Colfax school board agrees to disagree on $2 million

By LeAnn R. Ralph

COLFAX — For the time being, the Colfax school board has agreed to disagree on certain aspects of the proposed energy efficiency project that could cost up to $2 million.

The Colfax Board of Education held a special meeting June 4 to vote on a resolution to borrow up to $2 million for the energy efficiency project and to discuss the scope of the project.

 “Most of the items were already on the list prior to me becoming superintendent,” said Bill Yingst, district administrator.

In addition to considering the resolution to borrow up to $2 million, the purpose of the special meeting, Yingst said, was to set a maximum dollar amount and to prioritize the projects.

Since the last school board meeting on May 20, Colfax has received notification from the state Department of Public Instruction that the school district is eligible for a Qualified Zone Academy Bond in the amount of $1 million that could be borrowed at zero percent interest or for a low interest rate of perhaps a half a percent, Yingst said.

The zero interest bonds are available to school districts with a student population of 35 percent or more that qualify for the free or reduced lunch program, Yingst said.

Although the QZAB bonds could be issued with a low interest rate of a half a percent, most of those that have already been approved for other school districts have been at zero percent, Yingst said.

“That’s very good news for the district … that’s the bulk of our project,” he said.

Revenue limit

Yingst also noted that the state law that allows school districts to borrow money for energy efficiency projects outside of the revenue limits and might not be around forever, and the opportunity for a zero percent bond might not always be available, either.

If the school district does not take advantage of those options now, the opportunity may be gone in the future, he said.

The Colfax school district has lost nearly $600,000 in state aid, and the proposed energy efficiency project is a way for the district to address maintenance and energy issues at a reasonable cost to the taxpayers, Yingst said.

The School District of Colfax currently has no debt at all.

The Colfax Board of Education narrowly approved the resolution for borrowing up to $2 million for energy efficiency projects on a vote of four “yes” to three “no.”

School board members Joel Hilson, Kenneth Neuburg, and Jodi Kiekhafer voted against the resolution.

Don Berge, school board president, and board members Michael Lee, Christie Hill, and Todd Kragness voted for the resolution.

Certifiable

All of the projects on the energy efficiency list have been recommended by H&H Energy Management, which is a consulting, engineering and construction energy management company out of Madison.

Only a few such energy-consulting companies exist in the United States, and H&H will certify the savings for the Colfax school district, Yingst said.

What that means is — if the Colfax school district does not save as much money as H&H has certified, the company would be obligated to write out a check to the school district to make up the difference.

Yingst pointed out that since the company must certify the savings, the amounts predicted by H&H Energy Management are on the low side and the actual savings will most likely be higher.

Savings  

If the Colfax school board approved all of the items recommended by H&H Energy Management, the school district would spend $2.6 million.

Yingst told the school board that he and the other administrators had reviewed the list and had come up with two options that included different items.

Option 1 would cost $1.8 million and would save $95,672 each year on operating and maintenance costs and would save $34,152 each year on utility costs — for a total savings of about $130,000 each year.

Option 2 would cost $1.6 million and would save $76,149 each year on operation and maintenance costs and would save $34,152 on energy costs — for a total savings of about $110,000 each year.

Both options would save 91,000 kilowatt hours of electricity each year and 16,000 therms of natural gas.

For a house that uses 900 kilowatt hours of electricity each month, the school district’s savings on electricity would power eight homes for a year.

Loans

According to information from the school district’s financial consultant, Brian Brewer of Robert W. Baird & Company, the interest on a $900,000 state trust fund loan for ten years at 2.75 percent interest would be $135,000, and the annual payment would be $103,000 the first year and $67,000 annually for the following years.

Borrowing $2 million for ten years at 2.75 percent interest would incur a total interest cost of $300,000 and would require a payment from the school district of $230,000 the first year and about $150,000 for each of the next nine years.

Both of the examples above are based on not using the district’s fund balance. If the school district used the fund balance, the payments for the first year would less: $67,000 on a $900,000 loan and $149,000 on a $2 million loan.

The savings on energy and operation and maintenance costs would be $130,000 annually for Option 1 and $110,000 annually for Option 2, but with no cost savings factored in for energy, operation and maintenance, and interest, a ten-year state trust fund loan for $900,000 would cost taxpayers $36 per $100,000 of property value the first year and would cost $23 per $100,000 in the following years.

The cost to taxpayers on $2 million with no energy, maintenance and operational, and interest savings factored in would be $80 per $100,000 of property value the first year and $52 in the following years.

With $1 million coming from zero percent bonds, the impact on the mill rate would be less, although no exact figures were available at the June 4 meeting.

Even if all of the money were borrowed from the state trust fund, the Colfax school district’s mill rate would still be the lowest mill rate among the school districts in this part of the state, Yingst noted.

Undecided

All together, Colfax Board of Education members spent more than two hours discussing the various options and line items but could not reach a consensus on which parts of the project should be completed.

The first four items on the list — two Compressed Natural Gas buses, wireless upgrades for Internet access, replacing the old univent heaters and fixing the roof — seemed to be a given because school board members did not discuss removing those items from the list.

The two CNG buses and associated infrastructure are expected to cost $257,000; the wireless upgrades are listed at $331,000; the heaters are listed at $138,000; and the roof is listed at $287,000.

The savings on energy and operation and maintenance on those four items would be about $50,000 per year.

Neuburg wondered about computer server updates when the original focus had been on wireless technology.

Three of the school district’s computer servers are nearly seven years old and one is only about a year old, said John Dachel, high school principal.

The expected lifespan of a computer server is five years.

The upgrade for a data center would replace the school district’s computer servers and would cost $141,000.

Three different options for different numbers of laptop computers would cost about $400,000 all together.

Updating the old pneumatic temperature controls to digital controls at the elementary and high school would cost $236,000.

Standardized testing

The school district will be required by the state to use computers for all standardized testing for students in grades 3 through 12, but the school district does not have enough of the necessary equipment for doing the standardized tests.

Kragness said the computer issues, such as the laptop computers and the data center, could be dealt with in the future.

“I’m not here for the bells and whistles,” he said.

Kiekhafer said she agreed with Kragness about the “bells and whistles”.

Neither of them offered a solution as to how the Colfax school district would conduct the required standardized testing without sufficient computer equipment to do it.

Next meeting

When it was clear that the school board members were not any closer to reaching an agreement on the projects, Berge suggested they spend time reviewing the information and continue the discussion at the next meeting.

The Colfax Board of Education meets next on June 17, beginning with a closed session at 5:30 for an expulsion hearing. The regular school board meeting will begin at 7 p.m.