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OK of $7.6M in bonds expected Tucson City Council set to approve $7.6M for solar panels

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The Tucson City Council is scheduled to consider a $7.6 million bond proposal today to add solar panels to seven city buildings.

About 47 percent of the total $680,000 average annual cost of the bond repayments would come from Tucson Electric Power credits, 31 percent from electricity savings and 22 percent from the city, Deputy City Manager Mike Letcher told us. And $51,300 of the city's $150,000 annual cost is already being paid by water users toward conservation.

At first glance, this looks like a good deal. In tough economic times, it makes sense to spend money on improvements that will add jobs soon, enhance our environment and save the taxpayers money over the fullness of time.

But you can afford to feel good when your bank account is flush; Tucson's is not. City Manager Mike Hein said last month that he expects the next fiscal year, starting July 1, to be the third in a row in which city's sales-tax growth is negative.

Also last month, the City Council approved $31 million in spending cuts to address a projected budget deficit of more than $80 million for the year.

More radical proposed cuts still are on the table, including ending funding for public-access television, the School Plus Jobs program, and city departments such as Urban Planning, Channel 12 and neighborhood outreach.

The Star's Rob O'Dell reported Monday that the federal government would back the new Clean Renewable Energy Bonds and pay most of the interest during their term, which would be not more than 12 years.

The solar bonds are entirely separate from the $78 million in Rio Nuevo revenue bonds that were sold last month. Those will be repaid with sales-tax money raised in the special Rio Nuevo taxing district and rebated to the redevelopment program by the state.

If the solar bonds are issued, the city will be have to repay part of the principal and less than 2 percent of the interest, Letcher told us.

The city's annual payments on the bonds would be about $150,000, split between the city general fund and Tucson Water, he said.

"Out of that, about $98,700 has to be paid by the general fund, out of budgets of the departments that benefit," Letcher said. Some will cover it with new conservation initiatives.

The water department's share — about $51,300 — is already in its budget as a line item for energy conservation and has been factored into its rates, he said. "If it wasn't for this project, it'd be spent for something else."

Letcher also noted paying less than 2 percent interest is a cheap municipal rate. Maintenance for the solar arrays has been factored into the cost, he added.

Still, city departments have already been asked to trim their budgets close to the bone. Services have been cut, user fees have been increased and more cuts are likely.

We hope the City Council will examine the numbers on the solar bonds closely. It concerns us that the plan is on the council's consent agenda, which usually is passed as a whole without discussion.

We believe the solar industry must have a vigorous future in Southern Arizona. With our sunny climate, it's a no-brainer.

We also believe the city has an obligation to press forward in becoming as green as it can afford to be, save taxpayer money and address our future environmental needs.

But first the council must assure itself that going forward with solar bonds will do no harm to vital local services during this recession.