Racine Unified Could Spend $45 Million for Energy Upgrades
The School Board will negotiate energy service contracts with Trane and Johnson Controls. The contracts carry a potential price tag of $45 million for a variety of energy efficiency upgrades... but the plan is to pay for the projects with energy savings.
The upgrades would likely be several smalle projects that could cost a total of $45 million, said RUSD Chief Financial Officer David Hazen. The district would borrow money to pay for the projects, and use energy and operational savings to pay off the bond.
“So that the board doesn’t get nervous about that, every step of the way the board will be involved,” Hazen said.
The action taken Tuesday night allows staff to enter into contracts with the two companies, but specific projects will still need board approval. State law allows school districts to spend over their revenue caps to make physical plant upgrades, Hazen said, provided the projects will not place an "undue burden on the taxpayer."
“The idea is that it’ll be paid for with operational and energy savings,” Hazen said.
Bryan Arnold, the new director of buildings and grounds for Racine Unified, said the vendors, Trane and Johnson Controls, are more than capable and are good partners.
“We sent them a list of 10 or 12 questions that were specific enough to answer specific things – what they would to do partner with us, their recommendations for bonding and what their overall approach would be,” Arnold said.
Among the potential projects are: lighting upgrades, roofing and replacing windows. Susan Kutz, a school board member, asked if their attorneys would review the contracts and asked if staff understood what the liability of the contract would be.
If the board decides not to move forward with the projects, the district would still be responsible for paying engineering fees incurred when the companies put together the contract.
To pay for the projects, the district will borrow money outside the revenue cap, something allowed under a new state law. The law also requires the district show there's a payback for making the upgrades. The district expects energy savings from the project to cover the payments for the $45 million bond.
“(Johnson Controls and Trane) basically need to guarantee that (the savings) is going to happen; it’s part of the negotiations,” Hazen said. “Just because we have the authority, doesn’t mean we are going to borrow the money. The Board still has to make that decision so it comes in steps.”