Willington Housing Authority
** SPECIAL MEETING **
MINUTES
February 16, 2015
60 Old Farms Road – Senior Center
Willington, CT
PRESENT – Chairman Robert Campbell, Vice Chairman Wilbur Gangaway, Secretary Don Berg, Member Laurel Millix, Treasurer Claudia D'Agata, Financial Consultant David Berto.
1. Call to Order – The meeting was called to order at 6:09 p.m.
2. Present to speak – No member of the public present to speak.
3. Old Business – Button Hill senior housing project
D. Berto reported on the status of the project. Construction is now halted because of snowfall. He said there will be a meeting with Zlotnick Construction on Thursday (Feb. 19) regarding the final gravel base, and a schedule for completion of the current scope of work in the spring, including seeding.
C. D'Agata asked why the gravel work wasn't completed when the snowfall didn't occur until recently. D. Berto said he doesn't know why it wasn't done according to their contract. R. Campbell said that is part of the reason for the upcoming meeting. He noted Gardiner & Peterson reviewed the grading and there is some fill where it's not supposed to be, and some base where it shouldn't be. He said the contractor will be given a deadline for completing this work.
D. Berto said that as the next phase of the project begins, funds are needed from the Federal Home Loan Bank (FHLB) and the Department of Housing (DOH). He said that at the last meeting he reported the DOH had assigned a lawyer to address the closing list, but at the time the lawyer had not actually been contracted. He has since been hired and the WHA attorney Jim Scaramossa is now having discussions with the DOH attorney. D. Berto said he, and Lynne and J. Scaramossa have scheduled a conference call for Tuesday, Feb. 17 to try to establish a schedule, but this will be dependent on the DOH attorney.
D. Berto said Federal Home Loan money is coming in two parts: the $500,000 grant and the $1.7 million loan.
The grant will come as soon as the second part of the project begins and it will be used for construction. He said Atty. Scaramossa has the mortgage form and the note that gets filed in order to release those funds. The loan doesn't come until the end of the project; in the meantime, Putnam Bank will loan the funds, so he has been in contact with the bank to ask them to begin preparing the necessary documents. When they are complete, the WHA can begin drawing down the construction loan and the grant. He said the DOH funding is the one that tends to take the most time to release.
R. Campbell asked if Gardiner & Peterson and D. Berto can be paid from the FHLB funds. D. Berto said yes, after the closing date, the funds can be used for unpaid bills. R. Campbell said the bank has given March 19 as a closing date for the gap funding.
R. Campbell asked when a contract will be signed with Zlotnick Construction for the next part of the project. D. Berto said this would be done after the closing.
R. Campbell reported that he was contacted by the Town after the last WHA meeting about representing the project as a separate line item in the Town budget, instead of as a capital project and he was asked what the year-to-year expenses of the housing project are expected to be.
He said he expects the housing project to stand on its own once it's completed, so should the WHA tell the Town that it doesn't foresee at this time needing its assistance? He added that the WHA will continue to exist, separate from the Town, to oversee the housing and so there will be some expenses, such as Directors and Officers insurance and secretarial services, totaling about $1,700 a year. D. Berto said the projected net cash flow from rentals is $17,000 a year. R. Campbell said that he will inform the Town that once the units are rented, he doesn't foresee a need for Town funding.
D. Berg began a discussion of solar power generation and use for the housing units. He said they will likely have to use ground mounts for the solar panels within the 200-ft setback, because the panels are too large for the rooftops, so this may require review by the Zoning Board of Appeals. The rooftops can only accommodate about one third of what's needed, he said. There was discussion about location of the ground mount in relation to the tree line and property boundary and proximity to the meter in order to minimize the amount of wiring.
There was discussion about 3 options: using solar to generate power for heat, hot water and general electrical needs; just for electrical needs (including the 4 owners' panels); or for electrical needs (including the owners' panels) plus heat/air conditioning (hot water would be heated with propane).
D. Berg said this question can be resolved when the results of Eversource’s (formerly CL&P) Small ZREC Tariff “lottery” are known.
D. Berg presented the net benefit of each of these 3 options over the life of a 20-year loan, likely via C-PACE/ a special assessment on the property. The benefit calculations are based on the assumption of no additional funds available from other sources. although D. Berto said it may be possible to find funding to defray the initial cost of the solar system.
D. Berg described two different incentive programs, the Small ZREC Tariff and the Medium ZREC RFP.
He said the Small ZREC Tariff is an incentive program available now, with a 2-week application window. ZREC (Zero Emissions Renewable Energy Credit) monies are paid to the owner of the PV (photovoltaic) solar system for generating power. The owner of the system can choose to use all of the power to offset his electrical usage and sell any excess back to the utility. The REC (Renewable Energy Credit) payments are paid to the owner of the PV system; these funds come from charges the electric consumers pay on their power bills.
