Rockland to consider reducing streetlight loan from seven to five years

Sun, 01/12/2020 - 4:15pm

ROCKLAND — The project cost initially estimated to cover the conversion of  Rockland’s City streetlights to LED has come in over budget, according to Rockland City Manager Tom Luttrell, during the Jan. 6 City Council meeting. 

Luttrell, however, has conceived a solution that not only resolves the issue, but may generate significant savings in the long run.

The City had initially created an order to use $400,000 out of the Undesignated Fund to cover the entire project, allowing for a seven-year payback to remit the account, but also showing no savings to the taxpayers.

The total project bill has now increased to $538,208.

To cover the funds, Luttrell has proposed reducing the seven-year loan for the new fixtures (lights), that Realterm Energy will be providing, to a five-year loan. 

With a five-year lease, based on a 10-year warranty for the fixtures, Rockland would see an aggregate savings of $505,000, over the 10 years from what Rockland is currently paying.

If the City repaid the entire balance out of the Undesignated Fund for more than 10 years, it would only save $340,000, according to Luttrell.

Luttrell has also proposed taking the $188,172 out of the Undesignated Fund. Based on his calculations, Rockland will save $13,000 in its budget. From there, people will see an immediate savings.

Taxpayers will pay for five years, “and then you’ll see 100 percent savings from there,” he said.

Taxes will not increase because of this alteration, according to Luttrell. The energy savings, $13,000 per year, will cover the difference annually for five years. After five years, the fund will generate another five years of obvious savings for a total of $87,000.

As Ed Glaser concluded after listening to Luttrell’s proposal, “it’s still going to save us money in the long run, but it will also be a break-even as the loan goes on.”

Council members will address the ordinance in First Reading during the Monday, Jan. 13 regular City Council meeting.

ORDINANCE AMENDMENT Lease to Own Contract - LED Streetlight Conversion 

THE CITY OF ROCKLAND HEREBY ORDAINS AS FOLLOWS: 

THAT, pursuant to Charter Section 702(c), and Chapter 2, Section 2-105 of the City Code, the City Manager is hereby authorized to solicit competitive bids and to enter into a Lease-to-Own contract, having a term of no more than 5 years, in a total principal amount not to exceed $350,036, for the conversion of our Streetlights to LED.

 

Reach Sarah Thompson at news@penbaypilot.com