The Columbus City Council voted in a special meeting Wednesday to use $3.8 million from the Mississippi Development Bank solely for paving, sidewalks and curbs.
The funds, which also could have been used to improve city buildings, were slated for both capital and infrastructure improvements in the 2010-11 budget.
The council initially approved the funds for both because of a miscommunication, council members said in the meeting.
The unanimous vote frees up $35,000 in the budget for use elsewhere.
The council also authorized investment firm Morgan Keegan to look at refinancing existing debt to improve cash flow.
The firm will combine the $3.8 million for infrastructure with a $1.8 million bond issue and a $3.2 million debt issue, creating one bond issue of $8.8 million.
The financial restructuring, similar to refinancing the mortgage of a house, will cut legal and other fees and could free up $500,000 in 2011 debt payments, which will be pushed back to later years.