“I think there’s too many unanswered questions,” said board member Robin Wright, during a special board meeting Monday night at Woodland Regional High School.
The board has been discussing whether to buyout of its contract with Energy Education for the past few months. On Monday, those discussions came to a head as too many uncertainties surfaced when the board tried to the find the necessary $207,900 — a higher figure than originally thought — in the budget to buyout of the contract this year.
“Personally, I would like to see that contract go,” said board member Nazih Noujaim, who added though he was concerned about how the board was going to come up with the money to buyout.
The consensus of the board members present Monday echoed Noujam’s sentiments.
The Texas-based Energy Education is an energy conservation company that trains its clients to implement behavioral and organizational changes in order to reduce energy consumption. In February 2011, the board unanimously approved a five-year deal with Energy Education.
As part of the deal the board pays Energy Education a fee of $118,000 a year for the first four years of the deal and nothing the fifth year. The board is also paying a stipend of about $20,000 for a part-time energy education specialist to oversee the program in the district and bought energy accounting software to calculate the energy savings. The software factors in variables such as the weather when calculating savings and cost nearly $14,000 the first year, then nearly $2,100 a year after to run, according to figures presented by company officials last year.
The thought behind the program is the district will save enough money by following the company’s training to cover the cost of the program and realize net financial savings. According to the company’s figures presented last year, the company projected the district would have a net savings of $3.08 million over a 10-year period by following the program.
The first year of the contract failed to meet expectations.
According to figures presented earlier this year, the district saved, or avoided, $161,000 in energy costs from May 2011 to April 2012. The program’s costs were roughly $154,000 — netting the board a savings of about $7,000 over that time.
The board felt Energy Education underperformed during the first year and openly expressed concerns about how the savings were calculated.
As part of the terms of the contract, the company has to reimburse the district if the savings do not exceed the money spent on the program in any given year. The fact that the savings in the first year just barely outpaced the district’s costs raised suspicions among board members.
Board members also felt that some of the savings could be attributed to measures taken by David Langdon, who was recently hired as director of facilities and maintenance supervisor for the district, not Energy Education.
As the discussion progressed over the past few months, it turned to how much it would cost the buyout of the deal. Last month, it was thought the buyout would be a one-time fee of $148,000 but it turned out it would cost more.
On top of the termination fee, the board would also have to pay $59,400 in deferred fees to the company for a total of $207,900 to buyout.
This year’s budget includes $118,000 for the company’s fee. Not counting the energy specialist’s stipend, the number the board was working to find in the budget Monday night to buyout was roughly $90,000.
However, a number of budgetary variables made finding the funds an uncertain task.
Interim Business Manager William Stowell said the board will have to pay a $160,000 interest payment on a bond this year that was mistakenly left out of the budget. He added a new special education student, who will have to be out placed to a special school, recently moved into the district as well.
There are some anticipated savings from the hiring of younger, cheaper teachers, Stowell said. Also, he said, the board’s medical insurance came in with no increase this year for a budgetary savings of $120,000.
The savings are offset by the costs of the interest payment and paying to place the new special education student.
“We really don’t have anything,” Stowell said.
With the questions surrounding where the money would come from, the board backed off from buying out of the contract.
“There’s too many questions out there,” board member Sheryl Feducia said.
Noujaim felt the board should explore factoring in the buyout in next year’s budget. The one-time buyout fee drops to $118,000 next year, according to Stowell.
Not everyone on the board is ready to give up on the contract yet.
Board member Robert Hiscox, who was absent Monday, said at the board’s regular meeting last week the issue is one of communications and the board needs to work further with Energy Education to clarify the responsibilities of the company and the board.
“I don’t think they did as well as they should have, and I don’t think we did as well as we should have,” said Hiscox, who felt buying out at this point would be a costly mistake for the district.
In the interest of better communications, Superintendent of Schools Tim James drew up a list of measurable goals to help keep the program on track.