Rather than borrow $4 million with a 20-year payback to finance several energy-saving projects at county buildings, which was meeting some stiff opposition from some members of the County Legislature, a new plan for the county to loan itself the money for the contract with Johnson Controls went over well Wednesday at the Ways and Means Committee meeting.
County Highway Superintendent Tim Hens presented the proposal yesterday and was told to return at the next Ways and Means meeting with a resolution the committee can vote on.
The plan would: use $1.1 million that the county needs to spend anyway on some need capital improvement projects; use $1 million from the building equipment reserve; and borrow $1.8 million from the infrastructure fund.
The county would pay its money saved from the lower energy costs to pay back its infrastructure fund at 2-percent interest. Over the 10-life of the loan, the county would pay itself more than $200,000 in interest that would flow back into the infrastructure fund.
That's a lower interest rate than proposed for the original $4 million loan, which is 3.5 percent, and lower than the 5-percent interest County Treasurer Scott German estimated a municipal bound would cost.
Over the 20-year life of the contract with Johnson Controls, by paying off the entire cost of the contract in the first 10 years, the county will realize the benefit of an additional $800,000 in energy savings in that second 10 years. That money would have been paid toward the loan if the whole $4 million was financed by Bank of America.
Hens also discussed another proposal floated by some members of the legislature two weeks ago, that the county put down $1 million on the loan. That would also save the county money, but not as much as the self-financing option.
"I think it is a good deal for the county under all three scenarios," Hens said. "The self-funding option is by far the most beneficial to the county in terms of savings to the county and return on the investment."
Most of the opposition to the original proposal came from legislators Gary Maha and Andrew Young. Young could not attend Wednesday's meeting and Maha didn't express any objections -- nor strong support -- for the revised plan.
Marianne Clattenburg, Shelly Stein, Bob Bausch and Gordon Dibble all seemed to react favorably. Greg Torrey didn't express an opinion either way.
Legislator John Hilchey was particularly enthusiastic.
"There are very few times that a government can spend money and have it pay for itself," Hilchey said. "You can put a new road in; you can put a new bridge in; you can build a new jail. They don’t pay for themselves. This is an opportunity to make an expenditure that will pay itself back. To me it makes sense."
