Jan 042013

By Nick Worth
In a tough economic environment when the State of Arizona is not funding any capital improvement projects, the Snowflake Unified School District is seeking ways to save money on utility costs in order to put more money into the classrooms.
To this end, the district has entered into an “energy performance” contract with Midstate Energy in an attempt to save money on energy usage.
Superintendent Hollis Merrell said the district currently spends approximately $800,000 per year on utilities. The energy savings through the work to be done by Midstate are expected to be in the area of $125,000.
“The law requires them to guarantee savings in the district’s utility bills,” said Merrell, noting that if the guaranteed savings are not realized, then the law requires Midstate to pay the difference to the district.
Merrell said under the contract with Midstate, the money saved on utilities through the projects, pays for the projects.
“This provides a way for us to do some of these projects,” said Merrell. “We expect to actually save money and have some positive cashflow back into the district.”
The contract with Midstate calls for the company to begin with upgrading sensors for lighting, heating and cooling in the school buildings district-wide. The upgrades will also include a district-wide control system that will monitor usage, and adjust lights, heating and cooling accordingly.
“We’ll be replacing outdated units,” said Merrell. “It’s work that is very badly needed.”
Merrell said the upgrades will be financed by bonds issued by the district through the Qualified Zone Academy Bonds (QZABs) program. According to the U.S. Department of Education website, QZABs is a federal program that allows school districts with low-income populations to save on interest costs associated with financing school renovations and repairs, to include renovating and repairing buildings, and investing in equipment and up-to-date technology.
“It has no impact on taxes,” said Merrell. “It’s a program that allows us to sell bonds to finance the improvement projects.
“National Bank bought the bonds and there will be zero interest,” said Merrell. “We’re the only ones that received a zero percent rate.”
Work on the upgrade is scheduled to begin at the end of January.
“We anticipate it will be about a six-month project,” he said.
Although the upgrades will take a half-year, Merrell said it has been a long process to get to this point. He said many cuts have been made throughout the district over the past few years.
“We want to reduce operating costs so we don’t have to impact personnel,” Merrell said. “We’ve looked at every other way to cut our costs and thought we should look into our energy usage.”