Schools' energy savings hits snag
Published 10:57 pm, Monday, August 31, 2009
A novel approach hailed as a way to save the New Milford school district on energy costs without costing taxpayers any more money has hit a legal snag.
Yet several town and school leaders think the proposal still has merit and want to find a way to make it happen.
"I'm going to find a way to make it work,'' declared John Turk, the school district's director of fiscal services.
School leaders recently endorsed hiring Siemens Building Technologies to install $3.7 million worth of energy-efficient equipment, including boilers, in four of its schools over the summer.
To pay for the equipment, Siemens proposed a municipal lease/purchase contract such that the town would arrange with a bank to provide up front costs and the district would pay back the money over 20 years through guaranteed energy cost savings.
Siemens guaranteed a savings of $235,000 annually; if the savings did not reach that amount, Siemens would reimburse the district for the difference.
The Siemens program, called a performance contract, is one endorsed by the Connecticut Conference of Municipalities. Siemens was selected as the project provider for CCM's members through an extensive bidding process.
The school board needed town council approval to finance the project as proposed. The council last month had questions about the legality of such an arrangement, and so delayed making a decision until the matter could be researched by the town attorney.
At Monday's meeting night, Town Attorney Randy DiBella said he does not believe this program as proposed would meet the town's bidding or "pay as you go'' financing protocols.
Turk said he is disappointed with Mr. DiBella's finding but respects his expertise and believes there are ways to go forward with this type of energy program without violating the town's bidding or financing requirements.
"I'm counting on it,'' Mr. Turk said.
Even though he has no quarrel with CCM's bidding process, or Siemen's qualifications, Mr. DiBella advised that to offer this program, the town must select its own qualified bidder.
As for the financing of equipment, the town attorney said he does not believe permanent improvements to the schools can be considered a lease. Mr. DiBella's opinion is any equipment purchase must be paid for through the town's traditional long-term debt financing. That would require town voter approval.
If town and school leaders wish to pursue this type of program, he said he will work with them to assure proper procedures are met.
After about an hour of debate, with most council members favoring the idea but concerned about the legalities, no action was taken.