1 Energy Efficient, Operationally Effective, Healthy, High Performance Schools = Goal Investment Grade Audit Summary June 7, 2011 Keven Ward, Public Sector.

1

Energy Efficient, Operationally Effective, Healthy, High Performance Schools = Goal

Investment Grade Audit SummaryJune 7, 2011

Keven Ward, Public Sector Consultant, Ingersoll Rand/TraneAdam Johnson, P.E., Project Developer, Ingersoll Rand/Trane

Nathan Whitney, Project / Construction Manager, Ingersoll Rand/Trane Sara Holmes, LEED AP, Education Facilities Consultant, Ingersoll Rand/Trane

Agenda

Kansas Master Contract Process Review with Key Milestones

Alignment with District’s Educational Programming and Strategic Master Planning

High Performance Program Improvements for District Schools

Program Savings

Fiscal Planning

Next Steps / Board Actions

2

Utilizing a Kansas Statutory Fiscal Tool - Authorized by Kansas Statute 75-37,125 - Advocated by Legislature, Governor, KSDE, KASB, et al

Creating High Performance Learning Environments

Recent Education Sector Projects

Year Project Amt Financing Master Plan

Recognition

Tonganoxie USD 464 2009 $2.1 million Tax-Exempt LPA Yes 2009 Gov. Award

SE of Saline USD 306 2009 $1.4 million Tax-Exempt LPA Yes 2010 Gov. Award

Plainville USD 270 2009 $2.5 million QZAB & Capital Outlay Yes KASB Convention

Nemaha Valley USD 442 2010 $.350 million Capital Outlay Yes KASB Convention

Oxford USD 358 2010 $1.9 million Tax-Exempt LPA Yes KASB Convention

Rock Creek USD 323 2010 $2.1 million Tax-Exempt LPA Yes 2011 Project

Valley Heights USD 498 2010 $1.3 million QZAB Yes 2011 Project

Marysville USD 364 2010 $1.9 million QZAB Yes 2011 Project

Lee’s Summit R-7 2010 $6.0 Million Tax-Exempt LPA Yes 6th Project

University of Central MO 2009 $36.1 Million Tax-Exempt LPA Yes Nationally

Statutory Fiscal Tool Milestones

Negotiate Scope & Contract

Authorize Investment Grade Audit

3/1/11

Installation Commences Summer ‘11

CommissioningAcceptance Spring 2012

Warranty, M&V - Performance

Guarantees

Initial Conceptual Discussion

Winter ’10/’11

ESCO Team & the Facility

Team Identify Facility

Opportunities

Preliminary Technical and

Financial Analysis

Preliminary Technical and

Financial Summary

3/1/11

Detailed Technical & Financial

Investment Grade Audit

Project Approval &

Contract Execution

6/7/11

No Fee to Turner USD 202

Cost Financed in Project

Statutory Fiscal Tool Milestones

Data Mining & Analysis:• Align with District Vision and Master Plan• Capital Project Plan Review• Utility bills – 36 months• Operational, maintenance, & repair expenditures• Parts / contractor invoices (2 fiscal years)• Review of existing programs & future plans• Facility surveys by Trane engineers • Budgets & Financial Considerations• Identify student initiatives to reinforce

• Energy Conservation Measures Matrix Developed• Budgetary Estimating• O&M Expenditure Analysis

Workshops & Interviews: • Superintendent, Administration, Board of Education• Building Principals, Facility Manager, & Key Personnel

Strategy & Alignment Mtg. • Preliminary Analysis

Summary• Pro forma Summary• Fiscal and political

considerations• BoE action to authorize


Investment Grade Audit Review • IGA Analysis Summary• Pro forma Summary• BoE action to authorize

Energy Performance Contract

Investment Grade Audit Process

6

O Owner I Involved R Reviewer

Milestones Trane Turner

Description

Adam J

ohnson, P

.E.

P.E. F

irm

Keven W

ard

Al Jones

David

Hansen, P

.E.

