The City of Vicksburg recognized two longtime employees Monday at the beginning of the Board of Mayor and Aldermen meeting.

Public Works Director Garnet Van Norman and police department mechanic Perry Jones were presented with certificates for 25 and 20 years of service, respectively.

They authorized City Clerk Walter Osbourne to transfer funds from the pool cash account to the reserve fund account at BancorpSouth. The move will allow the city to get the highest interest rate possible from the money before dispersing it to pay for capitol improvement projects.

“I vote we move the money to the reserve fund account so can get the highest and best interest for the money,” Mayor George Flaggs Jr. said. “It’s for accounting purposes, so we can track all that money, and at the same time benefit from the interest.”

The money is $9.5 million from the loan the city signed with Government Consultants of Jackson, a government financing and consulting firm. The $9.5 million is the first part of an $18 million bond issue for capital improvements. The board has two years to decide whether to borrow the $8.5 million balance.

“The plan is to park that money and it is a significant amount of money to draw interest until we have to spend it,” city accountant Doug Whittington said.

North Ward Alderman Michael Mayfield asked how long it would take to transfer money out of the reserve account and into the city’s regular account to reimburse a contractor for work performed.

“Probably 45 to 60 days,” City Attorney Nancy Thomas said.

“That is a significant amount of interest,” Whittington said.

The board previously approved a provision to reimburse the city for whatever expenditures it incurred as a result of administering the projects covered under the capitol improvements loan.

“Our cash flow is such that the funds can be reimbursed upon being moved someplace else, because we can’t write checks off of the reserve account,” Whittington said. “So quarterly or 45 to 60 days with the provision that we can reimburse ourselves really takes care of it.”

The board unanimously approved the transfer of funds.

The bond payments are structured so the city will pay only interest on the loan for the first two years, with the first payment due June 2016. The city will not pay any principal in the loan until 2018, when two bond issues from 2003 and 2007 are paid off. The board refinanced the loans in 2014.

No part of the capitol improvement loans would have been approved if the city had not restored its bond rating.

The city’s A2 bond rating was pulled in 2012 by Moody’s Investment Services, a New York-based provider of credit ratings and risk analysis, which cited a lack of current information on city finances because of incomplete audits dating back to 2008. The rating was restored in July 2014.

Flaggs in December said he would seek a bond issue to finance capital improvements to upgrade city buildings, recreation facilities and resurface streets, and board issued the call for the bond issue in May.