Lack of response from the state Department of Education about whether it will allow the WW-P School District to proceed with a referendum for its solar projects will most likely halt the referendum altogether.
Larry Shanok, district assistant superintendent for finance, told the School Board on March 8 that officials sent a second letter to Governor Chris Christie on March 3 asking for his help to obtain approval to put the referendum on the ballot. “However, the governor continues to decline to give us a direct response,” said Shanok.
He said state officials indicated they weren’t going to approve specific types of referendums, but rather they were going to either approve all 205 requests from districts statewide or none of them.
“We’re very likely to have this delayed,” said Shanok. “We’re going to discuss what makes sense for the future going forward.”
District officials wanted to go out to referendum this year for the second phase of the solar project, which will place solar panels at seven WW-P schools.
The urgency comes as a result of the district’s ability to issue no-interest tax credit bonds from the federal government’s Clean Renewable Energy Bonds program to finance the project. The project would require a bond referendum on the ballot in April’s school board elections. Officials are estimating that they will need to ask voters to approve $6.4 million in bonds for the project.
In the summer of 2009, the federal government approved the allocation of $7.6 million in federal tax credit bonds to cover the solar panel projects at seven of its schools. The allocation, however, comes with an expiration date of two years, and to be able to take advantage of the no-interest bonds, the district will need to take action before the summer.
Because solar energy prices have dropped since the time of the award, WW-P estimates it will only need the federal government to issue $6.4 million of the $7.6 million in bonds available to WW-P.
District officials say that the amount of money brought in by the solar panels will outweigh the money spent. Over the first 12 months of operation after installation, Shanok said the district would see positive cash flow in energy savings, sale of Solar Renewable Energy Certificates (SRECs), and in debt service aid. The project would bring in about $466,000 in revenue during that year.
The district will save in energy costs as well as receive extra credit by sending extra electricity back to the power company for distribution, officials said. By doing that, the district will receive solar renewable energy certificates, which can be sold for income, they said.
Officials also say that while there will be debt generated from issuing bonds for the project, the district will hold to its promise of keeping the annual debt service levy at or below $11.1 million – the promise it made to voters before the $27.5 million building referendum in 2006.
Shanok said officials are examining their other options for the project, including going out to referendum in a special election, waiting for next year’s budget season (when the district would find itself within the 30th month of its 36-month time limit to use the bonds), or using its own Triple A bond rating to obtain good rates to finance the project without using the federal bonds.
“All of those things are being reviewed,” he said.
