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Council approves borrowing parameters for solar project after consultant says domestic-content choice yields net savings
Summary
Council approved financing parameters for a solar array at the wastewater treatment plant using the Rural Water Financing Agency. Consultant said opting for domestic-content components raised the not-to-exceed borrowing number but produced a net savings from tax credits; council approved the ordinance by roll call, 7-1.
The borough council voted to approve borrowing parameters to finance a solar project at the wastewater treatment plant, adopting an ordinance that authorizes the borough to use the Rural Water Financing Agency for the loan.
The motion, read into the record by a council member, described parameters that would "outline the financing of the solar project at the wastewater treatment plant via the Rural Water Financing Agency." No individual mover or seconder was recorded in the minutes excerpt.
Mike Fakagan of Raymond James, the financing consultant, told the council that a change to use domestic-content components increased the published "not to exceed" borrowing amount but, after tax credits, would reduce net project costs. He said the domestic-content choice raised the borrowing amount by about $145,000 while the investment tax-credit and domestic-content bonus produced a net positive to the borough of roughly $65,000 in the consultant's example.
"You're going to borrow a $145,000 [more], you're getting more back from the investment tax credit," Fakagan said, summing the tradeoff.
Fakagan also said the published not-to-exceed amount in the public notice was higher than the expected borrow; he explained the larger figure was a legal maximum needed for public notice. The ordinance sets a closing timeline tied to the interest-rate lock in September; Fakagan said rates would be locked on Sept. 9 and the borough would close on Sept. 30 if the council approved the ordinance.
Council conducted a roll-call vote after discussion and clarification about accounting and closing procedures. The clerk recorded votes as: Bridal (yes), Collazo (yes), De Bowser (yes), Brick (no), Lancaster (yes), Newell (yes), Cernizo (yes), Smith (yes). The clerk later summarized the tally as 7 yes, 1 no; the motion carried.
The council directed staff that project funds and pay orders tied to invoices would be tracked and presented to the council for approval as bills were paid. The consultant said closing documentation and a settlement sheet would be available for the borough and auditors.
Next steps: interest rates to be locked pending the borough's continued authorization; staff to manage closing paperwork, and council to approve pay orders when invoices are presented.
