Politics & Government

City Could Sell $12M in Bonds to Fund Court-Mandated Upgrades at Wyandotte Power Plant

The revenue bonds would pay for environmental improvements at the city's coal-burning power plant.

Wyandotte officials are expected to vote tonight to issue and sell up to $12 million in revenue bonds to pay for court-mandated upgrades at the city’s power plant.

If approved, the money would be used to install a baghouse, which is a device that will remove particles from the gas before it leaves the boiler.

The project is necessary due to a lawsuit filed against the city by the federal government that claimed the city's power plant emitted unlawful levels of nitrogen oxide, sulfur dioxide and carbon monoxide.

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Despite some controversy, the city , which alleged , by agreeing to make several improvements at the facility, including the installation of the baghouse.

The city also has changed the way the coal is handled at the plant and took six gas vehicles out of commission and replaced them with natural gas vehicles. The city also was slapped with a $112,000 civil penalty.

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City Administrator Todd Drysdale said issuing revenue bonds is the most prudent way of paying for the court-mandated improvements.

“This is how municipalities borrow money,” Drysdale said. “We can’t go to the bank and get a loan and pay the loan back. What we have to do is sell bonds and bondholders need to purchase those bonds and then we make principal and interest to the bond holders in exchange for the money we get from them purchasing the bonds.”

The Wyandotte Municipal Services Commission, which oversees the city’s utilities, voted Aug. 23 to issue the bonds and is asking for the  council's concurrence tonight.

Drysdale said there is nothing peculiar about the request. Several years ago, he said, the city issued bonds to construct the new / building, as well as to make renovations at .

If the council approves the matter, a 45-day referendum period would begin. During that time, state law allows residents to petition the city to have the matter put before voters in an election.

If bonds are sold, Drysdale said, he expects that a large financial institution would buy them and then sell them to individual bank investors.

Because the city operates its own electric company through , Drysdale said, the utility, not the city, would be on the hook if anything were to go awry.

 “The city itself isn’t responsible for the repayment to the bondholders,” he said. “It’s built into the electric system. The repayment is backed by money from revenue of the utility.”

Even though the bonds haven’t yet been issued, residents are already feeling the pinch for them. The cost was already factored into . That money will help repay the $12 million plus interest over the course of 25 or 30 years, Drysdale said.


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