By Jeremy Twitchell (contact)

Mon, Jan 12, 2009 (11:39 a.m.)

Henderson is working out a unique arrangement that will allow it to make $22 million worth of energy efficiency retrofits to city buildings at no cost to the city.

"It's really kind an intriguing financing arrangement," Henderson Finance Director Steve Hanson said Tuesday when he presented the item to the City Council.

The city has partnered with energy firm Ameresco, which recently completed a study of energy use in all city facilities. It recommended about 20 projects that the city could do to save money.

If the city borrows the $22 million to make the retrofits, Ameresco would guarantee through a performance bond that the money Henderson saves on energy each year will be greater than the money it spends on the loan payments.

If the savings fail to be equal to or greater than the loan payments, the performance bond would require Ameresco to pay the difference.

"Essentially, it's a zero sum game for the city of Henderson," Hanson said. "There's no financial impact to the city."

The arrangement is patterned after a similar one the two sides made in 2006. That $2.85 million deal replaced the lights in traffic signals around the city with low-energy light-emitting diode (LED) bulbs. Ameresco guaranteed the city would save almost $253,000 per year. In the first year after the project's completion, from Oct. 1, 2007, to Oct. 1, 2008, the city saved more than $256,000, city spokeswoman Kathy Blaha said.

Hanson said, "We were reticent to do anything like this until we saw the success of the traffic light program. Once we saw that, we were willing to do this on a larger scale."

The next phase will be much broader, including upgrades to boilers, chilling units, vending machines and light bulbs. It will touch every building the city owns, from City Hall to recreation centers.

The city is finalizing the project list, Blaha said, and plans to begin work in March.

Hanson said the city will borrow the $22 million from a bank, because the economic climate has made the chances of a bond issue minimal at best. He said the city will finance the loan over 15 years.

"And the best part is that once the loan is paid off over those 15 years, we still have the savings," Hanson said.

Jeremy Twitchell can be reached at 990-8928 or jeremy.twitchell@hbcpub.com.