Sub-contra

ctors

Mic

hael S

hort

Jaso

n Dan

doy

Bill H

atfiel

d

Dr. M

ichelle

Sedler

Comm

ence

Conclude

Completed

Tec

hn

ical

Detailed Facility Surveys O I I I I I 7-Mar 1-AprDetailed Trace 700 Model of Facilities & Energy Calcs. O I 14-Mar 15-Apr CompletedDesign Development O I I I I I R R R 7-Mar 4-Apr CompletedScope of Work Packages O I 7-Mar 4-Apr Completed

Analyze CIP projects not qualified for project I I I O R R 3/21 wk. 1-Jun On scheduleAnalyze O&M Expenditures I O I O R R 3/21 wk. 1-Jun On scheduleConstruction Budget O I I I I I I O R R Late Apr. 1-Jun On scheduleObtain Financing Term Sheets (firm proposals) O O R 9-May 20-May ReceivedResearch grants & rebates O I R R R 7-Mar 2011 On schedulePro forma Cash Flow Scenarios I O R O R R 9-May 1-Jun On schedule

Completed

Tec

hn

ical

Fin

anci

al

Engineered Savings Fund

Integrated, Comprehensive

Projectp

Educational Programming Master Plan

Reinforcing & Accelerating Strategic Master Plan Goals

Reinforcing & Accelerating Strategic Master Plan Goals

Turner USD 202 Strategic Master Plan Goals / Strategies

High Performance Program Benefits

Inst

ruct

iona

l Bes

t Pra

ctic

es

Tech

. to

Sup

port

Inst

ruct

ion

Diff

eren

tiate

d In

stru

ctio

n

Bul

l's E

ye C

urri

culu

m

Rec

ruit

Teac

hers

to D

istr

ict

Ret

ain

Qua

lity

Pro

fess

iona

ls

Incr

ease

Sta

ff M

oral

e

Sup

port

TLT

sS

afe

& O

rder

ly E

nvir

onm

ent

Qua

lity

Prog

ram

s &

Fac

ilitie

s

Effe

ctiv

e Fi

scal

Man

agem

ent

Mai

ntai

n S

tate

of A

rt F

acili

ties

Com

mun

ity R

elat

ions

Ste

war

dshi

p of

Res

ourc

es

High Performance Program Benefits

Learning Environment ImprovementsIndoor Air Quality (IAQ)

Visual Comfort, i.e. High Performance LightingThermal Comfort - Consistent & Conducive to Learning

Acoustic Comfort

Fiscal Advantages

No Tax Increase

Reduce Energy, Operational, and Maint. Expenditures

Mitigate State Education Funding CutsLeverage Savings Through Favorable Legislation

Maximize Capital Outlay Fund / Preserve General FundAvoid Future Cost Increases

Environmental Stewardship

Energy ConservationReduce Carbon Footprint

Demonstrate Responsibility to Students

9

District Facilities

Prioritized High Performance Program Improvements

Recommended From Investment Grade Audit

Early

Lear

ning

Cen

ter

Turne

r Ele

men

tary

Oak G

rove

Ele

men

tary

Mid

land

Tra

il Ele

men

tary

Junct

ion

Elem

enta

ry

Turne

r Mid

dle S

choo

l

Turne

r Hig

h Sch

ool

Endea

vor /

Focu

s

Distri

ct M

aste

r Pla

n Alig

nmen

t



High Efficiency Lighting Upgrades Yes

Expand Existing Energy Management / Building Control System

Yes

HVAC Improvements Yes

Customized Building Controls for New Dehumidification Unit Vents

Yes

New Energy Management / Building Control System

Yes

Replace hard ceilings in selected hallways and classrooms

Yes

High Performance Improvements Not Applicable

Early Learning

Center



Early

Lear

ning

Cen

ter

Distri

ct M

aste

r Pla

n Alig

nmen

t





Yes



Yes

High Performance Improvements

Indoor Air Quality and Monitoring Benefits

New Dehumidification Unit VentsInstall HW Boiler from District Stock

T-12s Phased Out by D.O.E. to T-8sMH/HPS to T-5s in Applicable GymsOccupany Sensors in Selected Areas

Thermal Comfort and Efficiency Control

Turner Elementary

SchoolPrioritized High Performance Program Improvements


Turne

r Ele

men

tary

Distri

ct M

aste

r Pla

n Alig

nmen

t





Yes



Yes


Yes



Improve Visual Comfort, Acoustics, and Energy Management

New Dehumidification Unit VentsChilled Water System to Variable FlowReplace Pneumatic VAVs to DDC VAVs



Facility Description Oak Grove Elementary School

Oak Grove Elementary

SchoolPrioritized High Performance Program Improvements


Oak G

rove

Ele

men

tary

Distri

ct M

aste

r Pla

n Alig

nmen

t





Yes



Yes



New Dehumidification Unit VentsChilled Water System to Variable FlowInstall 1 HW Boiler from District StockInstall (2) New HW Boilers



