AGENDA DATE: 8/9/2017
TITLE:
Title
Light-Emitting Diode (LED) Performance Contract
BODY
SUBJECT/PROPOSAL/REQUEST: Approve LED Performance Contract Financing
ITEM TYPE: Regular Action Item
STAFF CONTACT(S): Walker, Letteri, Kamptner, Burrell
PRESENTER (S): Doug Gebhardt, Financial Advisor, Davenport & Company
LEGAL REVIEW: Yes
REVIEWED BY: Douglas C. Walker
BACKGROUND: Following positive responses from administrators, teachers, and students to a light-emitting diode (LED) upgrade pilot in several schools, the School Division began investigating using an energy performance contract to upgrade lighting to improve the learning environment and save energy. As a first step to determining the project's feasibility, the School Board voted on January 28, 2016 to support the request for a Back-of-the-Envelope Audit for a division-wide LED lighting project. Subsequently, school staff worked with members of the Local Government and School Efficiency Committee to procure audits for School Division facilities through an Energy Service Company (ESCO).
An energy performance contract allows an ESCO to design and implement facility improvements while also guaranteeing the utility savings resulting from the projects. The debt service/loan repayment amount necessary to install LED lighting throughout the school system will be repaid from savings in the schools operating utility budget, thus it is expected to be cost-neutral for the life of the loan.
After procuring Back-of-the-Envelope audits, proposed projects with initial savings projections were received from four ESCOs. The firm, Ameresco, was selected and subsequently completed investment grade audits involving both energy and water use at all schools, as well as COB - McIntire, and COB - 5th Street at no cost. Ameresco has vast project experience across the country with similar projects, and in Virginia.
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