UPDATE: The Covington Board of Commissioners unanimously voted to extend the debt for the site at their meeting on Tuesday, Nov. 18, 2025.–LINK nky editorial, Nov. 18, 2025.
The Covington Board of Commissioners will vote in November to extend the payment schedule for the debt it incurred in 2020 to buy the land of the former IRS site.
The debt for the site, currently part of the Covington Central Riverfront development, takes the form of up to $29.4 million in general obligation bonds, with an original maturity date of Jan. 1 of next year. The city may issue less than that amount as circumstances dictate.
Given the impending maturity date, which would mark the date when the city would need to begin making payments, the city felt it was necessary to extend the payment schedule to avoid burdens on the city’s already struggling finances, said Covington Finance Director Bre Gaffney.
General obligation bonds are one of several debt measures cities use to pay for capital projects. The city had used such bonds to bankroll the construction of its new city hall building.
General obligation bonds, unlike other municipal debt instruments like industrial revenue bonds, are backed by the city itself. The city solicits investors to buy bonds, in this case up to $29.4 million worth, which will provide the city with cash to finance the building’s construction.
The city is then fully on the hook to pay back the principal of that debt plus any interest. In a scenario where the project fails to generate revenue for the repayments, the city would have to make up the money in some other way. In some cases, this could entail raising taxes.
The original interest rate of the debt was 2.040% per year. The extension will not have an interest rate until the city actually goes through the process of issuing the bonds; next month’s vote will essentially permit the elected officials to instruct the city’s professional staff to begin the process. The new maturity date for the extended debt is June 1, 2031, according to city documents.
The Covington Board of Commissioners performed a first reading of the extension on Tuesday. They will cast a final vote on the extension at their legislative meeting on Nov. 18. The board will not meet on Nov. 11 due to it coinciding with Veterans’ Day.
You can read the full contract and other documentation presented to the Board of Commissioners below.
