A bank resolution to finalize the United Bank of Union financing for new HVAC equipment at East Central College was approved Monday night by the board of trustees.
ECC President Jon Bauer assured the trustees there were no changes made to the financing for the project, which was approved last month.
“With your approval we would proceed closing next week,” Bauer said.
The project, which is Phase 2 of the college’s 10-year master plan, will replace HVAC equipment that is well-beyond its useful life in the Shook Student Center, Hansen Hall and the Training Center.
The college utilized with Thompson Coburn LLP, St. Louis, to draw up the resolution.
“They’ve been in contact with us and the United Bank of Union to get the documents in place and have the formal bank resolution ready to approve tonight,” Bauer said.
Ali Rafferty, Thompson Coburn partner, said this obligation is bank qualified.
“This obligation is attractive to banks because they’re going to hold it in their portfolio and the interest that they earned off of it is exempt from federal taxation,” she explained. “It’s a good thing this is a bank-qualified obligation.”
Rafferty added that in the documents, Thompson Coburn has asked for a reasonable expectation that the district’s capacity for debt is not to exceed a $10 million mark.
“Because that would affect the bank-qualification status,” said Eric Park, trustee.
“Correct, you cannot have an expectation that you’re going to issue more than $10 million in tax-exempt debt in a calendar year,” Rafferty said.
The trustees moved to approve the resolution.
The college and United Bank of Union will enter into an equipment lease purchase agreement next week.