The city of Vicksburg will save about $580,000 by refinancing a 2018 bond issue, Mayor George Flaggs Jr. said Tuesday.

The Board of Mayor and Aldermen Monday approved refinancing an existing $9.6 million bond that was used for paving, demolishing the Kemp Bottom Road bridge and utilities relocation on South Frontage Road as part of the state’s South Frontage Road extension project.

The money was the second draw of a more than $18 million, 20-year capital improvement bond approved by the board in 2015. The present interest rate on the bond is 3 percent and was scheduled to increase to 5 percent by 2024.

The interest rate to refinance the remaining $8.86 million is 2.17 percent. According to city officials, the savings per year over the 17-year term of the loan ranges from $32,377.39 to $37,246.26 for an average annual savings of $34,774.63. The bond will be paid off in 2038.

Flaggs said those savings the city gets will go into a special account along with other unbudgeted revenue such as a possible settlement from an opioid lawsuit.

“I have every intention to put all the money we are able to bring in outside the budget recommendations in a separate category,” he said. “I don’t intend to double spend.”

Any money the city gets outside of the infrastructure bill or a federal grant will be put in a different category, Flaggs said. It will not be included in the general fund.

“One of the problems we’ve had, we’ve lumped all of the money together and you can’t be accountable. The money needs to be separated so we know what we’re spending it for. I want to start line-item appropriations,” he said. “If you spend money that’s not in your budget then you have to find it from some other means.

“If not, we’re spending in the blind and that’s got to stop.”