Wiscasset selectmen are weighing several options to fund a long list of capital spending over the next few years, including the planned $1.7 million school energy project.

One idea the board discussed with department heads Monday was to borrow monies needed for capital projects and use interest earned from the capital reserve account to pay down the debt. Another was to stick with the board’s policy of withdrawing 3.5 percent from the investment portfolio managed by H.M. Payson of Portland. These monies are not raised through taxation.

Daniel M. Lay, H.M. Payson managing director, told selectmen Monday evening, at the end of February, the market value of the capital reserves, including endowments, was $13.5 million. If selectmen chose to adhere to their policy, they’d have $380,000 to $400,000 to work with in the 2017-18 budget.

“If you have capital needs, the money is there, spend it,” Lay said. The town has $6.8 million, almost 60 percent of its portfolio, in equity; 22.8 percent in fixed investments, at $3 million; and 17.46 percent in cash, $2.37 million.

“You’ve done very well over the last seven years averaging about seven percent interest gained,” Lay added, but he warned there was no guarantee this trend would continue. “It’s possible we may see downward movement in the market.” He told selectmen they had $1.8 million cash on hand to draw on.

Selectman Larry Gordon asked, “Rather than taking money out of the investment, wouldn’t it be more advantageous to borrow at two to three percent interest?”

Lay responded that interest rates on loans were about as low as they would go. Whether it was better to borrow depended on the amount and how long it was financed. “If you’re going to borrow, you had better do it soon because interest rates are expected to start rising,” he said.

Selectmen had mixed feelings on which option was best. The board will meet again at 5 p.m. Thursday night, March 16 at the municipal building regarding the 2017-18 budget draft.

Department heads were asked to pare their capital requests down to three items. The $1.5 million-plus total didn’t include requests from the transfer station superintendent and EMS director.

As discussed, if $1.8 million is taken from capital reserve, the town wouldn’t draw from it again for four years. Neither Gordon nor Selectman Ben Rines Jr. liked the idea.