Midland Trail Elementary

SchoolPrioritized High Performance

Program Improvements Recommended From


Mid

land

Tra

il Ele

men

tary

Distri

ct M

aste

r Pla

n Alig

nmen

t





Yes



Yes


Yes



Improve Visual Comfort, Acoustics, and Energy Management

New Dehumidification Unit VentsChilled Water System to Variable FlowInstall (2) HW Boilers from District StockReplace Pneumatic VAVs with DDC VAVsReplace 1988 RTU with VAV RTUReplace East Classroom Addition DX Splits



Junction Elementary




Junct

ion

Elem

enta

ry

Distri

ct M

aste

r Pla

n Alig

nmen

t





Yes



Install HW Boilers from District StockAbandon Failing Underfloor Return Air DuctsRedirect Return Air to Plenum Add Averaging Sensors to Selected Classrooms



Turner Middle




Turne

r Mid

dle S

choo

l

Distri

ct M

aste

r Pla

n Alig

nmen

t





Yes



Yes



New Dehumidification Unit Vents



Turner High

School



Turne

r Hig

h Sch

ool

Distri

ct M

aste

r Pla

n Alig

nmen

t





Yes


Selected Areas in Gyms, Pool, CafeteriaCompact Fluorescent Fixture RetrofitsOccupancy Sensors in GymsDaylight Harvesting in Selected Areas


Endeavor / Focus



Endea

vor /

Focu

s

Distri

ct M

aste

r Pla

n Alig

nmen

t





New Energy Management / Building Control System

Yes



New Variable Refrigerant System for Selected Area


Investment Grade Audit Energy

Analysis

$95,044 1st Yr. Savings

Operations, Maintenance, & Repair Expenditure Analysis

Derived from Turner USD 202’s Expense Budget Reports Average of FY2009 and FY2010 Doesn’t include District’s staff time

O & M Category

Fis

cal

Yea

r

Ap

pli

cab

ilit

y to

P

roje

ct

% A

pp

lied

Per

W.O

. C

ateg

ory

FY

To

tal

Exp

end

itu

res

To

tal

An

nu

al O

&M

E

xpen

se A

dju

sted

fo

r E

CM

An

nu

al O

&M

Exp

ense

C

alcu

late

d b

y %

A

pp

lied

An

nu

al O

&M

Exp

ense

A

dju

sted

fo

r E

CM

+ %

A

pp

lied

Middle School Boiler Project FY 09 High 5% $1,070,587 N/A $53,529 N/AMiddle School Boiler Project FY 10 High 5% $2,378,170 N/A $118,908 N/AHigh School O & M Expenses FY 09 High 70% $723,260 $339,161 N/A $237,413Various Schools O & M Expenses FY 09 High 70% $247,689 $101,513 N/A $71,059Various Schools O & M Expenses FY 10 High 70% $209,290 $96,010 N/A $67,207Various Schools O & M Expenses FY 10 High 70% $241,659 $46,222 N/A $32,355Contingency Reserve (Oak Grove) FY 09 High 0% $133,812 $133,812 N/A $0Contingency Reserve (Oak Grove) FY 10 High 0% $42,450 $42,450 N/A $0Totals $5,046,915 $759,168 $172,438 $408,034

Middle School Boiler Project 2 Year Average Savings $86,219All Other O&M Expenditures 2 Year Average Savings $204,017

$290,236

150,000$

Operation and Maintenance Analysis

Amount Included in Pro Forma Cash Flow

Total Operation and Maintenance Savings Candidate for Verification

Investment Grade Audit Fiscal Planning Investment Grade Audit

Metrics

District-wideHigh Performance

School Improvement

Project

Project Project $6,014,902Investment Grade Audit Fee $29,289Kansas FCIP Program Adminstration Fee $71,221

Total $6,115,412

Financing SummaryLevel Payments for 15 Yr. Term w/ 3.79% tax-exempt municipal lease(Additional financing proposals are being analyzed for June 21st BoE mtg)

$449,190 Annual$6,737,850 Total

Qualified Zone Academy Bonds - $833,000 in 2010 Allocation Taxable Direct Pay QZAB - Net Effective Rate 0.65% for 15 year term - Net Payment After Subsidy

$58,465 Annual$876,975 Total

Qualified Zone Academy Bonds - $214,000 in 2011 Allocation Taxable Lender Tax Credit QZAB - Supplemental Rate 2.30% for 15 year term - Net Payment

$17,031 Annual$255,465 Total

Total Annual Payment $524,686Total Project Payments Over 15 Year Term $7,870,290

Project Funding Resources

Energy Savings with 4% escalator$95,044 First Yr.