D. Berg said the Small Tariff REC price is currently set at $80.97 per 1,000 kW hours of renewable energy production. The Medium ZREC program requires offering a bid for the price the WHA will accept, probably $60.60 per REC.
D. Berg said that projects with a use of 100 kW or less (behind any one revenue-meter) can apply for the small ZREC Tariff. He said if only one out of four of the Button Hill buildings is funded by the Small Tariff program, the other three may be eligible under the Medium ZREC Tariff. The WHA also could reapply during the next cycle.
R. Campbell noted there are upfront expenses, but the ZREC payments could be used to repay a loan for the equipment.
D. Berg reviewed spreadsheets for each proposal.
The first proposal is for 86 panels to produce 22.8 kW hours, which includes the needs for six units and owners' panels and using gas, instead of electricity, for heat and domestic hot water. This totals $26,775 which offsets all of the electrical for one building out of the four, with a cost of $3.64 per watt. The 60-cell panels are about 18 square feet.
D. Berg said he plans to make four separate applications for four meters for four buildings, and he has to include a value in the applications for how many ZRECs will be generated for each building.
R. Campbell asked D. Berto if there's a possibility of finding funding for whatever buildings don't receive ZREC payments, if future applications are not approved. D. Berto asked how the panels will be paid for if the ZREC application(s) is approved. D. Berg said probably through a 20-year CPACE loan. D. Berto asked if the same could be done without the ZRECs. D. Berg said it's more difficult to show the ability to repay the loan. R. Campbell asked if it's possible to increase the rents a small amount for a period of time and then reduce the rents at a later date. D. Berto said raising the rents is an option, and they shouldn't be lowered later because the tenants are getting the benefit of free solar-generated electricity.
D. Berg said the utility determines the Small ZREC amount based on 10 percent above the result of the weighted average of the previous medium ZREC bids, or about $81, but historically the REC has decreased each year
R. Campbell asked how much paperwork ZREC payments will generate for the Button Hill management company. D. Berg said it's a fairly automatic process, but the management company should check CL&P's (now Eversource) meter reading reports.
C. D'Agata asked if there will be electric bills. D. Berg said if the panels generate enough power to cover the buildings' costs, there would only be a small monthly service charge. At the same time, Eversource would pay WHA for ZRECs per kW hour.
D. Berto noted that income from ZRECs would be used to pay for any loan taken out to pay for the solar panel array, which would be about $566 a month. D. Berto estimated that for 15 years, the amount paid for ZRECS would exceed the monthly loan payment (based on a 5.5 percent interest rate). ZRECs are paid for 15 years.
There was more discussion about the 3 options: using solar to power only electrical, to power electrical and heat pumps, and to power all electric.
D. Berg said the all-electric option works out best, generating about $42,000 over the life of the loan.
D. Berg said that applications for the Small Tariff need to be submitted within the next 11 days; he can apply for four 50 kW systems now. Applications for the Medium Tariff cannot be submitted until April or May.
There was discussion about submitting 7 applications for the Small Tariff funds, in order to increase the odds of being picked in the lottery: one application each for 4 buildings (4), plus two applications – one each for 2 buildings (2), plus one for all 4 buildings (1).
R. Campbell suggested submitting one application each for 4 buildings (100 kW) and one application for all four buildings at 100 kW.
There was discussion about the size of the solar array. D. Berg said that a 100kW system, with 343 panels – at 18 square feet each – would have a total area of about 6,000 square feet (30 x 200 ft.), not including space between the panels needed to avoid shading between rows of panels.
There was discussion about how the buildings would be metered and PURA requirements.
Regarding bills from Gardiner & Peterson, D. Berg asked if the WHA could get a better itemization of what they include. R. Campbell said there were some extra costs and when he meets with G&P this week, he will ask for a breakdown.
4. New Business – None.
5. Correspondence – None.
6. Approval of Minutes – L. Millix moved, and W. Gangaway seconded the motion, to accept the Jan. 12, 2015 minutes as presented; motion passed unanimously.
7. Treasurer's Report – C. D'Agata reported an expenditure of $69.97 for recording secretary expenses, leaving a balance of $2044.59.
8. Adjourn – The meeting adjourned at 7:33 p.m.
Respectfully submitted by Recording Secretary Brenda Sullivan. Please note that minutes are posted prior to being officially approved – changes/corrections are indicated in the subsequent month’s meeting minutes.
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