North Vernon’s efforts to switch city facilities from conventional electric to solar-power will result in more cost savings than originally anticipated. Months ago, the city council authorized Mayor Mike Ochs to execute the documents allowing the change if financing was able to be established. The city has been working with Johnson-Melloh Solutions, an energy service company, to formulate a proposal. City officials say that Johnson-Melloh was a driving force in getting the Jennings County Public Library switched over to solar years ago.
Shawn Gerkin, clerk-treasurer for North Vernon, explains that the city had to walk a tight-rope to obtain funding. He says that the language of the contract for financing had to be specific in order to be in compliance with a state statute that allows municipalities to enter into an “energy savings contract” without it being considered debt for the city. Gerkin gives high praise to Kevin Gabbard, his team at MainSource Bank and their attorney’s from Barnes & Thornburg for their help in obtaining financing for the project. While Gerkin says the entire ordeal has been a lot of work for him and other city officials, he called the end result “historic,” so far as it comes with Indiana banks getting involved with projects such as these.
Gerkin explains that under the deal, no more than $5.399 million will be financed at a rate of 2.45 percent. The term of the loan is 16.5 years with the first payment from the city due 18 months after closing the loan. City officials are hopeful that the loan will be closed on Aug. 1. Gerkin stresses that these loan payments will be paid for completely out of money already set aside and appropriated for conventional electricity costs. In addition, he says that the city was anticipating an interest rate of approximately 3.65 percent. Thanks to MainSource officials and the work of the city, Gerkin says that the city will save over $600,000 over the length of the loan on interest alone.
City official say that once the loan is secured, work on switching over to solar power can begin shortly thereafter.