Pool, arena, county burdened by bond project’s broken promises, some say
ALPENA — In 2013, the Alpena County Board of Commissioners took on more than $1.5 million in bond debt to improve energy efficiency at many county-owned facilities.
The hope was that savings from those improvements would cover the 15 years of monthly payments to repay those bonds.
It appears those hopes haven’t been realized.
Seven years later, the county still doesn’t know how much — if any — money has actually been saved, while the bond debt is now having serious impacts on the bottom lines of the county’s Plaza Pool and Northern Lights Arena.
“We, at this point, can’t prove that any of these entities are saving money from the project,” said Alpena County board Chairman Bob Adrian. “We assume they are, but we can’t prove it.”
Ameresco, the Massachusetts-based company that performed the upgrades, promised the county that, if the predicted savings weren’t met, the company would cut a check for the difference between the actual energy costs and what it had predicted. Former commissioner Lyle VanWormer said he knows Ameresco did so one time, paying the county about $1,000, but it appears no other reimbursements have been made.
Officials from Ameresco did not return messages seeking comment.
After securing the bonds, the county required entities such as the pool, arena, and the Alpena County Regional Airport to pay their portion of the bond debt from money that was supposed to be saved through lower energy expenses.
What has materialized, however, is that the high monthly debt payments have handcuffed the facilities’ budgets, forcing the county to continually subsidize some of them just to keep the doors open, even as the county faces its own budget shortfall.
That unexpected spending has raised the ire of some county officials, the controversy piquing this week when Adrian and another commissioner suggested tapping the county’s Youth and Recreation fund — against the wishes of the committee in charge of that fund — to once again subsidize Northern Lights Arena.
‘IT HASN’T WORKED FOR US’
Adrian, the county board chairman, said the arena management group, Northern Lights Arena-Community is being punished for a decision that was made years ago, which, it now appears, may have been a bad one.
“Our equipment at the time was pretty old, expensive to fix, and it would have been impossible to replace it all at one time,” Adrian said. “The Ameresco project allowed us to stop putting off replacement and from having to do one small project at a time and get it all done at once.
“Unfortunately,” Adrian added, “my sense is the savings projections made then don’t meet today’s economic conditions.”
He said Ameresco has done one energy audit, but, to this day, the county has no idea whether any savings were realized from the costly upgrades.
Meanwhile, the arena and Plaza Pool — both of which have struggled to raise money as fewer people pay to use the facilities — are burdened by bond debt.
The arena must pay $39,136 toward debt this year, a cost that will climb to $52,433 in 2028. The pool will pay $25,433 toward the debt this year and $34,089 in the final year of the bond repayment plan.
Jeremy Winterstein, co-manager of the arena, said those payments consume about 10% of the arena’s annual revenue, which makes it difficult to make ends meet.
“We haven’t seen any savings from the Ameresco project, or very few,” Winterstein said. “I understand the commissioners were trying to do something good for the county as a whole then, and, as a taxpayer, I appreciate that.
“As someone who is managing a facility,” he said, “it’s a hindrance, and it hasn’t worked for us.”
The arena closed during the first wave of pandemic-related shutdowns in March and hasn’t reopened, though it has made some money renting space to a local manufacturer for storage.
Adrian said Northern Lights Arena-Community, has secured a $150,000 government loan and asked the county to match that amount, though no match was required for the loan.
Adrian and Commissioner Bill Peterson suggested taking $150,000 from the county’s Youth and Rec fund for the arena, without a vote of the board-appointed committee in charge of that fund. Some committee members said they’d resign if the board did so.
‘EXACTLY WHAT IT WAS SUPPOSED TO DO’
Not everyone thinks the bond project was a bad idea.
In fact, there’s a good chance Plaza Pool would be closed if the commissioners hadn’t hired Ameresco, said Norm Sommerfeld, owner of Synchronizations Management, which runs the pool for the county.
“The bond payment is hard on us and makes things rough,” he said. “When the project happened, however, there were so many things that needed to be done at the pool that we never would have been able to do. That project literally kept the pool going.”
The county has subsidized the pool, giving it $15,000 in 2017, $15,000 in 2018, and $25,000 last year.
Adrian was new to the board when it voted unanimously to hire Ameresco, and he was not involved in the energy audit and bargaining that went on beforehand.
VanWormer, the former commissioner, said the county at the time was constantly using large sums of general fund dollars for repairs to the aging boilers, heating and cooling units, and compressors on county buildings. VanWormer said the project needed to be done, and he doesn’t regret voting for it.
“We were at the point to where it was possible that we were going to have a lot of expensive things break, so this was a lot about budgetary issues we could have had,” he said. “Ameresco was the answer to that. It allowed us to get the latest and greatest upgrades in one swoop and pay for it over time. I think it has done exactly what it was supposed to do.”
‘A COMPLETE FAILURE’
But, according to some current county officials, the numbers say otherwise.
Today, the county is staring down a budget gap that exceeds $1 million, which will have to be covered by much of the $4 million the county has in savings.
Meanwhile, the county pays bond debt from its general fund each year.
This year, $38,635 will be taken. In 2028, the county will pay $51,762.
Commissioner Brenda Fournier said the Ameresco project has done harm to the county, pool, and the arena that will be difficult to reverse.
“I think it has been a complete failure, and now everybody is paying the price for it,” she said. “It has hurt the entire county tremendously, and the sad thing is, there is nothing we can do about it. If we could see something that showed us the project was working, maybe I would feel differently, but all I see is what it is costing everyone.”
Fournier’s husband, Gerald Fournier, was on the county board in 2013 and voted to hire Ameresco, but said he would vote differently if he could go back in time.
“Knowing what I know now, I would vote against it,” he said. “It was sold to us like a pie in the sky, and I don’t think we got what we were promised and paid for, and that’s too bad. That project has been a headache for a lot of people.”
Steve Schulwitz can be reached at 989-358-5689 at firstname.lastname@example.org. Follow him on Twitter @ss_alpenanews.com.
A look at the amount of money owned by each county entity, as of Jan.1, 2020, toward bond debt the county took on in 2013 to improve energy efficiency.
* Northern Lights Arena: $414,172
* Plaza Pool: $269,269
* Alpena County Regional Airport: $157,129
* County general fund: $408,870
Total: $1.3 million
Source: Alpena County