Capital One to finance school’s performance contract
To finance the energy performance contract with Johnson Controls, the Board of Education signed an agreement with Capital One Public Funding LLC Tuesday enabling the district to receive tax-exempt financing not to exceed $1.007 million for cost of energy conservation measures to be implemented under a performance contract. Capital One Public Funding LLC submitted a proposal to provide the financing at an interest rate of 2.85 percent over a term of 15 years. The principal amount will bear interest and mature with the equipment lease.
Superintendent Leonard Skuggevik, Business Manager Timothy Laube , Board of Education President Thomas Graffagnino and Vice President Linda Eklund are each authorized to enter into lease purchase agreements with the advice of counsel as deemed necessary.
The school district’s obligations under the equipment lease are subject to an annual appropriation or renewal by the Board of Education.
Under its agreement with Johnson Controls, the performance contractor will provide improvements to the building guaranteed to save as much or more in energy costs over the life of the project as it costs the district to pay for the equipment and construction.
It’s a bet performance contractors make on projects, with the proviso that Johnson Controls, not the school district, would be responsible if there were any cost overruns.
In entering into the agreement with Johnson Controls, one of the major performance contractors in the business that has tackled similar projects for neighboring school districts, the effort is to respond to energy savings that provide fiscal savings to the district over at least the next 25 years, Mr. Graffagnino said.
When previous building projects planned several years were launched, there wasn’t the same attention to energy savings that’s so critical today, he said.
The vote was 4-0 with members Susan Binder, Alfred Brigham Sr. and Elizabeth Melichar absent from what was a mid-day meeting.
