According to Philip Richter, senior vice president and manager for public finance with UMB Bank in Kansas City, UMB will serve as corporate bond trustee. The bonds will be held for the YMCA and sold as funds are needed. The revenue bonds are supported by a note and a mortgage.
"The IDA has no liability, or the city," Richter said. "This is purely a revenue bond of the YMCA."
David Martin, a bond counsel with Gilmore and Bell, which prepared papers for the sale, explained the bonds are payable by the IDA from funds owed by the YMCA. Money from the YMCA's capital campaign would be placed in a special fund to pay for the bonds.
"None of that places a payment obligation on the IDA. It's a pass-through to the trustee," Martin said.
As a 501(c)3 not-for-profit corporation, the YMCA is able to take advantage of the authority granted by the Missouri General Assembly to IDAs to issue tax-free bonds for recreational facilities. The first draw on the bonds would be $50,001, an amount determined for tax purposes.
Martin said he hoped to have the final paperwork for the bond transaction completed by July 22. Brad Toft, YMCA chief executive officer, said he would sign the construction contract as quickly as possible after that to begin work in earnest on the site at the west end of Monett's South Park.
IDA board member Brian Hunter asked how much money would be saved by using tax-free bonds. Richter said the exact savings would depend on how quickly the debt was repaid. The difference would be about 2 percent, or between $45,000 and $60,000.
"Once it's fully funded, it will be twice that," Richter said.
Michael Garrett, chairman of the Monett Area YMCA's capital campaign, said more than $10 million has been raised for the project. Funds will be paid to the YMCA over the next three to five years.
"The interest savings is significant to fund the kind of facility the community desires," Garrett said.
"On behalf of the Y, we appreciate the cooperation of the IDA, and that a hometown band was the successful bidder," Garrett continued. "It's a good arrangement for all concerned."
A poll of the IDA board members revealed no public comment had been provided on the proposed bond issue. Board members then unanimously approved issuing the bonds. Mark Nelson, chairman of the IDA who presided at the meeting, signed the necessary documents to approve the bonds.