District Energy Manager Leaving the Nest? Or Feathering It?

We found this article in the STAR quite interesting.

Alders vote to draft a contract for energy manager position. Alders voted 4-1 to move forward with drafting a contract for an energy manager position, which will be brought back to the committee for approval at a later date. Freund was the only alder who voted against drafting a contract.

Gregory Klaas, energy manager for the Sun Prairie Area School District for four years, recently submitted a proposal for the energy manager position. Klaas asked for $12,000 plus 60 percent of cost savings over the initial $12,000. Klaas said he saved the district more than $2.6 million over those four years.

District 1 Alder Hariah Hutkowski said trying to save utility costs “has gone beyond turning off light switches and installing automatic turn-on devices.” Alders raised concerns about the lack of a cap on the amount of cost savings a energy manager could earn through savings.

“I can’t support anything that doesn’t have an upper limit in terms of payment on this,” Freund said. “I think we need to take a look at where is our utility bills.”  “The upper limit is pragmatics - the money is coming out of savings that we would have spent had we not done something,” Hutkowski responded. “There is no risk, we’re saving 40 percent over a certain amount.”

--- STAR 8-26-10 (middle of the article "other Action: Alders vote to draft a contract for energy manager position")

So many, many questions!
Would our energy manager leave the nest if his proposal is accepted?
  ...or would he plan on working both for the district and the city?
  ...and if so, would the level of service we get suffer?
Didn't we just spend time and money doing a follow-up review of his 
hourly rate?
Would we even replace the position if he left?
Would the city of Sun Prairie actually consider such a contract? (if SPASD had entered into a similar contract, we would have paid over $1.3M in "bonus" alone.  Not even the $100K club come close to that level of compensation!


...and these are just a few we have.  We're betting you, community members, have others.

Scratch One Off the List

The lowest hanging fruit just moved a lot higher up the tree. It sure looks plump and juicy, but it wont be pluckable. We will all have to just sit here and salivate. Much like the "poison pill" the Jets put in the Brett Favre contract last year (making it impossible to trade him to the ViQueens), EEI put a heckuva poison pill in the contract our beloved school board approved back in December 2005 (on a 4-2-1 vote, with Jim Gibbs and Caren Diedrich voting NO).

Board member Al Slane, and chair of the FTT, recently blew the dust off the contract after all the hub was recently bubbed. It seems that the contract states that if the district terminates the contract at anytime in the 4th year (into which we are halfway), the "termination fee" is $86,400. Since we only owe about 6 payments of $9,000/month ($54,000), it costs more to cut it than to keep it!

Things that make you go "hmmm":
(1) Why does someone put a contract termination fee equal to about 80% of the annual fee into a contract? Who does that?
(2) Who would enter into such an agreement? Isn't the termination fee like a some giant red herring that leaps up, tail-smacks you in the face, and says " By the end of year 1, you guys are gonna figure out that you could have done this on your own for free. We still want our $432,000, though, so it is what it is."

By the way (which happens to be a fine new tune from Theory of a Deadman), David Stackhouse is the only remaining boardmember who actually voted on this contract. Let's make that little factoid, Things that Make You Go "Hmmm" number (3).

So...nevermind, folks, we stand corrected. We are stuck with the energy management contract.

Just to make the record clear, with all the buildings we now have and the cost of energy, SP-EYE believes hiring an Energy Manager was a good decision. We think Greg Klaas has done a fine job of educating district staff on how much money can be saved --or should we say "costs avoided"---if the staff work collectively on strict adherence to some common sense practices. While many facets of the energy conservation program may seem like "no-brainers", it's often easier said than done when dealing with 11 school buildings and over 800 staff.

We appreciate Al Slane making the effort to look into this rather than blowing us off as has been done for the past 3 years.

N

SP School Board: Let's spend MORE money!!!!!

The school board is looking to enter into an "energy performance contract". This will be in addition to the 4-year contract already in effect for $9000 per month to Energy Education Inc.


A man who was introduced only as "Chuck McGinnis" made a presentation to the School Board's FTT Committee on November 12, 2007. It was interesting to note that Mr. McGinnis never mentioned who he represented. Even his slide presentation contained only his name. Thanks to my good buddy, Yahoo, however, one can quickly discern that Mr. McGinnis works for none other than Johnson Controls. Yes, the very same Johnson Controls that is the employer of School Board member Jim Carrel. To his credit, Mr. Carrel left the meeting during McGinnis' presentation, and no action was taken by the FTT Committee. It is, however, yet another one of those things that makes you scratch your head and ask...who brought this forward as an agenda item? And, why didn't Mr. McGinnis indicate that he worked for and represented Johnson Controls?



What does our $108,000 per year to E2I buy us? Pretty much:

• They required us to hire an "Energy Manager" at about $50K per year+ benefits.
• They tell us that we should turn off lights to save money.
• They tell us to lower our thermostats in the winter and raise them in the summer.
• They tell us to reduce heating and cooling to unused areas.

WOW! I'm definitely in the wrong line of work! If they can charge over $100K per year to a school district...hell, I'll give the same advice for , say, $75K. Nice!

So, now what is an Energy Performance Contract (EPC)? It's a contract for "comprehensive energy efficiency improvements". Entering into an Energy Performance Contract MAY indeed make sense financially for the district. We are concerned however, that such decisions usually come in hindsight, rather than foresight. Sure we could save more money through loan programs and getting professional assitance in terms of what equipment to purchase. But on the other hand, an EPC would cover many of the things the E2I contract already covers, which makes our spending $9000/month (under a binding contract for 2 more years!) seem like a less than stellar move. Why weren't we considering an EPC back then???? And why did we hire an Energy Manager and , recently, an HVAC technician if these folks aren't capable of providing knowledgeable advice on purchasing decisions such as "green" lighting or "on-demand" hot water system vs. hot water heater.

For more about Energy Performance Contracting

• http://www.energyservicescoalition.org/resources/index.html



• http://asbointl.org/ASBO/files/CCPAGECONTENT/docfilename/0000003168/Performance_Contracting_in_K-12_Schools.pdf


• http://www.eere.energy.gov/buildings/info/plan/financing/contracts.html