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By Racquel Palmese

There are approximately 133,000 schools in the U.S., with 10,221 of them, serving more than 6.2 million students, in California. Seventy-one percent of classrooms in the state are more than 25 years old and in need of repair or upgrading. As the economy forces school districts to slow their new building plans, they are focusing, at least for the time being, on their existing facilities, doing what they can to implement energy and water efficiency projects, installing renewable energy sources and greening their everyday operations.

It’s no longer debatable that even modest sustainability upgrades save money, and that savings can go into a district’s general fund. The “Catch 22” at present is that finding the funding to pay for saving money can be difficult. Creative financing options are needed, and Green Technology is working on a special project to document innovative financing options for green building, energy efficiency, renewable energy, water efficiency and the myriad of other sustainable aspects of building and running schools and community colleges.

 

Traditional Funding Still the Norm

Traditional funding mechanisms, such as passing general obligation (GO) bonds during elections, are still the most accepted way to raise money for capital improvements. In spite of an ailing economy, in the June 2012 primary election almost two-thirds of school bond measures passed, totaling over $1.9 billion.

Things are a little sunnier for school districts so far this year. According to Ballotpedia, 23 bonds out of 34 proposed bond were approved, and there’s still another election in November. By way of comparison, in all of 2011 there were only 10 bonds up for vote and 7 approved.

 

Matching Funds

School districts that raise bond money for school construction usually ask the State for matching funds. A state-wide school bond is expected on the 2014 ballot, which would enable the Office of Public School Construction to provide districts with matching funds of 50 percent on approved new construction and 60 percent on existing school remodeling projects.

 

Giant Construction Projects

Right now, the Los Angeles Community College District’s massive building program is coming out of a slowdown imposed after contracting problems surfaced. According to Tom Hall, director of Facilities Planning and Development for the district, approximately $2.7 billion in construction projects were slowed or halted during moratorium.

“Things are loosening up now,” he said. “We have $1 billion in projects going on right now, and there’s another $1 billion in the queue that will be released soon.”  Hall said there will be need for suppliers in all areas, from furniture to design and construction.

The Los Angeles Unified School District, which mandates green building for all its new schools, is now winding down a multi-year, $19.5 billion school construction and modernization program, the largest in the nation. But another tidal wave of capital expenditures will be rolling in within the next few years. In October, 2011, according to minutes of the Los Angeles Board of Education’s Governing Board of the LAUSD, “the majority of the approximately $3.5 billion that remains to be expended has been allocated to Board approved projects yet to be completed, including 21 new K-12 school projects, four K-12 addition projects, approximately 2,000 modernization projects, two new early education center and expansion projects, two new adult education projects and 270 capital improvement program reserve (CIPR) program projects.” About $190 million of the current bond program funds remain to be allocated.

“Currently” says the Board minutes, “$675 million of local Measures R and Y bonds and $7 billion of local Measure Q bonds remain to be sold.” But Shannon Haber, a facilities spokesperson for LAUSD, said there are no immediate plans for issuing these bonds nor is there a timetable for future projects.


Tremendous Need for Financing Innovation

While 22 school districts and 1 community college district held successful bond campaigns so far this year, and there are some significant ongoing construction projects, the rest of the remaining 1,100 school districts and 71 community college districts in California will be needing to come up with ways to green their buildings and campuses.

State Superintendent of Public Instruction Tom Torlakson hopes that school districts throughout California will be thinking green when it comes to new buildings or makeovers. In his September 2011 Schools of the Future report, he stated, “We cannot educate the next generation of students in schools that are relics of the past.” Torlakson put together a team of over 90 stakeholders from schools, architectural firms, colleges, construction manager organizations, unions, builder associations, energy firms and other businesses to craft a Schools of the Future (SOTF) initiative.

SOTF’s 92-page report calls for far-reaching sustainability solutions to new schools and existing school upgrades, and it focuses throughout on the overriding question of how to pay for them. The very first priority recommendation suggests creating “the next state facility funding program to leverage multiple sources of funding, reconstruct and upgrade existing school structures, and advance 21st century design through sustainable and innovate features.”  

The second recommendation calls for aligning “future state school facilities funding with state sustainability goals, including modernization/rebuilding existing schools and funding for local educational agency (LEA) master planning.”  In fact, all the recommendations – modernization, funding and governance oversight, high efficiency schools, renewable energy and grid neutrality all point out the need regulatory or programmatic changes and providing sufficient funding.

Clearly, innovative financing is running neck-in-neck with technological innovation when it comes to green schools. The details of the very first recommendation seek to “create and incentivize priorities, definitions and formulas within the next state bond program that a) leverage multiple sources of funding in a community b) re-construct and upgrade existing school structures, and c) advance 21st century design through sustainable and innovative features which are key to building high performance schools.

