New Milford school energy savings program needs more review
NEW MILFORD -- A novel way for the school district to get new equipment and save energy costs has hit a legal snag.
Several town and school leaders, however, still think the idea has merit.
"I'm going to find a way to make it work,'' said John Turk, the school district's director of fiscal services.
School leaders recently endorsed hiring Siemens Building Technologies to install $3.7 million worth of energy-efficient equipment, including boilers, in four of its schools over the summer.
To pay for the equipment, Siemens proposed a municipal lease/purchase contract. The town would borrow the upfront costs from a bank, then the district would pay back the money over 20 years through guaranteed energy cost savings.
Seimens guaranteed a savings of $235,000 annually; if the savings do not reach that amount, Siemens will give the district the difference.
The Siemens program, called a performance contract, has been endorsed by the Connecticut Conference of Municipalities. Siemens was selected as the project provider for CCM's members through an extensive bidding process.
The school board needed Town Council approval to finance the project as proposed. Last month the council had questions about the legality of the arrangement and delayed making a decision until the town attorney could study it.
At the Town Council meeting Monday night, Town Attorney Randy DiBella said he does not believe the program as proposed meets the town's bidding or "pay as you go" financing protocols.
Turk said he was disappointed with DiBella's finding, but he respects his expertise and believes there are ways to go forward with this type of energy program without violating the town's bidding or financing requirements.
"I'm counting on it,'' Turk said.
Even though he has no quarrel with CCM's bidding process, or Siemen's qualifications, DiBella advised to offer this program the town must select its own qualified bidder.
As for the financing of equipment, DiBella said he does not believe permanent improvements to the schools can be considered a lease. DiBella's opinion is any equipment purchase must be paid for through the town's traditional long-term debt financing. That would require town voter approval.
If town and school leaders wish to pursue this type of program, DiBella said he will work with them to assure proper procedures are met.
After about an hour of debate, with most council members favoring the idea but concerned about the legalities, no action was taken.
Contact Nanci Hutson at email@example.com or at (860) 354-2274.