School Heating Plan Lacks Lender
Claremont — There is still no financing in place to fund $5 million in energy equipment upgrades at the district’s schools, but some progress was reported at yesterday’s Stevens High School Renovation Committee meeting.
Committee Chairman Dave Putnam said two applications are being prepared for two potential lenders.
“As I understand it, applications have been filled out and now they are doing research and putting together information and data for review by the attorneys,” Putnam said. “They are also reviewing the Johnson Controls contract.”
Putnam said the New Hampshire Bond Bank, the usual lender for municipal and school building projects, is not a potential partner because the warrant article approved by voters was for a lease/purchase, not a bond. Further, he said, most banks don’t loan under lease/purchase agreements because ownership of the collateral is not 100 percent with the borrower.
The school district has not signed the contract with Johnson Contract because it has been unable to secure an interest rate that makes the project financially viable.
Johnson guarantees that the savings in annual energy costs will be enough to cover the annual lease payments for the equipment, which includes wood pellet/propane boilers and Stevens High School and the middle school.
The committee said it would be ready to move on the first proposal that comes forward and not wait too long for the second one.
The interest rate, which is the key piece to the financing, is an unknown at this point, said Steve Horton, the school district’s representative on the Johnson Controls project and the $12.6 million Stevens renovation.
“We have a projected rate that will help us reach our goal,” Horton told the committee, but officials did not share that rate publicly last night.
Putnam said there still is time to schedule the energy efficiency work so it coincides with other site work being done for the renovation project.
“Every day (without the signed Johnson Controls contract) is affecting us but it is not hurting us yet,” Putnam said.
Horton said in his experience, demolition and removal of the old boilers would take about a week and installation of the new system, about two weeks. Mid-October is estimated the time when the school will require heating.
A spike in interest rates last month put the district in its current financing predicament. At last week’s meeting, it was stated that a rate increase of 1 percent, to 5.5 percent, would add $600,000 to the cost of the energy efficiency work.
Patrick O’Grady can be reached at email@example.com