City of Trenton to save over $650,000 by refinancing long term debt

Trenton, Missouri

The city of Trenton and its municipal utility expect to save money on interest costs with the re-financing of three long-term debts. It was announced the savings amounts to $658,000 over the length of the loans.

Two involve 2012 issued bonds and the 2014 issued bonds for Trenton Municipal Utilities projects done at the water plant and the sewer plant, respectively. The other is the 2018 issued bonds used to pay the city’s share for the ongoing 17th Street Bridge replacement project.

The notes, in more legal terms, are referred to as “certificates of participation.” An ordinance involving the refunding series 2021 certificates was unanimously approved last night by the eight-member city council.

Speaking to the council were Charlie Zitnik of the financial firm DA Davidson and Sarah Smith from the law firm of Gilmore and Bell. Interest rates are lower than they were several years ago, making it attractive for Trenton to refinance debt. The 2012 bonds, which once had an interest rate of three to four percent, are to be re-done with a rate of two to three percent. The 2014 bonds, with a previous internet rate ranging from three point two to four point seven five, are now reduced to a range of point five to three percent.

The 2018 bonds for the bridge, which previously had a rate of four point four two, are now at a two percent interest rate. Closing on the loans is expected in ten days. Zitnik praised Trenton’s bond rating, noting the city fared well despite the COVID-19 pandemic. He described the process of selling the bonds as a full public offering

Combined the notes total $8,485,000.00 which includes $2,400,000 owed for water system improvements from 2012, $4,935,000 owed for sewer system improvements from 2014 and $1,145,000 owed from 2018 for the 17th Street Bridge. DA Davidson and Company, the city’s financial adviser, is the purchaser.

Provisions of the ordinance allow Trenton to enter into transactions with the Security Bank of Kansas City, Kansas as the trustee to deliver tax-exempt and taxable refunding certificates of participation involving the three projects.

There also is a lease agreement, an escrow trust agreement, and a trust indenture between Security Bank and the city of Trenton. The initial term of the lease ends April 30, 2022, and is subject to annual renewal, with the final term ending in April 2040.

During public comment, Scott Newkirk of 22nd and Pleasant Plain requested something be done about the speeding vehicles, including motorcycles, as well as truck traffic with some tearing up his yard when needing to turn. Newkirk noted there’s a safety issue for children who are at play.

Another resident suggested signage designed to keep truck traffic out of residential neighborhoods. Mayor Linda Crooks said she would look into the matter. Councilman Robert Romesburg, noting the shortage of lifeguards for the swimming pool, wondered if their pay should be increased from $8.00 per hour up to minimum wage. City Clerk Cindy Simpson replied the city is exempt from the minimum wage law.