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Using federal stimulus funds for capital energy improvements can pay off with big dividends in the end

5 ways to use stimulus funds for long-term success


Using federal stimulus funds for capital energy improvements can pay off with big dividends in the end

According to the U.S. Education Department, energy costs are the second biggest expense for K-12 schools after salaries, with districts spending nearly $8 billion on those costs annually. Given the massive influx of stimulus funds coming to districts, they have an enormous opportunity to target the infusion toward their energy usage. In addition to upgrading aging facilities, energy investments offer cost savings that can help fund future priorities while providing a safe and comfortable learning environment.

One district that successfully did that is Port Allegany School District. Superintendent Gary Buchsen invested $1.9 million in federal stimulus funds into much-needed capital improvement projects that, once complete, will provide dramatically improved indoor air quality and a comfortable learning environment through renovating aging restrooms and kitchen facilities.

Not only will the project cut energy and operational costs by 23 percent, but it will also leave 60 percent of the total funding received for additional projects.

Taking a holistic, innovative approach to spending stimulus money can turn a one-time cash infusion into long-term success for students, teachers, and districts. To duplicate Port Allegany’s success, there are five key steps school district leaders can take:

1. Determine Priority Projects

School districts have a wide range of mission-critical needs and shifting priorities, so developing a clear list of both short and long-term priorities is key to determining how to maximize available funding. This year, many schools are focused on addressing air quality to reduce the spread of COVID-19. Federal stimulus bills specifically call out that money could be used to repair school facilities–especially ventilation systems–to improve air quality.

Outdated HVAC systems are among the top factors that impact the health of schools, teachers, and students, so Port Allegany SD prioritized upgrading its system, understanding that having a modern HVAC system would improve many other issues throughout the school system.

2. Eliminate Barriers to Modernization

Not having enough money up front is a huge challenge for school districts, particularly because so often capital improvements represent a major expense. This has also led too many schools to develop a deferred maintenance backlog, meaning that districts are unable to implement technologies that can improve the learning environment because they are stuck in an expensive react-and-repair cycle.

Port Allegany High School had an outdated controls system, an old roof, and outdated mechanical equipment, which drained the facility improvement budget. Once the district tackled these challenges with new and upgraded equipment, district leaders could focus on other areas that impact the student and staff experience.

3. Create a Long-Term Plan

Stimulus funding should not be viewed as a stopgap measure, but rather as a long-term financial investment opportunity that can enable districts to prepare for the future. To lay the groundwork, districts should create a long-term plan that includes a comprehensive inventory of capital assets. This allows for a proactive approach to maintenance and lifecycle planning, which helps schools make the most of their facilities.

An effective long-term plan should showcase understanding the holistic impact of different systems on the budget. For example, Port Allegany’s energy and electrical systems were running constantly, causing dramatic utilities overspending. Installing modern HVAC and lighting systems will produce significant cost savings while maximizing a small operations staff because the new controls system enables the remote scheduling, operating, and evaluation of equipment.

4. Maximize Return on Investment

For decades, many school districts have successfully stretched their existing funding by utilizing energy savings performance contracts (ESPCs). ESPCs are financial vehicles that help schools make near-term infrastructure improvements and energy savings that support future reinvestment in capital projects.

Through ESPCs, districts can develop long-term plans that produce guaranteed outcomes, reduce the risk of budget uncertainty, and streamline operations. Many districts with ESPCs can reduce their energy and operational costs 20-30 percent while making critical infrastructure upgrades.

5. Find the Right Partner

Getting access to funding of any kind and dealing with contractors, officials, and permitting issues is complicated. That’s why perhaps the most important step in this journey is finding an experienced partner who can support your district every step of the way.

A good ESPC partner can help districts find, apply for, and implement funding opportunities and lead the planning, design, and implementation of projects from start to finish. Partners can also help find grant opportunities and negotiate favorable utility rates through state-wide organizations. Port Allegany obtained a state energy grant and competitive energy commodity rates through the Pennsylvania Public Entity Energy Consortium, which locks in prices so schools don’t have to worry about volatile energy markets and can better plan spending.

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