coverage calculations and financing options, noting two discount/coverage scenarios (a 1.20 and a 1.10 coverage assumption) and suggested matching financing length to asset useful life rather than extending debt beyond what assets will justify. The consultant said the city’s published not-to-exceed borrowing amount is $9,500,000 but warned that committing all projected tax receipts to debt would leave little room for routine operations and maintenance.
Board members and staff discussed whether to use roughly $2,000,000 in park-and-rec cash as a partial down payment to reduce principal and improve cash flow. One alderman asked whether a 12-year term could strike an appropriate balance between debt costs and returning funds to the city sooner; the presenter favored a shorter term where feasible to accelerate the city’s ability to fund future projects.
The project is out for pre-bid review this week and bids are scheduled to open Sept. 1, with the board planning a post-bid discussion at its Sept. 10 meeting to evaluate numbers and recommend next steps.
