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Monett council approves 15-year lease-purchase to finance new electric substation (Bill 9172)
Summary
Council approved first and second readings of Bill 9172 to enter a lease-purchase with Central Bank of the Midwest (recommended 15-year term; 4.97% fixed for five years, then resets to 5-year treasury + 0.75) to finance the new electric substation and preserve city reserves as construction proceeds.
City staff presented financing options for the proposed electric substation and recommended a 15-year lease-purchase arrangement through the Missouri Public Utility Alliance, with Central Bank of the Midwest’s 15-year variable that is fixed at 4.97% for the first five years and thereafter resets to the five-year treasury rate plus 0.75 percentage points.
Staff said they requested both 15-year and 20-year proposals and selected the 15-year structure based on projected upcoming changes in debt load and confidence in the schedule as winter-storm loan obligations come off the city’s books. Council noted the transaction is time-sensitive because the city is closing on the loan in the coming weeks.
Council approved the ordinance on a double-reading; staff will finalize closing details. Related budget adjustments (Resolution 9176) were discussed in the meeting packet to cover substation purchases and preparatory expenses.
The council directed staff to proceed with the lease-purchase authorization and to return any corrected or finalized closing documents for administrative execution.
