The city made it official Monday night when the board of aldermen unanimously approved an ordinance that allows for refunding outstanding lease obligations that will save more than $300,000 in interest in the process.

Through a separate ordinance, the board also unanimously decided to enter into a lease purchase agreement in which the proceeds will be used to fund water and sewer line work as part of the Springfield Road improvement project.

Steve Goehl of D.A. Davidson and Shannon Creighton of Gillmore & Bell made a brief presentation to the board about the ordinances and the financing before votes were taken.

Refunding COP

In June, the board unanimously voted to refinance the $1.18 million in certificates of participation paid by the half-cent transportation tax. The refinancing of the 2004 series bonds knocks the interest rate down and sets the new rate at a projected average rate of 2.169 percent, according to figures shown to the board on Monday.

Goehl said the bond refunding will produce about a 6.84 percent rate reduction to the city and said the difference between the old and new payments over the seven-year shelf life amounts to a savings of $312,296.44. 

“Over the life of the bonds, at least a 6 percent savings was required to refund,” City Administrator Rick Childers told The Missourian after the meeting. “It looks like it’s going to be more than 6 1/2 percent.”

Through the refunding, the city will be required to pay an annual principal payment between $160,000 and $180,000 through 2019 plus the interest charges.

Springfield COP

The additional 10-year certificate of participation will generate not more than $660,000 to fund water and sewer replacement lines for the Springfield Road project.

That project has started and will resurface the west side of Springfield Road to the city limits, complete with a new sidewalk and relined sewer and new water lines, and resurface the east side of Springfield Road from Highway 30 to South Main Street with rebuilt sidewalks and the relined sewer and new water lines

The interest rate on the separate COP is about 2.76 percent. The city will pay an annual payment of $73,621.07 for 10 years.

“This is essentially a 10-year note,” Childers said when the matter first was discussed earlier this summer. “We should be able to do this without having to cut into our reserves. We feel this should be within our (financial) means.”

City officials opted to carry the note in order to generate the higher-than-expected monies needed for the water and sewer portion of the road project.

Mayor Ron Blum said the city originally estimated about $300,000 in costs to replace the water and sewer lines, but bids came in at a much higher amount.

“We still feel it’s necessary to replace and improve those lines,” he said. “We feel this is the right approach to take with this project.”


The aldermen also passed a resolution approving a tax-exempt financing compliance procedure for the city.

 Childers said the resolution was recommended by the Internal Revenue Service and adopts written procedures for monitoring post-issuance federal tax requirements for tax-exempt bonds.