MOROCCO, Feb. 14, 2011 — Holding a public meeting along with their usual bi-monthly board meeting, the North Newton Board of Trustees heard the costs and repercussions to taxpayers for a proposed wind turbine project. The project includes building a turbine near the North Newton Jr./Sr. High School, and selling the electricity it produces to NIPSCO for 10 to 15 years, before the turbine could be used to power the school building itself.
The total cost of the project would be nearly $2.7 million, with the cost of building the turbine at almost $1.9 million.
Superintendent Brian Smith reiterated his statement that property taxes will not go up, and a representative from Umbaugh & Associates gave a PowerPoint presentation to the board and public regarding the funding process and the costs associated with it. With two resolutions to vote on, one to approve the project, and the other a “Preliminary Determination Resolution,” which begins the process for the project.
In the PowerPoint presentation, it was explained that the corporation has been granted a clean renewable energy bonds were created in 2008, and the IRS is responsible for allocating the funds through an application process. In 2009, the school corporation was awarded $2.3 million in the clean renewable energy bonds for the wind turbine project. The bonds are sold as taxable bonds and the federal government provides fixed interest rates on them.
Matt Edgerly, of Umbaugh, explained the new project would have little impact on property owners, but would be added to the current debt service the corporation is holding for the new Morocco building and other project improvements at the other three schools in the corporation, and when that debt service begins to drop, the new one will take its place and property taxes will not be affected.
Karen Zackfia, the corporation’s financial officer, explained there is a flexibility with the debt service, and in 10 years, the money earned from the turbine could be used to pay off the debt. Edgerly said the federal subsidy would likely pay the majority of the interest for the first few years.
The meeting was opened up for public comment, with only one person speaking. Judy Maggio asked what the estimated profit would be over the life of the turbine. Edgerly answered that estimates done by a company called Performance Services is $2.8 million profit by 2021 or longer if NIPSCO goes into a 15 year contract.
It could be as high as $6-8 million, which Smith explained could go into the general fund to prevent future teacher layoffs. After 2021, the corporation could use the electricity generated by the turbine to power the school and save on those utility bills. Board President Nathan Gibson explained this project would not be debt free, but would be replacing the old debt as it drops off. He asked all the board members if they understood and they did.
The Board had their attorney, Todd Sammons read the first resolution to consider and the board then voted to proceed by approving the resolution in a 5-1 vote.
After that was accomplished, Sammons then read the Preliminary Determination Resolution to enter into a leasing situation with the North Newton Building Corp. to lease for a maximum term of 17 years, based on the $2.3 million project total estimate. The vote was the same for this resolution.