Smithville council directs move toward up to $4 million borrowing for airport work and utility meter replacements

The City of Smithville on July 16 directed its financial adviser to advance plans to issue up to $4,000,000 in borrowing to fund airport projects and replacement of utility meters, with paperwork to be presented at a special council meeting on July 30.

Council members discussed several financing options during a special-called meeting after initial audio problems delayed the start. The agenda item, introduced as a presentation by Samco Capital Markets (described in the meeting as the city’s financial adviser), centered on whether to finance electric meters only or to include both electric and water meters as part of a larger borrowing; airport taxiway engineering and an AWOS match also appeared on the proposed use-of-proceeds list.

The adviser presented estimated scales and amortization choices. Using roughly 2,100 utility connections as a planning figure, the adviser said a $3.1 million borrowing would produce about $500,000 a year in debt service — “that’s roughly $20 per month” per household on a shorter amortization, and roughly $11–$14 per month on a longer schedule (examples discussed during the meeting). The council discussed limiting the initial scope to electric meters (a cited estimate of $2.1 million) to reduce near-term rate pressure and noted that water meters might be bundled later if needed.

Council members weighed alternatives including a revenue bond for airport hangar work (to be repaid from airport funds) and hiring third-party meter-reading services as an interim solution. One council member cited a vendor quote of $20,000 per month to read meters — about $1.7 million over seven years — and said that comparison factored into the evaluation of buy-versus-contract options.

On timing, the adviser said selling certificates of obligation typically requires a council notice-of-intention resolution at least six weeks before sale; adopting the notice at the July 30 special meeting would allow sale and delivery of funds in early November, in time to place orders and begin replacement before the new year if the council proceeds.

A motion was made and seconded to have Samco move forward with the process to issue up to $4,000,000 in certificates of obligation to cover airport projects and water/electric meter replacement and to present the related agenda language at the July 30 meeting. The council recorded roll-call confirmations of approval during the meeting; the motion was approved.

The adviser said he would consult bond counsel about airport financing constraints and provide an amortization schedule for the airport portion so counselors could evaluate surcharges by customer class. Council members asked staff to clarify whether airport fees would be charged to the airport account and not to utility customers; the meeting record shows council and staff agreed airport costs should be borne by the airport account where feasible and that the city would attempt to isolate utility surcharges to affected customers.

The council also discussed longer-term matters, including a potential wastewater project (discussed in broad terms during the meeting as a multi‑million-dollar future expense) and the possibility of offsetting costs with sludge-processing revenue if that market materializes. The meeting closed with a decision not to enter closed session and adjournment.

What happens next: staff and the adviser will draft the notice-of-intention/resolution and supporting amortization schedules for consideration at the July 30 special meeting; council members requested additional detail about fee allocation and about any Sustainability Partners proposal before formal borrowing is adopted.