- Real Estate
- Paris Flash
By CHARLES RICHARDS
The City of Paris is in the enviable position of undertaking a 10-year, $50 million replacement of its deteriorating underground water and sewer pipes without a significant increase in taxes, if any.
For one thing, interest rates are at a historic low.
An official with Southwest Securities, Inc., of Dallas, which advises the City of Paris on bond issues, told the Paris City Council at last week’s council meeting if the city is going to sell bonds ever, this would be the time because money has never been less expensive.”Just by comparison, years ago kind of the norm was, if you wanted to do the math in your head, you’d multiply your debt by eight and a half percent, and that’s how much you could expect your debt service to cost,” city manager John Godwin says.
On $50 million, that’s almost $4.5 million, the city manager noted.
“Now, they’re coming in here telling us it would be like $3.2 million. So that would be a huge, huge deal,” Godwin said.
Another reason the City of Paris will be able to make the huge infrastructure commitment without a significant increase in taxes, mayor AJ Hashmi says, is that in the past year, the city finished paying off three previous bond issues – freeing up $2.5 million a year that can be applied to the bond costs.
““I feel strongly that if we were to do a bond, the likelihood of having to raise taxes is slim. We are going to try our best to do it without raising taxes,” Hashmi said in a weekend interview with eParisExtra.
A bond election cannot be held until next May, but the city council isn’t putting things on hold until then.
Longview-based KSA Engineers is being awarded a contract to work up a 10-year plan for new streets, sidewalks, and drainage projects and new underground water and sewer pipes to replace lines inside the loop that were laid as long ago as 1899.
The council plans for 2013 being the first of those 10 years.
KSA has said it will commit 20 employees to the project, with a goal of completing the 10-year in six months. The company said it will begin work Nov. 26 in order to come up with the plan for Year One by the end of December, so that work can begin in January if the city desires.
The city council has already committed for 2013 infrastructure improvements the $2.5 million that had been going toward the three bond issues that just expired.
In addition, the council has indicated a willingness to pull out of city reserves an additional $2.5 million in order to make an initial $5 million investment in new infrastructure right away.
Hashmi talked to members of the Rotary Club on Friday about the council’s determination to tackle the infrastructure problem.
He said he felt that Rotarians received his message well.
“We hope to have a bond issue next May to finance the infrastructure improvements, and I feel the people will be supportive of it, in part because we are going to do our best not to raise taxes. We are in a very enviable position because we have money available that no longer has to be paid to the previous bond issues,” the mayor said.
The city manager said the city is prohibited from spending money to convince voters to vote yes on the bond issue, but is permitted “to spend money to educate folks, to let them know what the bond iss ue is for and that sort of thing, because you want to have educated voters.”
“We can’t acgtually say, ‘Go out and vote yes.’ The logis is, we believe if people understand it, they will vote for it,” Godwin said.
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