HATTIESBURG, MS (WDAM) - The Hattiesburg City Council is faced with the decision to change the Groundworx payment plan after an unsuccessful attempt to override the mayor's veto on raising sewer rates.
The cost of the plan? An additional 29 million dollars. That is the projected cost in interest the city will pay if the council decides to pay that interest on the back end of the project rather than upfront as originally planned.
"It will cost us more in the long run to do it this way," said council president Kim Bradley." We are just putting it off a little further down the road. But if that's the time the mayor feels like and other council members feel like we need to have to try to raise the dollars, to go along, we have to, we need to move this project forward."
Before the mayor vetoed the council's decision to raise sewer rates, the revenue from that increase would have gone toward immediate interest payments on the waste water construction. But the city now finds itself in a stalled period, waiting to see if a referendum will pass for a one percent sales tax increase, but still in a contract with Groundworx that it must act upon.
"What we have is a contract, and we have to act, and it's the responsibility of the city to produce a revenue stream or show it can produce a revenue stream that can repay these bonds," said Bradley. "Hopefully that sales tax option can work or will work, and of course that will defray some costs, too."
Since the city cannot provide an immediate revenue stream to defray the costs, the bonding company will have to sell the bonds on behalf of Groundworx. The original price was maxed out at 141 million dollars. Now, the bonding company is looking at selling nearly 160 million dollars in bonds. Bradley and others have already made visits with bondsmen in New York, and Bradley said he hopes the back and forth at city hall will not affect the bondsmen's decisions.
"They're watching what's going on in Hattiesburg, and they see that there is a lot of uncertainty," said Bradley. "There's some indecision, and when you have indecision, you've got to hope that won't affect your ability to borrow money or the rates that you would pay based on them being rated."
A few other options on the table for the council's move from here are the ongoing agreement with Petal that has not yet been settled and even the possibility of using rewards from the BP oil spill. Bradley said he hopes this issue will be on the council's agenda for next week's meeting.