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City officials pitch ideas for cable funds
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While the $23 million Covington received for the sale of its cable system doesn't seem to be burning a whole in anyone's pocket, the mayor and several city council members have already made a few suggestions as to what to do with the money.

Paying down the city's short term debt, developing the airport and fully funding the city's pension plan top the list of suggestions for Covington Mayor Sam Ramsey who has prepared a fairly detailed plan on how to spend and invest the proceeds. Other council members have echoed several of Ramsey's suggestions and added a few of their own.

Charter Communications Inc. paid the city of Covington $27,261,925 for the sale of Covington Cable at the end of August. After expenses from the sale and the cable system's short-term debt are paid off, the city will have a net profit of $22,951,702 to spend or invest however it sees fit. That money is currently accruing interest at a 5.3 percent rate at BB&T.

 Ramsey has listed several suggestions for how the proceeds could be allocated. First, he advocates spending approximately $3.58 million to pay off the city's short-term debt on those bonds which have the highest interest rate as well as paying off the general obligation debt on a 75' Aerial Ladder Truck purchased for the Covington Fire Department in 2004.

Those bonds with the highest interest rates were taken out from 1992 to 2000 and were for the financing of several water and sewer improvement projects in the city.

According to Ramsey the interest rates on the sewer bonds are less than 4 percent while the interest rate on the fire truck bond is 3.9 percent.

Covington Council members Roger Tingler, Ocie Franklin and Janet Goodman also said they were in favor of spending some of the cable money on retiring the city's short-term debt although they did not give specific figures or specify which bonds they would like to see retired first.

"First thing I'd like to do is pay down a good bit of the debt," Tingler said.

Second, Ramsey said he would like to see the city spend $3 million from the cable sale to bring the city's pension plan to 100 percent funding levels. The pension plan is currently only at an 82 percent funding level. The city of Covington employs approximately 350 employees.

"We've been having to take money each year out of the budget (to fund the pension plan)," said Ramsey, who added that he would like to see the plan eventually sustain itself through accrued interest.

Tingler, Franklin and Goodman also said they would be in support of fully funding the city's pension plan.

"I'm sure we will take care of the retirement plan," Franklin said.

Third, Ramsey recommended spending the cable proceeds on projects that he said would bring the city long term dividends. Specifically he is in favor of spending $5 million on the Covington Municipal Airport and $5 million on the Covington downtown hotel/civic center project.

The Newton County Industrial Development Authority recently acquired 85 acres from Nisshinbo Industries (72 acres were purchased in 2002 and 13 acres were purchased in 2007).

According to Ramsey, the city is responsible for $2.8 million in IDA debt accrued from the airport land purchases. Ramsey estimated that by paying off the $2.8 million in debt now, the city will save itself over $200,000 in yearly interest costs.

Ramsey estimated that it will cost the city $2.2 million to extend water and sewer services to the 85 airport acres which would bring the Covington Cable money spent on the airport to $5 million.

"I feel like the civic center and the airport will mean a lot to the economic health of the city," Ramsey said.

Tingler and Franklin also said they would be in favor of spending some of the cable proceeds on developing the airport further. Goodman was more guarded in her comments, saying that it would depend on just what was suggested for the airport before she would approve airport funding.

Ramsey's plan would leave several million dollars to be kept by the city in a bank account where it can accrue interest.

"We can get the money any day we want it," Ramsey said. "We can write checks against it any time we want with no penalty"

Ramsey said the last thing he wanted to see was the cable money spent entirely on paying off the city's long and short-term debt.

"You've got to have enough cash to be flexible," Ramsey said.

Goodman said she would like to see some of the cable money spent on improving road infrastructure in Covington through the addition of sidewalks, curbs and gutters on streets where they are lacking. She also said she would like to see some of the money spent on a beautification project for the entrance to the city on U.S. Highway 278, near the I-20 exit 90 entranceway and exit ramps.

"If you beautify your city, it's an invitation to people to come see what we have to offer," Goodman said.

The city of Covington has already committed $980,000 to the purchase of three buildings located at Turner Lake Circle which will be run by the Covington Housing Authority and leased by Rainbow Covenant Ministries for a homeless shelter. FaithWorks and the Community Food Pantry are also considering moving into the buildings.

An official appraisal of the three buildings was completed on Monday by Eddie Phillips of Key Realty at no cost to the city. Phillips appraised the buildings at $979,800, a figure which was only $200 short of the appraisal figure previously quoted by Ramsey.

Ramsey called Phillips' free appraisal, "an outstanding act of generosity" to the city.

Covington Council members John Howard, Mike Whatley and Hawnethia Williams were also contacted for comment for this story, but they had not replied as of press time Tuesday evening.

Ramsey will officially present his suggestions to the Covington City Council at their next work session at 6 p.m. on Oct. 1 at Covington City Hall. The public is welcome to attend.