County explores financing


Chris Meyer of Energy Optimizers, USA, explains how a federal program could finance certain portions of the proposed renovations to county-owned buildings. The commissioners are considering financing the project and using the saved capital for investments and interest earning.

WILMINGTON — The Clinton County commissioners met Wednesday with a number of people to discuss financing options for renovations to the Clinton County courthouse, prosecutor’s office and Veterans’ Service Commission’s office.

Taking no official action, the commissioners solicited ideas on how the renovations could be financed from Morgan Stanley’s Brian Andzik, Clinton County Port Authority Chair David Hockaday, and Chris Meyer, director of Property-Assessed Clean Energy projects for Energy Optimizers, USA, also voiced ideas on how to finance the project.

Commissioner Kerry Steed asked Commissioners Mike Curry and Pat Haley last week if the county would look into financing the renovations and investing the deferred money to see if the county could save money when the investments and payments come to an end. The county does have the ability to pay for the renovations outright.

“If we deferred paying for this project right now and we wanted to invest, we would be in a negative for a few years with the potential of having much positive towards the later years which would make up for the negatives that we would have in the early part,” Steed said Wednesday.

Andzik said the goal was to preserve capital and either have money left over to do something else with or generate favorable interest along the way.

Andzik said the most important number is the interest rate on borrowed money, a number that the county doesn’t have yet. He said once the county has that number, Morgan Stanley could begin looking at different investment scenarios to see if financing the renovations and investing the deferred capital might be worth it.

As for the earnings side of the equation, Andzik said Morgan Stanley projected 3 to 3.23 percent interest on 10-year bonds. He predicted higher interest earnings in the years to come.

In short, the interest earned on investments during the loan’s life must exceed the interest incurred. At the same time, the investment pool of cash will begin shrinking as payments occur, so the interest must be high enough to offset the shrinking.

“Typically, we wouldn’t recommend an upside down strategy in terms of negative spread to the client so that you’d have negative arbitrage, that’s just unfavorable cash flow,” Andzik said. “If, as a group of commissioners, you decided that it was worth that because the amount might be small enough to capture that opportunity later, then we can help you structure that.”

Andzik said he has seen other organizations make such decisions.

Meyer said PACE, a federal program, assesses the property itself over a number of years, usually 15, and finances the up-front cost for a clean energy project.

Meyer said PACE could be used to finance parts of the proposed renovations, including lighting, HVAC and

If used, the PACE portion of the financing would be financed through the port. Hockaday said the port was looking into setting up a bond issue through the Toledo-Lucas County Port Authority, since the port doesn’t have enough money to qualify to carry a bond fund.

“The issue looking at a project like this is identifying which of those aspects of your plan are going to get into the energy efficiency realm,” Meyer said. “Masonry restoration is probably going to have very little impact energy-wise, but certainly lighting.”

The project, if approved, includes roof work, lighting upgrades and masonry restoration at the courthouse, Veterans’ Service Commission and prosecutor’s office. As previously reported, the commissioners have sounded support for the project even though they haven’t signed a contract to undertake the work yet.

Perfection Group, the company that proposed the renovations, estimated about $68,000 in annual repair and lighting savings.

Commissioners also:

• Held a second public hearing on Clinton County 2015 CDBG grant. During that meeting Amy Schocken, of Community Development Consultants of Ohio, presented a proposed budget and projects. The projects included 10 fire hydrants for Blanchester ($40,000), cleaning out Wilson Creek in Sabina to improve flooding and draining ($28,000, with an additional $2,384 from Sabina), a handicapped accessible walkway to David Williams Memorial Park in Wilmington ($20,000). Awards will be announced in August.

• Signed an almost $54,000 contract with Miami Valley Education Computer Association to install fiber optics for the courthouse.

• Signed subgrant agreements with Workforce Services Unlimited to provide services for the Workforce Innovation and Opportunity Act. The agreements provide for out-of-school youth programming, management and oversight of WIOA funding and activities and staffing and business operations.

• Approved the distribution of $59,711 in permissive tax monies for Sabina.

Reach Nathan Kraatz at 937-382-2574, ext. 2510 or on Twitter @NathanKraatz.