Douglas County School District Implements Innovative Financing Tool, Cuts ESPC Timeline to Six Months

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by
Jen Singer, ICF International
on
Mar 21, 2016

Douglas County School District (DCSD) is the sixth largest district in the State of Nevada serving over 6,000 students across 11 schools. The district implemented a multi-pronged financing approach to implement energy savings measures to address its aging school facilities, increasing utility costs and limited funding.

The district combined an energy savings performance contract (ESPC) to create operational efficiencies with cost-saving measures funded by a tax exempt installment-purchase agreement (IPA) to address its aging school facilities, increasing utility costs and limited funding.

A traditional ESPC can take over three and a half years to receive approval prior to construction. To overcome the timeline, the district split the measures into two types: self-funded projects paid by savings achieved and larger projects which were coordinated with the same energy service contracting organization (ESCO) but paid for through the IPA. The latter did not require taxpayer approval to implement since it is not considered a long-term debt obligation. With only school board approval needed, the district was able to complete the request for proposals (RFP) process, financial grade audit (FGA), project selection and approval, and arrangements for the IPA to fund an ESPC in less than six months.

The district has realized substantial energy and cost savings as a result of the ESPC and boosted public confidence towards future energy efficiency measures. The $5.1 million ESPC currently pays for itself through $456,000 in guaranteed annual energy cost savings. The district has realized a 16% improvement in energy use intensity per square foot in 2014 from a 2008 baseline over its portfolio of 945,000 square feet.  In 2008, voters approved $35-40 million of general obligation bonds for energy-related improvements over a 10-year period.  DCSD compiled a 10-Year facilities master plan (FMP) and developed material standards specifications to guide renovations and new construction efforts.

DCSD continues to serves as a model for other school districts in the State of Nevada and across the country.  The district was selected as a 2011 Cashman Good Government Award finalist in the school district category. The award was sponsored by the Nevada Taxpayer’s Association and recognized DCSD for its fiscal and operational savings and efficiencies generated by the ESPC.  In addition, the Nevada Governor’s Office of Energy published a whitepaper on the success of their ESPC to showcase the benefits of the model.

Learn more about the district’s financing innovation here.