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Hampton approves $3 million debt payment
by Noreen Cochran
July 11, 2013 09:46 AM | 1148 views | 0 0 comments | 23 23 recommendations | email to a friend | print
The Hampton City Council in 4-0 decisions last week moved about $3 million from a low interest bearing money market account to pay down debt on capital projects.

City Councilman Marty Meeks acknowledged the rapid-fire votes on three different payments seemed like a spending spree.

“It is an awful lot of money and we as a council made the decision to put the money to good use. We’re not cleaning out the bank. We do still have money in the general fund. We do still have a savings account, a healthy savings account. Please don’t think we’re just spending everything we can,” he said. “Please don’t be afraid that we’re blowing everything.”

The payments were $1.5 million toward a Georgia Environmental Funding Agency loan for the city’s wastewater treatment plant, $900,000 on the Thompson Creek sewer line replacement project and $617,000 for the capital improvements fund.

City Manager Andy Pippin said the transfer of funds earning 0.4 percent to pay off a debt accruing 3 percent will save the city $400,000 in interest.

Mayor Chris Moore compared the transactions to consumer credit management techniques.

“If you have $100 on a credit card, it makes sense to pay that off because interest will eat you alive,” he said.

Pippin said the funds were “sitting idle” and will be used to fund the same kind of bricks-and-mortar projects covered under a proposed extension to the special purpose local option sales tax, up for a referendum in November.

“We are moving money out of an investment account earning very little interest to our capital improvements fund to purchase some equipment to do some projects around town,” he said. “If SPLOST IV passes we’ll pay ourselves back.”

Pippin said the city still has a healthy reserve fund of “three months of our operating budget” in the bank.

“We will still have that and still be very comfortable with a flat-out, undedicated account. This isn’t our operating fund. This is just money that’s sitting, not doing anything. If it was earning 4 percent I’d say start spending the interest, but it’s not doing that. It’s earning less than half a percent interest,” he said.

The city council also unanimously approved a tentative SPLOST IV project list.

“It’s a starting point,” Pippin said. “It’s not set in stone. It’ll be a working list.”

The list contains $7.7 million in wish-list projects but will be whittled down to $6.3 million, Pippin said.

The city council will discuss refining the list at a July 23 meeting.

It includes $2 million in road projects, $600,000 for parks and an unspecified amount for a senior center.
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