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December 29, 2012 8:55:32 PM
When City of Columbus Chief Financial Officer Mike Bernsen begins his new position with Columbus Light & Water Jan. 2, he will not only be leaving behind a job he has held since 2008, but he will also no longer be the overseer of $17,631,774 in city debt.
While the debt may seem high to the typical resident, Bernsen said the debt continues to be manageable.
"We treat our debt service like a city department," Bernsen said. "We make payments accordingly. Since I've been working with the city, we have been able to manage this debt. This debt and its payments are part of the Fiscal Year 2013 budget."
One of the bigger debts the city owes is from the general obligation bonds issued in 2010. Since 2010, the city has paid back $425,000 on $8.9 million, leaving a total of $8,475,000 to be paid by 2017.
"This is the only debt that does not come out of the general fund," Bernsen said. "It is paid by a special millage that was passed by the city to help reduce the cost of paying back the bonds."
Since September, the city has taken on an additional $7,200,000 in debt service. A joint project between the city and Columbus Light & Water for energy efficiency included a loan of $6 million from Regions Bank. But Bernsen said the debt total for the project could be misleading.
"The city will only be paying back $500,000 of this," Bernsen said. "Columbus Light & Water will be paying back $5.5 million. Columbus Light & Water can't borrow money, so the city signed for the loan. This reduces the $17,631,774 total debt as well."
The additional $1.2 million of new debt was approved by the city council Dec. 18. The money will be used to purchase new city equipment, including a boom truck and dump truck, as well as paying for the 14th Avenue drainage project. The city secured the loan from Trustmark Bank for a five-year period.
There is additional good news for the city this fiscal year as approximately $300,000 will be coming off its debt schedule.
"We have a capital improvement loan from the Mississippi Development Authority for $163,301 that will mature in August," Bernsen said. "We will also have an additional $120,893 from Regions Bank that will mature in September. This will be good news as the council prepares its FY 2014 budget."
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