County school system may enter into energy performance contract

By Megan R. Harrell
Star Staff
mharrell@starhq.com

   Members of the Carter County School Board met with the County Education Committee yesterday evening to discuss the adoption of a performance contract with Johnson Controls. If adopted, the contract could result in the installation of energy efficient equipment for all Carter County Schools at no additional cost.
   Dallas Williams, Superintendent of Carter County Schools, and the board of education have been meeting with Johnson Controls for over a year attempting to come up with an energy performance contract. "This is not something that has just come up over night. We have been looking at different ways that the school system could get into an energy contract and Johnson Controls has presented several contracts to the school system that we have had reviewed legally," Williams said. "We have gone over it with a fine tooth comb and we have not come up with anything major that we can find wrong with it. As a board and superintendent we have finally come to an agreement on a contract that we feel pretty good about."
   Jeff Lyons, Account Executive with Johnson Controls, outlined the functions of a performance contract for members of the Education Committee. He discussed how county schools could benefit over a 15-year contract period by utilizing existing budgeted funds. "We will find money that is already being spent and re-appropriate it and use it for improvements," Lyons said. "The cost will be completely funded by the operational savings generated by the improvements."
   The negotiated contract is expected to shift the risk and debt to the contractor for facility improvements at county schools. Johnson Controls will perform the audit, design the projects, acquire and install equipment, and provide training for the school system.
   After an analysis of all Carter County schools, Johnson Controls has pinpointed mechanical systems, lighting, and temperature control as three areas where money can be saved. After 15 years, the performance contract calls for a net increase of $1.3 million that will go back into the system after it pays for itself. Johnson Controls is offering the school system a guaranteed savings of $360,000 per year with a two percent escalation for each of the 15 years in the contract.
   City of Elizabethton Schools, Mountain States Health Alliance, and Cloudland Elementary are some of Johnson Controls' local clients. Supt. Williams stated that the Carter County School Board has made contact with other school systems in the area that have entered into a performance contract with the Fortune 150 company.
   The school board wanted members of the Education Committee to be educated on the performance contract as the County Commission will have to approve a $3.2 million lease needed to initiate the energy projects. The lease will be paid off with the funds already allocated in the budget over 15 years, therefore the school system will not sustain any additional cost for the services.
   Board members were careful to note that the money used for the performance contract cannot be utilized to solve other budget woes. "Whether we do this or whether we do not do it has no bearing on teacher raises. If we do this or not does not depend on if we get money out of Nashville and the budget crisis is resolved either," said Richard Winters, Chairman of the Carter County Board of Education. "I am as much in favor as anybody can be to get the teachers a raise. It is a different question though. This is money that has got to be spent on the maintenance of the buildings."
   Board members believe the performance contract with Johnson Controls will help offset some of the cost of repairs that will need to be made in the future. "If we spend it with this company there is guaranteed expenditures of doing the improvements over a period of time and they have the money and the expertise," Winters said. "We can do it that way or we can wait until these things start going to pot and have to be improved and we still have to spend the money. So it is not at all the same question as raising money for salaries."
   The Education Committee will decide on its recommendation of the performance contract after the school board votes on its approval. The Education Committee advised the Carter County School Board to meet with the Finance Committee to gain its recommendation so both committees can go before the County Commission simultaneously. Both committees are expected to give their recommendations to the County Commission on June 24.