Agenda Item
Meeting Date: 8/15/2017 - 6:30 PM
Category: ITEMS OF BUSINESS
Type: Action
Subject: 9. Action on a Request to Amend the Resolution to Exceed the Revenue Limit for Energy-Efficiency Projects (Phase II) in the 2017-18 through 2036-37 School Years
Strategic Plan Compatibility Statement:
Goal 3
Effective and Efficient Operations
Policy: Admin Policy 3.06 - Fiscal Accounting and Reporting
Attachments: 1. Original Resolution for Revenue Limit Exemptions for Energy Efficiencies
2. Amended Resolution for Revenue Limit Exemptions for Energy Efficiencies
File Attachment:
1. Original Resolution for Revenue Limit Exemptions for Energy Efficiencies.pdf
2. Amended Resolution for Revenue Limit Exemptions for Energy Efficiencies.pdf
Background: In 2009, Wisconsin Act 28 created the Energy Efficiency Exemption (EEE) for projects to be completed within the fiscal year. In 2011, this law was modified to include the following specifications:

1) the project must result in the avoidance of, or reduction in, energy costs or operational costs;

2) the project must be governed by a performance contract entered into under Wis. Stat. §66.0133; and

3) the levy may be used to repay the bonds or notes issued to finance the project, if any are to be issued for periods not exceeding 20 years.

In March 2016, the Board approved Johnson Controls, Performance Services, and Trane as pre-qualified energy-service contractors for the design, engineering, project management, and implementation of the replacement of large capital-costs items in accordance with §66.0133, Energy Savings Performance contracting, as referenced in the Revenue Limit Exemption for Energy Efficiency, Wis. Stat. §121.91(4)(o).

In June 2016, the Board approved a contract with CESA #10 to provide owner’s representative services for performance-contracting energy savings and infrastructure-improvements projects.

In May 2017, the Board approved entering into a three-year performance contract under Wis. Stat. §66.0133 with Johnson Controls, a two-and-a-half-year performance contract under §66.0133 with Performance Services, Inc., and a three-year performance contract under §66.0133 with Trane U.S., Inc., for $34.3 million of energy-efficiency Phase II projects at 26 school sites.

On May 25, 2017, the Board passed the resolution to exceed the Revenue Limit for Energy-Efficiency Projects (Phase II) in the 2017-18 through 2036-37 school years based on estimated debt-service payments in compliance with Wis. Stat. §121.91(4)(o)(1m).

In June 2017, $34.6 million in RACM Lease Revenue Bond proceeds was received to fund the $34.3 million of energy-efficiency Phase II projects and $0.3 million of related cost of issuance. The Bonds have a total term of approximately 19.5 years, with all bonds to be repaid by November 15, 2036.

With the bonds funding the Energy-Efficiency Projects (Phase II) now issued, an amendment to the resolution passed on May 25, 2017 is required to reflect the final actual debt-service payments vs. the previously estimated debt-service payments.
Fiscal Impact Statement: Adoption of the Amended Resolution to Exceed the Revenue Limit for Energy-Efficiency Projects (Phase II) provides funding for the corresponding debt-service payments in compliance with Wis. Stat. §121.91(4)(o)(1m) based on final actual debt-service payments vs. the previously estimated debt-service payments.
Implementation and Assessment Plan Wis. Stat. §121.91(4)(o)(1) allows a school board to adopt a resolution to exceed the revenue limit in any school year by the amount spent by the school district in that school year on a project to implement energy-efficiency measures or to purchase energy-efficiency products, including the payment of debt service on a bond issued to finance the project, if the projects results in the avoidance of, or reduction in, energy costs or operational costs, the project is governed by a performance contract entered into under Wis. Stat. §66.0133, and the bond obtained to finance the project is issued for a term not exceeding 20 years. If so adopted, the resolution is valid for each year in which the school board pays debt service on the bonds.

Wis. Stat. §121.91(4)(o)(3) requires that, when a school district issues bonds to finance such projects as described above and utility costs are measurably reduced as a result of the project, the school board shall use the savings to retire the bonds.

As a matter of best practice, the Board should adopt the Resolution for Revenue Limit Exemptions for Energy Efficiencies when entering into performance contracts, as referenced in Wis. Stat. §66.0133, and when future utilization of the Revenue Limit Exemption for Energy Efficiencies under Wis. Stat. §121.91(4)(o) is expected. Board-approved resolutions must be passed by October 1 of the school year in which a revenue-limit exemption is sought.
Recommendation: The Administration recommends the Board pass the Amended Resolution for Revenue-Limit Exemption for Energy Efficiencies.
Approvals:
Recommended By:
Signed By:
LaWanda Baldwin - Comptroller
Signed By:
Shannon Gordon - Senior Director
Signed By:
Dr. Darienne Driver - Superintendent