The Lac du Flambeau Public School Board members this past week authorized district superintendent Larry Ouimette to sign an energy performance contract with the Madison office of Johnson Controls.
At last week’s meeting, Ouimette reviewed the issue with the board.
“When we went through last year, Johnson Controls was looking at a lot of the things that were starting to break down in our building and we were looking at having Johnson Controls come in and do an inventory or survey of the possibility of an energy performance contract,” he said.
The purpose for the energy performance contract, Ouimette said, would be to allow the district to go outside the revenue limits to raise the funding for items such as a new main boiler, which would require having a section of the roof over the current boiler removed so the boiler could be replaced.
Other items identified, he told the board, are 13 of 23 rooftop condensers for the building’s air conditioning system and other components to the heating and air conditioning system to improve airflow and circulation in those systems. A lighting system upgrade had also been initially identified but was dropped from Ouimette’s presentation.
Ouimette said one of the things being looked at when the process started was to take into consideration items in the nearly 20-year old building that might start to break down, costing money, and having to take money out of the district’s general fund budget to pay to repair or replace.
He said he broke the list of items down further, coming up with a list that he thought at first could be taken care of on a “pay as you go” status.
“Let’s take care of some things one year, address some things the second year and the third year and the fourth year,” he said. “I tried to break it down that way.”
He made the point that in the next year, the school debt will be paid off after a payment this year of $560,000 and next year of around $300,000.
“After that, our referendum debt is gone,” Ouimette told the board.
Getting back to addressing certain items one year and another set the next, he said the problem is the risk involved as other items could break down.
“The other thing is, according to Johnson Controls, when they put this all together, if they’re going to do the rooftop condensing units, they may as well do the boiler upgrade as well,” Ouimette said.
He said cranes that would be used to replace the rooftop condensers would be used to lift the old boiler out and install the new boiler.
Included in the price, he said, would be the removal and replacement of the section of the building’s roof for that part of the project.
“The cost is less by packaging it all together and doing it all at the same time,” he said. “It becomes more when you separate it out.”
Then, he said, came the obvious question of how all of this, including the main boiler replacement, the replacement of about half of the building’s air conditioning condensers and an upgrade to the heating and air conditioning system with the goal of making it more efficient, could be done without taking away funding for things like staffing and salaries and school supplies.
“We could get all this done by borrowing the money,” Ouimette said.
He then presented the board with three options regarding a loan for the work as he proposed.
“What we’re looking at is I want to borrow $1 million to take care of the cost of the things I’ve put in the recommended areas,” he said.
The option he recommended to the board was general obligation promissory notes paid back over the course of 10 years. The total interest would be $106,855.
Ouimette said there were some discrepancies that needed to be worked out with Johnson Controls but otherwise he was seeking the board’s approval and authority to pursue an energy performance contract with Johnson Controls.
He said if the board approved his request, it could then pass a resolution in January to borrow the money.
“By Feb. 2, we’d have the money in our account and could start making payments right away that Johnson Controls has in the pay schedule,“ he said. “The rest of the money could sit there and earn interest for us until the work could be done.”
Ouimette said the estimated completion date would be the fall of 2013 and he reiterated the fact that after next year, with the referendum debt paid and that annual payment of $560,000 reduced to around $110,000 a year over 10 years, that will help the taxpayer as well.
The key to everything, though, is the energy performance contract.
“With the current law, in order to exceed the revenue limit, you have to have evidence that you’re saving energy with the things you’re doing,” he said.
The school board voted to give Ouimette the authorization to enter into the contract with Johnson Controls and move forward with an energy performance contract contingent upon the discrepancies Ouimette mentioned being worked out.
Board president Mike Zimmerman said he wanted it known that the cost for this project would save taxpayers money.
“It’s going to save them money in the long run by taking care of things instead of having them fall apart piece by piece,” he said.
“The reason you do the energy performance contract is that it pays for itself,” Ouimette said. “You put the money in and it pays for itself with the energy savings.”
Asked why this didn’t go to referendum, Ouimette said a school district may borrow up to $1 million without having the issue go to referendum.
He said the loan is not a “done deal” but it’s likely the school board will choose to borrow the money and pay it back over time.
On another item, the board voted to approve the hiring of another special education paraprofessional.
Funding for the long-term position with no benefits comes from Medicaid reimbursements to the district.
Board members also recognized students of the month for October.
• Jerome Thoms, fifth grade.
• Raven Carufel, sixth grade.
• Maxwell Barber, seventh grade.
• Rita Christensen, eighth grade.
Brian Jopek may be reached at firstname.lastname@example.org.