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Neosho staff proposes $15M construction note to bridge public safety center funding gap
Summary
City staff recommended pursuing a short‑term construction loan—roughly $15 million with a hypothetical 3.75% interest rate and ~1.25% issuance costs—to bridge timing between sale proceeds and contractor payments for a new public safety center; council signaled support to move forward with underwriting.
City staff told the Neosho City Council they are preparing to pursue short‑term financing to bridge a timing gap for the public safety center project.
The staff presentation, which referenced work with underwriter Piper Sandler and bond counsel Gilmore Bell, described a construction note in the neighborhood of $15,000,000 with a proposed 36‑month term. Staff estimated a hypothetical interest rate of about 3.75% and issuance costs around 1.25% of par (roughly $188,000), noting those figures are preliminary and subject to market bids.
"What they are proposing... is to do a construction loan... we're currently kinda talking about... 3.75," said a staff member (speaker 9) during the briefing. Staff said the plan would allow the city to pay construction draw requests while sale proceeds are finalized; the city could retire the note with sale proceeds or later refinance through longer‑term bonds if needed.
Council members pressed on timing and alternatives. Staff said bid schedules intend to go out at the end of June and recommended having funds available about two months before draws are needed. Council members broadly expressed support for moving forward with Piper Sandler to develop documents and solicit lenders so the city will have options when contractors require payment.
The council did not vote to obligate funds at the meeting but instructed staff to proceed with underwriting discussions and return with financing documents and recommended resolutions for formal approval.
