MONROE - In a short, rescheduled meeting Monday, Monroe Common Council agreed to an alternate form of payment for HVAC updates at City Hall and municipal light replacements downtown by approving a $1.4 million tax-exempt lease through Woodford State Bank.
The lease acts as a loan, allowing the city to purchase HVAC equipment that will be used as collateral for the borrowed funds.
City Administrator Phil Rath updated council members on an email he said he had sent roughly an hour before the meeting which included a lower interest rate for the 10-year payment plan. Though the aldermen present, Michael Boyce, Brooke Bauman, Tom Miller, Chris Beer, Richard Thoman and Ron Marsh, all voted in favor of the lease, council will need to formally adopt an agreement drafted by Woodford at the beginning of next year.
"What happens with approval here, they'll go forward with all of their due diligence on their side and then we'll get the actual lease documentation on the Jan. 2 meeting," Rath said.
Council members Jeff Newcomer, Charles Koch and Rob Schilt were absent from the meeting.
Work for the capital savings project will be performed by Schneider Electric, and according to projections, would save the city $25,000 annually in energy costs.
The project is meant to update aged climate controls within City Hall, which still require the physical manipulation of levers in the basement to change the temperature within the building. Rath said in the past, some city staff would use space heaters to accommodate for low temperatures in offices. Schneider Senior Project Manager Ty Miller noted during a tour of the building in August that the "antiquated" system also causes humidity issues in City Hall.
The lease allows for pre-payment without penalty, Rath said. The amended terms approved by council includes a fixed 3.2 percent interest rate, which means annual payments would be just over $160,000 rather than the earlier $162,000. The original proposed rate was 3.5 percent.
Life expectancy for the new mechanics system, which would utilize electricity rather than the current non-electric, air-operated mechanics, would be roughly 20 years. The system controlling heating and cooling within the building now runs on an air compression system and lacks the ability to adjust temperatures automatically with the touch of a button.
The council had been discussing whether the cost of the project was necessary in mid-September while deliberating the 2018 budget, but decided the work was necessary in early November. The final lease agreement will be considered during the first January council meeting.
The lease acts as a loan, allowing the city to purchase HVAC equipment that will be used as collateral for the borrowed funds.
City Administrator Phil Rath updated council members on an email he said he had sent roughly an hour before the meeting which included a lower interest rate for the 10-year payment plan. Though the aldermen present, Michael Boyce, Brooke Bauman, Tom Miller, Chris Beer, Richard Thoman and Ron Marsh, all voted in favor of the lease, council will need to formally adopt an agreement drafted by Woodford at the beginning of next year.
"What happens with approval here, they'll go forward with all of their due diligence on their side and then we'll get the actual lease documentation on the Jan. 2 meeting," Rath said.
Council members Jeff Newcomer, Charles Koch and Rob Schilt were absent from the meeting.
Work for the capital savings project will be performed by Schneider Electric, and according to projections, would save the city $25,000 annually in energy costs.
The project is meant to update aged climate controls within City Hall, which still require the physical manipulation of levers in the basement to change the temperature within the building. Rath said in the past, some city staff would use space heaters to accommodate for low temperatures in offices. Schneider Senior Project Manager Ty Miller noted during a tour of the building in August that the "antiquated" system also causes humidity issues in City Hall.
The lease allows for pre-payment without penalty, Rath said. The amended terms approved by council includes a fixed 3.2 percent interest rate, which means annual payments would be just over $160,000 rather than the earlier $162,000. The original proposed rate was 3.5 percent.
Life expectancy for the new mechanics system, which would utilize electricity rather than the current non-electric, air-operated mechanics, would be roughly 20 years. The system controlling heating and cooling within the building now runs on an air compression system and lacks the ability to adjust temperatures automatically with the touch of a button.
The council had been discussing whether the cost of the project was necessary in mid-September while deliberating the 2018 budget, but decided the work was necessary in early November. The final lease agreement will be considered during the first January council meeting.