Wednesday, July 18, 2012

School District shows $212K in energy savings

Report compares costs before and after McKinstry work

Express Staff Writer

A report prepared by the Blaine County School District shows that the district realized utility savings of $212,395 in the first full year after energy savings measures where put in place at six district schools and facilities under a contract with Seattle-based McKinstry Essention.

The energy savings are 21 percent less than an annual energy savings projection of $270,000 made by district Business Manager Mike Chatterton prior to district approval of the McKinstry contract in 2010. They are 29 percent less than savings promised by McKinstry in 2009 prior to a voter approval of a 10-year $59.8 million plant facilities levy, the major funding mechanism for the work.

In fairness to the district and McKinstry, those earlier projections were made before the scope of work was finalized and included buildings that were not part of the McKinstry contract. Also, fine-tuning of energy savings systems continues at the six facilities where work was performed.

Public controversy over the McKinstry contract erupted in May when both McKinstry and the School District filed lawsuits against each other in Blaine County 5th District Court. McKinstry is alleging that it performed work worth $25.8 million and that the district still owes the company about $7 million. The district is alleging that it authorized work only worth $18.6 million and is claiming damages for at least that amount.

The two cases have now been consolidated into one case, with McKinstry as the plaintiff and the district as the defendant.

McKinstry was contracted in 2010 to perform geothermal resource development, heating, ventilating and air conditioning retrofits, and other improvements at eight district schools or facilities. Three of the projects were at Carey School, where energy savings are combined in one total in the new district report.

The report compares electricity, natural gas and water costs at district facilities in the 2009-10 school year, before the start of the McKinstry work, to the same utility costs for the 2011-12 school year, after most of the McKinstry work was completed.

Utility costs in the aftermath of McKinstry Essention work at six Blaine County School District facilities show savings of more than $212,000 in the 2011-12 school year compared to the 2009-10 school year before the work was done.

According to the report, utility costs at Bellevue Elementary School, Carey School, Hailey Elementary School, Wood River High School, the district-owned Community Campus and the District Support Services building totaled $652,319 in the 2009-10 school year. Utility costs at the same six facilities were $439,924 for the 2011-12 school year.

The report was not publicly available Tuesday. It was prepared by the district at the request of community members who are studying the McKinstry contract situation, and one community member provided a copy to the Idaho Mountain Express.

The district declined to release the report to the Express in response to two written requests last week. However, district officials confirmed that the report was prepared by the district and released to members of the public by Chatterton.

By press time Tuesday, the district did not respond to a request from the Express made Monday for explanation or comment regarding the document.

One of the controversial issues involving the McKinstry work is whether energy savings will exceed the amount spent. McKinstry officials stated in 2010 that payback could come in as little as 20 years, while some members of the public have estimated it will take more than 100 years.

Diane Barker, a certified public accountant and financial advisor who opposed entering into the McKinstry contract in 2010, wrote in an email to the Express that the true costs to the district of the McKinstry work, compared to actual energy savings, need to take into account the costs of borrowing on future levy revenues, the costs of various consultants and the costs of continuing litigation. She also pointed out that the $18.6 million that the district authorized for the McKinstry work included various items unrelated to energy savings, which makes an actual calculation of costs as opposed to benefits difficult to ascertain.

Ketchum resident Holmes Lundt wrote in an email that he continues to believe that the McKinstry work represents money badly spent.

"With the first reports of actual energy use now in, it becomes clear that the projected savings were fantasy," Lundt wrote. "The programs that made little sense as proposed, actually had no economic foundation whatsoever.

"We would again implore the board of trustees to put a moratorium in place on further green programs until independent advisors can be appointed to sort through this mess."

Terry Smith:

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