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Independence, MO —
The first step in multimillion-dollar improvements to Independence’s sanitary sewer system got under way Monday.
The City Council approved an emergency ordinance for the borrowing of $37,035,000 to finance a series of projects, with the debt issues ranging from 2 percent to 5 percent. Jim Harlow, the city’s director of finance and administration, called Monday “a very good day to be in the market.”
“While interest rates are uncertain at this time and change significantly from day to day, I believe the city can be pleased with the rates we received on this issue,” Harlow wrote in a memorandum. “For this issue, the city was very fortunate in that there were few other issues being priced, and we therefore received very good interest rates.”
Compared to the debt issued for Independence Power & Light this spring, Harlow said, the city saved about half of a percentage point in interest on the $37 million in obligations.
Facing environmental regulations from the federal government, the city is required to make certain improvements, City Manager Robert Heacock said, many of which are represented in projects for the first round of financing.
“Not unlike Kansas City and other jurisdictions, we have to make these improvements,” Heacock said. “In our rate structure that council has adopted, folks will see that there is a separate charge from the usage charge that talks about the regulatory fee that is precisely to provide the revenue stream for the debt that we have to incur to make those improvements.”
But the city will need to take on an additional $50 million in debt for sanitary sewer improvements throughout the next several years. The current loan is expected to take 30 years to pay off.
“We don’t want to issue any more money than we are going to use in the next 12 to 18 months ... in essence, even though we have fantastic interest rates here, we don’t want to be paying additional interest on $50 million if we’re not going to be using it,” Harlow said of borrowing more money at a later date.
John Powell, the city’s director of public works, said the first improvements – scheduled for the Rock Creek Wastewater Treatment Plant – are ready to go now. Built in the 1970s, the plant would receive improvements to its controls, as well as storage capacity built into the system for wet-weather flows “that we, historically, have not been able to treat in the past,” Powell said.
The first step in multimillion-dollar improvements to Independence’s sanitary sewer system got under way Monday.
The City Council approved an emergency ordinance for the borrowing of $37,035,000 to finance a series of projects, with the debt issues ranging from 2 percent to 5 percent. Jim Harlow, the city’s director of finance and administration, called Monday “a very good day to be in the market.”
“While interest rates are uncertain at this time and change significantly from day to day, I believe the city can be pleased with the rates we received on this issue,” Harlow wrote in a memorandum. “For this issue, the city was very fortunate in that there were few other issues being priced, and we therefore received very good interest rates.”
Compared to the debt issued for Independence Power & Light this spring, Harlow said, the city saved about half of a percentage point in interest on the $37 million in obligations.
Facing environmental regulations from the federal government, the city is required to make certain improvements, City Manager Robert Heacock said, many of which are represented in projects for the first round of financing.
“Not unlike Kansas City and other jurisdictions, we have to make these improvements,” Heacock said. “In our rate structure that council has adopted, folks will see that there is a separate charge from the usage charge that talks about the regulatory fee that is precisely to provide the revenue stream for the debt that we have to incur to make those improvements.”
But the city will need to take on an additional $50 million in debt for sanitary sewer improvements throughout the next several years. The current loan is expected to take 30 years to pay off.
“We don’t want to issue any more money than we are going to use in the next 12 to 18 months ... in essence, even though we have fantastic interest rates here, we don’t want to be paying additional interest on $50 million if we’re not going to be using it,” Harlow said of borrowing more money at a later date.
John Powell, the city’s director of public works, said the first improvements – scheduled for the Rock Creek Wastewater Treatment Plant – are ready to go now. Built in the 1970s, the plant would receive improvements to its controls, as well as storage capacity built into the system for wet-weather flows “that we, historically, have not been able to treat in the past,” Powell said.
