Council pushes back against Gary energy deal

A proposed agreement with a municipal contractor aimed at saving the city of Gary millions of dollars in energy costs has stalled as members of the city council voiced their frustrations with the way in which city leadership handled the development of the deal.

At the Gary Common Council’s meeting on Tuesday, members of the body voted down a resolution approving and ratifying the selection of Leopardo Energy, LLC for a guaranteed energy savings contract (GESC) with the city. A separate ordinance authorizing the financing of the deal was tabled.

Indiana law allows a municipal government to enter an agreement with a provider who guarantees a certain dollar amount of energy savings for a building or buildings, with the provider required to provide reimbursement in the event that savings don’t materialize. Leopardo’s proposal for Gary, which company staff outlined at a Nov. 28 meeting of the city council’s Ways and Means Committee, involves improvements to outdated and failing infrastructure in the city, saving the city substantial sums on energy and maintenance costs.

Leopardo identified three different potential scenarios for investment with different points of emphasis. Potential areas of investment include replacing incandescent street light bulbs with more energy-efficient LEDs, updating the aging HVAC system at Gary City Hall, repairing the roof of the Hudson Campbell Sports and Fitness Center, and installing a ventilation system in the General Services facility on Madison Street.

Leopardo guarantees that the city will save roughly $23 million as a result of its investments, with the exact result varying by scenario.

The company further projects that the deal would create between 131 and 144 new jobs and generate between $379,000 and $414,000 in local and state taxes in the Gary area. It projects the creation of between 50 and 58 jobs and the generation of between $143,000 and $167,000 in state and local taxes in Gary alone. The city of Hammond has a similar deal in place with Leopardo already.

The Gary Common Council’s funding ordinance — tabled with a unanimous vote after a motion by Council President Tai Adkins, D-4th — would authorize the city to invest up to $13 million in infrastructure improvements over 20 years under the plan.

The resolution approving the contract failed in a 5-2 vote. Councilman Ron Brewer, D-At Large, was joined by Councilman David Fossett, D-2nd, in voting ‘yes’. Councilman Mark Spencer, D-At Large, abstained, and the remaining five members at the meeting voted no. (Councilwoman Linda Barnes-Caldwell was absent.)

Much of the council members’ concern over the deal stems from the fact that the administration of Gary Mayor Jerome Prince began talks with Leopardo over the GESC long before the council was informed of the potential deal. The company and the administration began work on the deal in late 2021. The council was only informed of the proposal earlier this year, Brewer said. Indiana Code 36-1-12.5, which establishes the process through which government entities can enter a GESC, designates the legislative body of a municipality as the entity responsible for entering such an agreement.

Though Brewer sponsored the resolution and supported approving the deal with Leopardo, he said that the conflict over the legislation stems from “a lack of communication between the administration and the council.”

“It’s the same old, same old, same old,” he said.

Councilwoman Lori Latham, D-1st, who voted against the ordinance, said she was “very impressed” by Leopardo’s proposal but wants the city to “start off with a new process where, just like the state statute indicates, it originates with the council.”

She added that she wants to ensure that the city’s request for proposal “was issued broadly enough.”

Brewer said that he does not expect the council will revisit the issue until January, after Mayor-Elect Eddie Melton takes office.

“It gives (Melton) some time to wrap his hands around it,” he said, “and see if this is good for the city or if it’s not.”

Spencer, who joined the council in October after being selected to fill a vacant seat in a caucus, said that his decision to abstain was motivated by a desire for more information.

“I think the concept is an excellent one,” he told the Post-Tribune. “I was not comfortable with rendering a decision at that time. I wanted to research even more.”

Prince administration spokesman Michael Gonzalez declined to comment. Leopardo Energy Solutions did not return a request for comment, nor did council president Tai Adkins, D-4th, who voted against the resolution.