Tolland Town Council Won't Bond Geothermal Project

Lease-purchase agreement for new heating and cooling system for town hall and library will save taxpayers nearly $500,000.

The town has decided to pursue a money-saving lend-purchase agreement for a geothermal heating and cooling system in the Hicks Memorial Municipal Center and library instead of the initial plan, which was February's voter-approved bond.

The switch is expected to save taxpayers up to $500,000.

Voters authorized the town to issue up to $3.6 million in bonds. The savings will come via federal stimulus cash.

Speaking at Tuesday night's meeting, Town Manager Steven Werbner said the state had approved Tolland for a program through which 70 percent of the interest costs for a lend-purchase agreement for the project are reimbursed from the $19 million in federal stimulus money that Connecticut has received.

Werbner estimated the savings to taxpayers over the 15 years of the agreement to be between $400,000 and $500,000.

The project is eligible for funding with money generated from the sale of qualified energy conservation bonds issued by the Connecticut Development Authority. The town would pay back the money over a 15-year period as part of its debt service budget.

Despite the projected savings, not every member of the council was quick to embrace a lend-purchase agreement for the project.

Councilmember Jack Flynn said he felt “uneasy” about going with a lease-purchase agreement because that was not the fund mechanism that voters had approved for the project. Voters had authorized the town to issue general obligation bonds of the town to pay for the project.

Flynn said he was concerned that town council’s in the future could use the lease-purchase system to sidestep the town’s bonding requirement for large projects.

There is no requirement for a referendum on a lease-purchase agreement, Werbner said, noting that more typically they are used for purchasing expensive equipment like a fire truck. The agreement is with a lender that offers the best deal in terms of the cost of the lease.

In the end, the council voted 6 to 1 in favor of authorizing Werbner to pursue a lease-purchase agreement to cover the project’s costs from design to installation. The $3.6 million will include the cost of removing the existing heating and cooling systems.

Voting in favor of the agreement were Chairman Frederick Daniels, Vice Chairman MaryAnn Tuttle, Dale M. Clayton, Francis Kennedy, Craig Nussbaum and April Teveris. Only Flynn voted against the measure.

Speaking during the time set aside for pubic participation in the meeting, resident Rich Bozzone praised Flynn for drawing attention to the potential conflict between the town’s $1.9 spending threshold that triggers a bond referendum and the lease-purchase which does not require voter approval at referendum.

Max Headroom April 13, 2011 at 05:30 PM
"Yankee Gas told us it's not practical." Meaning it's not cost-effective for them. I'm not sure that's a valid reason for this decision.
Max Headroom April 13, 2011 at 05:34 PM
Josh, heat pumps are *old* tech - we had one in a house in the 1970s. Geothermal still has many problems and only works efficiently under a narrow range of conditions. Like wind and solar, it's promising... but still on a development path towards true out-of-the-box operation. Install it in universities and tech companies willing to tinker, modify and put up with ongoing revisions, not a business or government building already fully busy with other things.
Josh Freeman April 13, 2011 at 06:07 PM
"heat pumps are *old* tech - we had one in a house in the 1970s" You do realize that geothermal is a "ground source heat pump", right? It's hard to argue it's unreliable and not proven if it's also "old tech" at the same time. Geo has been in use since the 1940s. I expect improvements since then have significantly improved it's performance over the years, but it is hardly "new tech". It is, after all, a heat pump attached to the ground. US DOE: http://www.energysavers.gov/your_home/space_heating_cooling/index.cfm/mytopic=12640
Max Headroom April 13, 2011 at 06:15 PM
I'm *deeply* familiar with energy technology, Josh. :) The heat pump in 1970 was a cantankerous bugger that was slow to heat, slower to cool and in the end was no more cost-efficient than a gas/AC system. One I had in the late 1990s was vastly improved, completely acceptable for black-box residential use. The difference was 25 years of intensive development on the *details* - not the general notion of heat pumping, which has been around since the mid-1800s. Geothermal does not have a good enough track record for general, black-box installation and use yet. Every part of it may be based on old tech, but the devil is very much in the details. Nothing will change the plans now. Let's check back in five-six years and see if we have a cantankerous system that has worked half the time and needed much updating, maintenance and extra cost, or a miracle of greenergy that has saved us money and kept tons of carbon out of the system. I bet one wooden nickel (not to mention my tax dollars) on something a lot closer to the former... because that's where geo energy is right now. Twenty years on... no bet.
Dan Smith April 13, 2011 at 07:23 PM
Hey Al - in 10 years we will be building a smaller High School - the one we have now will be too big and no longer cost effective! Regarding the Town Hall project - after the first cold snap the consultants will advise us that to keep the building warm we have to 1) reduce the amount of healthy (but cold) make-up air, 2) replace all the windows and re-insulate the building to reduce heating load, and last but not least 3) dramatically increase the capacity of the supplemental electric heat. I hope the project includes a new electrical service capable of handling the load.


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