Independence council authorizes up to $50 million borrowing, approves contracts to build three fire stations

The Independence City Council on April 7 unanimously approved an ordinance authorizing the city to borrow up to $50,000,000 from the Missouri Development Finance Board to cover project costs including three new fire stations and related work, council members said.

The loan authorization, adopted on second reading as ordinance 25-016, passed 7-0. City officials said the debt would be structured with a final maturity no later than Dec. 1, 2054 and that debt service is expected to be repaid from the city's fire safety sales tax revenue.

Jennifer Gerlock, with Project Advocates and the city's owners representative for the Justice Center and the fire station project, said bringing construction managers on during design helps control cost and schedule. "What it does is it puts the risk on the contractor," Gerlock said, describing the construction-manager-at-risk approach that will be used and explaining that the city will return later for a guaranteed maximum price amendment.

Caitlin Dwyer, the city's financial advisor with Columbia Capital Management, described the bonds' amortization and call features. "It's representative of the average time it takes to pay down principal," Dwyer said, and she said the bond issue is expected to have a final maturity around 30 years from issuance with a likely weighted-average maturity closer to about 20 years; she also said the council could opt for optional redemption roughly eight years after issuance if market conditions make refinancing advantageous.

City officials and union representatives urged support for the package during the meeting. Michael Veidt, president of IAF Local 781, described recent rescues and injuries involving Independence Fire Department crews and urged passage, saying the bond would help deliver new stations and protect personnel. Doug Blodgett, speaking on behalf of department officers, said of the police facility that officers routinely work in a building with health and safety issues and urged voters to approve related ballot measures and projects.

City staff and consultants told council members they had reviewed funding and cash flow and that the majority of the proposed borrowing would be repaid from the fire safety sales tax proceeds. Officials said they have built reserves in the fund and plan to sequence projects and use contingencies and escalation assumptions to reduce the risk of cost overruns.

The council also approved, on the same consent agenda cycle, a set of related construction and design contracts (items 4-7) for the fire stations and justice center; each of those consent items passed 7-0.

The ordinance directs city staff to finalize the bond sale and related agreements with standard municipal-market features including an optional call provision and level principal-and-interest amortization. Officials estimated an all-in interest cost in the low 5% range based on the market conditions discussed at the meeting, subject to change before sale.

Council members and staff emphasized the limits on borrowing: the city manager and finance staff said the city is authorized to borrow up to the stated amount but will not draw funds beyond what is needed, and that projects must be managed within the bond authorization and applicable legal limits.

With the ordinance adopted, staff will complete credit-rating reviews, finalize terms with the Missouri Development Finance Board and proceed toward a negotiated bond sale and subsequent guaranteed maximum price amendments with the selected construction managers at risk.