Numbed by sticker shock, officials with Madison County are eyeing ways to shave off an annual schools utility bill that totals nearly a half a million dollars.
The Madison County Board of Supervisors and School Board met jointly Jan. 25 to hash out energy usage concerns and other matters.
Energy Systems Group rep Patrick Pettit told the Madison officials that by replacing lightbulbs and the chiller and boiler, installing sensory lights, low-flush toilets, a new control system, insulation in roofs and other tricks of the trade he can save the county 25-30 percent on its utility bill.
Pettit went into detail as to what is called performance contracting -- instead of the standard design/bid/build where you take the lowest bid.
Performance contracting is a project approach whereby the energy savings realized pay for the upgrades. In performance contracting, the county could choose the equipment, have an on-site project manager and a single contact for the project.
One thing he said repeatedly is the savings are guaranteed. If they say they will save the county $100,000 on its utility bill and the savings actually only comes to $95,000, his company will then write the county a check for the $5,000 difference.
“It comes with a guarantee. There are not many guarantees in life, but there is a guarantee with performance contracting. What is guaranteed are the savings, the scope and the price,” Pettit, the company’s business development manager, said.
He said performance contracting would suit Madison County’s needs because it has aging buildings, humidity issues and too many demands on maintenance workers.
Energy Systems Group is owned by Vectren Corporation, a Midwestern company out of Evansville, Ind.
“It’s a long-term partnership. If you enter into an agreement, it’s 10 years, 12 years, 15 years. Unlike design/bid/build where after the warranty period of a year you won’t see them,” Pettit said. “It’s a marriage if you will.”
Supervisors and school board members asked about a dozen questions about the nature of performance contracting and how they could save money.
Supervisor Jerry Butler asked about similar companies offering the same performance contracting specialty.
“How do we know your company is the best?” Butler asked.
Pettit said there are 16 companies in Virginia that offer a similar program and the county is only required to interview four companies.
Butler wanted to know about the financial risk and asked, “What percentage of the contract is set aside as contingency for the contract?”
Pettit said it varies depending on the complexity of the project.
School board member Martin Boone wanted to know about the financial process and how it was structured.
Pettit said they have on staff financial gurus whose sole job it is to shop the best rates.
Boone also asked if there were any times when the cost savings were not enough to justify the project. Pettit said that has happened and there is no charge for walking away from a project once that is determined.
Supervisor Jonathon Weakley wanted some other examples of how they can save on their energy bills.
Pettit said sensors are huge. “To teach behavior modification is tough. It lasts for maybe a week or two. You know, ‘Guys turn off the lights.’ If you put sensors in there, when you walk out after 15 or 30 seconds the lights go off.” He also said insulation in the roof is one way to gain savings because it seals the building better. He said without the insulation is “like blowing up a balloon with holes in it.”
County officials are still considering whether or not to hire Pettit’s firm.
In other matters at their Jan. 25 joint meeting, supervisors and school board members:
*Discussed the $775,000 in federal money that reportedly “has” to be used “for personnel,” meaning school employee salaries. Superintendent Matt Eberhardt requested the school board adjust the budget to reflect a portion of that pot of federal money, $225,000 to be exact, for fiscal year 2011-2012. He said he’d move $200,000 to fiscal year 2012-2013. The school board already approved $150,000 for bonuses for all full-time employees. He said he anticipates as a result of the financial planning returning $200,000 of the leftover money to the county’s fund balance. The school district avoids having a public hearing on how to spend the additional $425,000 because it is broken up over two years and is less than one percent of the total budget for each year.
*Discussed the capital improvement plan for the schools. The heating, ventilation and air-conditioning replacement, as well electrical work for Madison County High School, Wetsel Middle School and Madison Primary School would cost $5.9 million. It would cost $2.5 million for the high school, $2.4 million for the middle school and $1 million for the primary school. To replace the roofs at the three schools it would cost $1.6 million. It would cost $500,000 for the high school, $600,000 for the middle school and $500,000 for the primary school.
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