$1,974,405 Project TermOperational & Maintenance Savings with 4% escalator $3,116,038 Project TermCIP Reallocations For Forecasted Projects Completed in Performance Contract $452,450 in Current CIPDeferred Maintenance / Annual Capital Improvement Budget Reallocation $2,546,171 Project Term

Total Project Funding Resources $8,089,064

Favorable Funding Source Advantages

22

Prudence of Pro-Activity Rewarded

1 2 3 4 5 6$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Cost of Delaying $6.1M Performance Contract

Finance Risk Increase of 1 percentage point

Construction Cost Escalation 5%

Oper.& Maint. Savings Forfeited

Utility Savings Forfeited

School Years

Acc

um

ula

ted

Co

st o

f D

elay

Trey Fruge District General Mgr

Turner USD 202 Project Team Organizational Chart

Project Admin.

Mike Mahoney, P.E. Engineering Team

Leader

Gary Downes P.E. Mechanical Electrical Plumbing Specialist

Randy Jameson, P.E., CEM, Lighting

Specialist

Neil Maldeis, CEM, AEE Measurement &

Verification Specialist

Larry Cook Service Planner

Brad VanArnsdale Energy Engineer

David Hansen, P.E. LEED AP,

Equipment Specialist

On-Site Presence

Lighting Contractor

Robert Kairigan Safety Coordinator

Mechanical & Electrical

Contractors

Jenny Osipik Quality Assurance

Coordinator

Chris Begemann, Job Superintendent

Adam Johnson, P.E. Project Developer

Rick Krause District

Construction Fulfillment Leader

Keven Ward Public Sector

Consultant

Sara Holmes Education Facilities

Consultant

Nathan Whitney On-Site Project

Manager

Al Jones, LEED AP, Bldg. Controls

Specialist

Trane TechniciansTrane Technicians

Angie Gensler Marketing

Coordinator

Craig Grosser, Architect

Chad Althouse, Project Developer

Gina Rudy

Equipment Fulfillment

David Holtgrefe Building Controls

Project Manager

Joshua White Equipment Project

Manager

Turner USD 202

Turner USD 202 Project Management Team Organizational Chart

Nathan Whitney On-Site Project

Manager

Project Admin.

On-Site Presence

Turner USD 202

Robert Kairigan Safety Coordinator

• Local construction management• Weekly construction meetings• Daily e-mail updates• BoE packet updates • Monthly staff meetings• Website communication• Safety meetings• Security compliance• Occupied space management

Local Project Management

Trey Fruge Kansas General Mgr

Rick Krause District

Construction Fulfillment Leader

Adam Johnson, P.E. Project Developer

Gina Rudy

Equipment Fulfillment

Chris Begemann, Job Superintendent

Brad VanArnsdale Energy Engineer

Lighting Contractor

Mechanical & Electrical

Contractors

Jenny Osipik Quality Assurance

Coordinator

David Holtgrefe Building Controls

Project Manager

Trane Technicians

Joshua White Equipment Project

Manager

Trane Technicians

25

Implementation Process and Timeline

PreliminaryAnalysis

Investment Grade Audit Construction Commissioning

Verification

MeasurementAnd Verification

45 Days 80 Days 150 Days 30-90 Days 10 to 15 Yrs

Project Development Phase Project Sustainment PhaseProject Installation Phase

Preliminary ECM’s Identified Financial Scoping Tool Created Budget Estimate Prepared

Detailed Survey Design Development Construction Budget Established Construction Drawings & Specs Detailed Trace 700 Model Financing secured

Project Management Planning & Scheduling Coordination Detailed Design CM/GC Initiated Installation

Verify ECM Performance Complete Punch Lists Training As-built Drawings Energy Policy

M&V Process Fine Tuning of DDC System Preventive Maintenance Initiate / Recommend More ECM’s

Project & Energy Manager Project & Energy Manager Project & Energy Manager

Project Implementation Overview

Prepare BTU Energy Curriculum Program

Publicity Campaign – Community Events, Press Releases, Awards, Legislator visits, etc.

27

Next Steps

Board considers action June 7th to authorize Energy Performance Contract – Pending legal review and financing closing– Statutory compliance– Streamlined Kansas Master Contract– Enables summer break work schedule commencement

• Speed to savings advantages• Favorable buyer’s market with historically low financing rates

Board considers action June 21st to select financing proposals (Tax-exempt lease purchase agreement and QZABs)

• Pending legal review

June 21st – Board receives contract legal reviews and considers action to authorize finance closing

Questions / Comments

1 Energy Efficient, Operationally Effective, Healthy, High Performance Schools = Goal Investment Grade Audit Summary June 7, 2011 Keven Ward, Public Sector.

Documents

summary fiscal

financial summary

investment grade audit

project developer

turner usd

ingersoll randtrane

preliminary analysis

energy performance contract