By Mike Duman

Last Thursday, the Suffolk City School Board voted on a motion to advance the implementation of an energy performance contract. The motion was defeated by a vote of 4-3.

Energy performance contracting is a state-supported program administered by the Department of Mines, Minerals and Energy. This program guarantees that certain equipment upgrades and replacement costs will be paid totally with energy savings. This program was successfully implemented by the Western Tidewater Regional Jail in 2016. The jail was able to fund $4.6 million dollars of needed repairs and upgrades with all the debt service paid by energy and water consumption savings. Through 2017, government agencies in the Commonwealth of Virginia have completed more than $860 million dollars in projects under the purview of this program.

As a member of the board of directors at the jail, I was involved in the process, and the knowledge I gained encouraged me to suggest this cost saving program to the City-School Advisory Committee on Collaborative Fiscal Concerns, of which I was also a member. That occurred in November 2014. After numerous discussions and a presentation by Charlie Barksdale, contracting manager with the Department of Mines, Minerals and Energy, the committee sent correspondence to the city and the school board for their consideration of energy performance contracting.

There were at least three presentations to the School Board, as well as, private discussions with Trane, the selected vendor. On Feb. 11, 2016, a resolution was passed by the School Board to enter into a contract with Trane. Subsequently, on March 12, 2016, a contract was signed that included the provision of a $275,000 fee if the school system did not consummate the project.

A proposal in excess of $16 million was originally proposed but deemed to be too rich. It was recommended by the city’s financial advisor that a contract amount between $8 million and $9 million dollars would be fiscally responsible and adhere to city financial policy.

The school system failed to engage Trane, and the fee of $275,000 became due. The school system requested that the obligation be paid by using city funds. City Council passed a resolution to satisfy this debt for the school system by a vote of 7-1.

On Dec. 28, I contacted the Department of Mines, Minerals and Energy and was informed that an extension of the contract expiration time would be granted. I then proceeded to contact Trane. Trane agreed to proceed within the scope of the original contract and most notably agreed to credit the $275,000 that had been paid if a new contract was negotiated.

A new contract was presented in March in the amount of $8.1 million. The contract also included a $275,000 credit, no additional tax dollars and a projected positive cash flow of $1.8 million. The contract addressed the top three school system priorities and one additional. The total cost for those projects was $4.2 million, with the difference being used to fund various energy-saving improvements.

There are precious few occasions to conserve our valuable resources, and it is inconceivable that our school board would choose not to embrace this opportunity.

I believe the School Board’s decision was partially based on lack of information, misinformation, assumptions and personal agendas. To my point: a representative from Trane was not invited to present the last iteration of the contract; board members incorrectly expressed that City Council was not interested in supporting the proposal; neither staff nor administration recommended approval; and there was an assumption and strong inference that $2.5 million of capital Improvement money would be allotted to the school system for the next five years.

At a time when virtually every municipality and education system is contending with limited funds, it is unconscionable that the ability to save a minimum of $6.3 million plus permanent energy upgrades is being squandered. This is especially true when a 4-cent increase in the real property tax rate is being proposed in this year’s budget.

It should be noted that school board members Mike Debranski, Linda Bouchard and David Mitnick voted in favor.

We owe it to our citizens to be vigilant stewards of their tax dollars. We can do better!

Mike Duman is a member of Suffolk City Council, representing the Chuckatuck Borough. Contact him at mike.duman@mikeduman.com.