Coffeyville authorizes bond offering up to $23 million to finance transformers for major industrial customer

The Coffeyville City Commission on July 8 authorized city finance staff to proceed with a municipal bond offering to finance two new transformers to serve a local industrial customer.

Director of Finance Martin Cummings told commissioners the authorization would allow the city nd its advisers, Baker Tilly and bond counsel Gilmore & Bell—ither to offer for sale a taxable general-obligation bond series up to $23,000,000 or to issue a smaller amount depending on final negotiations. "We're not anticipating the need to go up to $23,000,000," Cummings said, adding that the exhibit presented to the commission shows a current proposed amount of about $18,200,000.

Cummings and other staff said the financing supports a local fertilizer plant that the city described as its most significant wholesale-power purchaser. City staff said the city will own the equipment after purchase, and the industrial purchaser will reimburse the city for bond payments under a separate agreement that remained under negotiation.

Why it matters: staff described the transformers as necessary to maintain safe operations and redundancy for serving a major customer whose loads have increased. Financing the transformers through a municipal bond issuance places the borrowing in the city's name; staff said the reimbursement agreement from the industrial purchaser will cover the annual debt service.

Questions from commissioners focused on mechanics and details. Cummings said municipal bond offerings are sold in series with varying interest rates and that specific yield outcomes are determined as part of the bidding process. "We are asking for the authority to go up to $23,000,000," he said, noting the city expects a lower amount in current plans. He added staff will provide more details on interest-rate expectations and the bid process as the sale proceeds.

The commission voted 5–0 to approve Resolution R-25-77 authorizing the offering. Commissioners who spoke on the record included Commissioner Hendricks, who made the motion, and Vice Mayor Van Oster, who seconded it.

Next steps: finance staff will work with Baker Tilly and Gilmore & Bell to publish a notice of sale, solicit bids and report results to the commission. The final bond size and interest rates will be decided through that sale process, and staff said the repayment arrangement with the industrial purchaser will be finalized in parallel.