How Energy Savings Performance Contracts Can Stretch School Districts’ Budgets (and Fund Healthier Classrooms)
An interview with Superintendent Anibal Soler Reveals How Energy Performance Contracts (EPCs) have Helped Batavia City and Schenectady City Schools Fund Critical Capital Improvements
By Kendra McQuilton, Chief Executive Officer of Energia
Fiscal responsibility is one of the most important aspects of a school district superintendent’s job. But if the mandate is to simultaneously deliver an excellent education for the next generation (all on the taxpayer’s dime), they have to look for innovative ways to do so.
“As a superintendent, you’re responsible to find ways to stretch your dollars,” says Schenectady City School Superintendent Anibal Soler about working with Energia to fund capital projects in his former district, Batavia City Schools, with an Energy Savings Performance Contract (ESPC).
“To find efficiencies or ways you can recoup funds … one you don’t typically look at is things like energy performance contracts — unless you encounter somebody who can help guide you along in that process,” he adds.
School district superintendents need to stretch their budgets like never before. Energy Savings Performance Contracts (ESPCs) can help make that happen.
On a recent episode of the EnergiaSaves podcast, I spoke with Anibal about how ESPCs can transform educational opportunities for students by making safer, healthier facilities a reality for school districts of all kinds.
ESPCs are powerful financing tools municipalities and school districts can use to fund large improvement projects with money saved as a result of better energy efficiency (and lower operating expenses).
For Anibal, that meant stretching Batavia’s $52 million budget as far as possible so more money could go toward classrooms, programs, staffing and innovation.
ESPCs are financial tools that can help fund capital projects with money saved from better energy efficiency and lower operating expenses.
“The fact that you could also do creative things like improving your lighting and your heating and cooling system while not impacting taxpayers was also important,” he adds. “Sometimes through building condition surveys, these things get identified, and you’re trying to figure out how to do these things without having a major capital project.”
Responsibility and Accountability
Often, busy superintendents delegate these kinds of projects to facilities directors or even business administrators in their districts. But Anibal urges his colleagues at the superintendent level to steer ESPC projects themselves.
“One thing I learned early on as a superintendent and even as a principal is you can delegate responsibility, but you can never delegate accountability.”
Energy performance contracts are high-dollar commitments with long repayment periods and a number of expected outcomes. So it’s crucial for the executive of a district to know them inside and out. After all, school board members (and taxpayers) won’t go back to the district CFO if they have questions about how the contract affects classroom conditions or want reports on cost savings.
So even if Anibal delegates aspects of a project to school cabinet members and solicits their input, Anibal believes in taking ownership of these kinds of decisions.
“You definitely need to stay connected as a superintendent, because you’ve got to see the project … through. And be able to speak to it in public settings — understand what the investment was, and more importantly, be able to speak to the savings, speak to the outcomes and speak to how you’re going to use, hopefully … those savings for other things in the budget.”
Plus, school boards look to their superintendents to bring these kinds of ideas to the table. The energy savings, while significant, are perhaps secondary to improved classrooms, better breathing, better lighting and other improvements these savings make possible. And those are the things superintendents and boards care about most.
Playing the Long Game
When Anibal came to Schenectady, he inherited a performance contract in the construction phase (at that point in time) that Energia oversaw as well. Now that the project is complete, he can see how the ESPC benefits this district, too.
“We needed to do some of these upgrades … and there was a way to do it efficiently. For us … the total cost of ownership, or the total cost of the investment, was the biggest thing.”
That meant Schenectady schools could use ESPCs for capital improvement projects while federal funds could be allocated elsewhere. With funding from the ESPC, the district replaced the water heater at the high school, which itself provided significant energy savings. The district also installed central controllers for all its light switches, which allow facilities to better manage electrical systems.
At Batavia City Schools and Schenectady City Schools, both in the state of New York, ESPCs have empowered the districts to improve lighting, heating and air quality while freeing up other funds for short-term needs.
“This is kind of a long game,” Anibal says. “When you do these kinds of things you don’t always necessarily see [savings] the first year. But as it compounds, we’re going to start to see more and more of a greater benefit … It’s really a proactive approach.”
This article is based on an episode of the EnergiaSaves Podcast, a podcast about how you can turn school district energy liabilities into educational assets. Don’t miss out on future episodes — subscribe to our YouTube channel for more best practices in energy finance solutions.
Energia believes that energy savings projects should result in actual savings. That’s why we work so hard to protect the school districts we work with from irregularities and cost overruns in Energy Savings Performance Contracts. To learn more, visit www.energiasaves.com.