ART HYLAND, BOARD MEMBER, COMMENTS

Bud, I see this blog has not seen much activity lately.  Perhaps it can be a place for board candidates to discuss issues.  So here goes.

What follows is a discussion about two issues that were important during the past school year:  one was the bond election, and the other was applying for and receiving a grant for an upgrade to our heating system.  I thought it might be instructive for people to know how I came down on these two issues, and in that effort I'm copying what I wrote to the Board back when the issues were not yet decided.

TO:  NASELLE DISTRICT SCHOOL BOARD MEMBERS, FEB. 17, 2013

"Re:  Two Proposed Resolutions for Feb. 18 Board Meeting, (Running another bond election & Signing Grant Document):

1. 2nd Bond Issue:  I am opposed to deciding at our Feb Board meeting to go ahead with another election. We have, I think, until Mar. 8 according to Rick, to sign a resolution requesting a new ballot measure.   It seems to me that to decide right now, so soon after the election, would be telling the citizens and community that we are willing to ignore their recent vote and proceed to push it through without even trying to find out the reasons why 45% of the voting community voted against it.  I'm told that the push will be to simply obtain additional yes votes in Pacific County in order to get to the required 60%.  

I suggest we genuinely attempt to find out just why so many voted against it and see if we might be able to persuade otherwise, in addition to seeking out more yes votes.  But to immediately broadcast to those who voted no that they are wrong, we are right and we're going to try an end-around is to potentially make even more of the no voters come out next time.  We need to reach out to those negative voters a little more and see what the problem is.  I suggest we have a board meeting in Rosburg, and advertise it well in an attempt to find out directly from the community just what misconceptions still lie out there.    Maybe there isn't enough time for all this, but I hate making us look like we all know better than so many of our citizens."

[Voters did indeed reject the idea, believing the Board didn't care what the voters thought, and so the second measure result turned out considerably worse than the first.]  

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[My overall concern about the grant project discussed below was the fact that the Office of Superintendent of Public Instruction, who controlled the granting of close to $100 Million of energy saving project grants, was derelict in their screening process.  They were(are) more interested in promoting the concept than in actually saving energy.  This allowed Naselle and scores of other districts to install heating and other systems which are supposed to make school buildings much more energy efficient, when in fact the very rules and guidelines to ensure efficiency were ignored in favor of just getting the money out to the end users no matter what.

We were awarded this energy grant without ever having to prove its worth; in fact, the grant contractor representative, at an open board meeting allowed as how this system would never have been chosen by any private firm because it simply is not cost effective.  As you read the below, if you care to, the term Cost Effectiveness Criteria" is indeed discussed in both the RCWs that set all this big money project in motion, and with OSPI who dispenses the grant money.  They mouthed the words but ignored its meaning.  Anyway, I tried to get the Board to pare the project slightly in order to at least save state taxpayers about $200,000+ while retaining 90% of the meager savings per year on energy, but they didn't buy it for reasons I won't go into at the moment.]

Continuing with what I wrote to the Board in February of this year:

2.  Re: Proposed ESCO Resolution 121305:  (regarding a heating/ventillation project costing approx. $800,000)

Before we sign this resolution, each of us needs to thoroughly examine just what it is that we are signing and verifying in this resolution.

Here's what the proposed Resolution 121305 includes:

It says that OSPI requires we submit  evidence of the following:

"2. Assurance that the district will follow all applicable laws and regulations pertaining to energy performance contracting and applicable public works laws."

Therefore our resolution includes: (underlines from hereon are my emphasis)

"BE IT RESOLVED that the Board assures the OSPI that the district will follow all applicable laws and regulations pertaining to energy savings performance contracting and public works projects, and

further, BE IT RESOLVED that the Board certifies that all funds will be used as intended in the grant award and as identified in the grant application;

In the Grant Application we certified that "district officials read and understood the following:

"10. Districts must follow the contracting methods described in the Energy Savings Performance Contracting Guidelines for WA Public Agencies Energy Savings Performance Contracting Guidelines"

Which Guidelines contain the following Major Section:  (My emphasis underlined)

"3.  Cost-Effectiveness Criteria:

'Chapter 39.35C.010 RCW provides one definition for cost-effectiveness. It states:  "Cost-effective" means that the present value to a state agency or school district of the energy reasonably expected to be saved or produced by a facility, activity, measure, or piece of equipment over its useful life, including any compensation received from a utility or the Bonneville Power Administration, is greater than the net present value of the costs of implementing, maintaining, and operating such facility, activity, measure, or piece of equipment over its useful life, when discounted at the cost of public borrowing.'"

In other words, is the present value of the energy savings/yr over 25 years greater than the cost to make the improvements, operate the improvements & maintain the improvements? 

Are you prepared to certify that we have followed this criteria?  I calculated, conservatively, that there is no way the combination of projects we listed as the ones we want meets that criteria.  Do we have calculations that show that they do?  I haven't seen them.  I actually went over this at the last meeting, but it was difficult to show you the results, and that discussion was pushed by the need for accepting the grant on a timely basis.

But now we have this resolution, which forces us to look once again at the rules by which we are governed in this grant.  Grants come with conditions, as you all know, and this is just the beginning.

It's my analysis that Sunset Air has been allowed to sort of take the lead as it were to help us through the maize of this project including the grant process because they've done this all before and know more than we do about Energy Savings Performance Contracting etc.  But in the end we are the ones who are supposed to know what we're doing.  Sunset Air has apparently decided the only criteria needed to be followed is the "simple payback" criteria, which is the 3.5 years they so prominently display on page 3 of their color brochure "Energy Services Proposal," determined by dividing our roughly $80,000 contribution by the $23,231 savings per year.  (BTW it's not $25,000 anymore just to be clear).  This isn't what the Guidelines require; it's just another criteria that evidently some people find useful, but it has nothing to do with energy efficiency, which is the point of the entire program. 

I suggest that before we sign a resolution regarding this project/grant for OSPI, that we have a meeting with Sunset Air so they can answer some of these questions:  Like:  Have they calculated the criteria spelled out above, and if so where is it?  And why did they recommend that we go with the underground Heat Pump when its cost is an additional $118,000 compared to an above ground unit AND the extra savings in energy is only $1000/yr?  If one does a PV using these numbers, the PV of an additional $1000/yr over 25 years is just $17,000.  Which means it falls way short of just the $118,000 cost to implement it alone.  It cannot be justified.  These are the kinds of questions that I would like Sunset to answer since they are the professionals.

If they can convince us that all of the proper criteria are met and we have nothing to worry about, then are they prepared to guarantee in writing that if the District is ever audited and we fail to have complied with the requirements that Sunset Air will reimburse us for any and all costs associated with an audit finding and/or penalty, and/or return of funds, including paying us for the time necessary to defend such a finding if made?--Art" 

In the end, a 4-1 decision (I opposed) was made to take the full grant, install the expensive system and look the other way.  This kind of decision takes place in thousands of government entities throughout our nation, and represents in my opinion why government is often irresponsible with taxpayer money.  The rational that everyone else does it, or that if we don't take the money someone else will are very poor excuses, especially for a school district whose very purpose--to help instill moral and critical thinking to our students--is blatantly ignored by those in charge.  Of course the students are unaware of these kinds of decisions, blissfully ignorant that what they are being taught is being violated behind the very corridors they walk. I would be glad to debate this issue with anyone or any group.

--Art Hyland

 503-440-3937