If SOTF’s recommendations are adopted widely, all future school facilities bond measures and Department of Education regulations will be aligned with the state’s sustainability goals. In its report, the subcommittee on Financing of High Performance Schools Policy dug deep into the issues related to school financing of energy efficiency upgrades, renewable energy and “clean fossil fuel.”  Public schools, says the report, will play a big part in helping meet the goal of 33 percent of California’s electrical energy be provided from renewable resources by 2020 that is set out in these goals.

Recommendations by the sub-committee capture the spirit of opening up the state’s stringent school financing regulations. The state “should not limit new financial tools and access to capital for schools based on the school’s energy needs” says the report, “but instead should create financial tools and incentives that result in the maximum energy efficiency and renewable generation by public schools.”

 

Helping Schools Get there

To help schools get there, the sub-committee had five recommendations, such as expanding the Public Goods Charge on utility bills, utility surcharges dedicated to a revolving loan fund for school energy efficiency projects, revenue bonds, State general obligation bonds, private investment funds and authorizing school districts or local JPA (joint powers authorities) to issue local revenue bonds.

The sub-committee also recommended eliminating net metering caps, so that “energy generated at one site can be shared and credited to other sites and allow the surplus to be distributed to within a school district.”  A third recommendation calls for JPAs and other combinations to engage in energy management activities. Regional energy efficiency and generation opportunities are better than limiting the activity to only a district. If there is a district that has rich sources of renewable energy, for example, a district with less accessibility to generation could provide financial support and receive energy from the districts that are energy resource rich. Local financing is also a recommendation - creating opportunities for expanding public/private partnerships and creating tax incentives for corporations to invest in school energy generation will provide more access to capital.

 

Realizing the Promise of Green Schools

Most of the 23 school facilities bond measures that have just been passed include verbiage about energy efficiency. The tiny Savanna Elementary School District in Orange County has just passed a $28 million bond measure. Its four elementary schools serve 2,400 students, and all the schools are at least 46 years old. Upgrading inefficient lighting and heating, ventilation and air conditioning systems, installing high efficiency building/site management system infrastructure to increase energy-efficiency and water conservation, replacing roofs and plumbing fixtures are on the list of projects to be funded by the proceeds from their bond.

According to Jim Harris, director of Maintenance and Operations and Transportation for the district, “We’re absolutely ecstatic that we’ll be able to complete these programs. It’s the right thing to do, but we also want to cut down costs that we have expended in the past that come out of the general operating budget.” Harris said that the energy efficiency and HVAC systems at his schools are controlled by Honeywell Energy Management, and that the industry standards for operating with an EMS system show a 25 – 30 percent savings on energy costs. That savings goes right back to pay for teachers and books.

Only two school bonds were on the ballot from Orange County. Savanna’s passed, but the other failed. How did the district sell this to their community? “We spent several months reaching out to the community,” Harris said. “We opened our schools to speak to the community in regards to what we wanted to do and why we needed their help. We sent out flyers, we spent weeks calling around. We walked and knocked on doors and talked to community members. It was hard work, but it was worth it.”

 

Solar Installations in the Fine Print

Some of the bonds will cover solar installations, although they are not highlighted. The Sulphur Springs Union elementary school district in Los Angeles County passed a $72 million bond, getting almost 59 percent of the vote. Again, replacing roofs, upgrading or replacing lighting and HVAC units with energy efficient systems are part of the list of projects included. But it took reading a City of Santa Clarita Agenda report on Measure CK to find out that the bond will also fund the development of “green technologies, such as solar energy.”

One community college district bond proposition, Measure C for the West Valley-Mission Community College District in Santa Clara and Santa Cruz was approved for $350 million. According to the Voter’s Pamphlet, the district is installing “energy management systems and energy efficiency systems, including solar power systems, to reduce energy utility costs and return savings to educational programs.”  It also plans to replace existing window systems with energy efficient systems, replace worn out roofs and improve insulation and weather proofing.

The district is also installing “energy management systems and energy efficiency systems, including solar power systems, to reduce energy utility costs and return savings to educational programs” and will replace existing window systems with energy efficient systems and improve insulation and weather proofing.

Three other school bonds in Santa Clara County passed as well: Measure E in the Milpitas Unified School District for $95 million, Measure H for $200 million for the Cupertino Union School District and the Mountain View Whisman School District’s measure G, which will bring the district $198 million. All include funding for energy efficiency and other green projects.

One of the largest bond measures to pass in the June primary election was a $298 million school bond for the Clovis Unified School District. Besides calling for energy efficiency and HVAC upgrades, the district will also use some of the funds for its five megawatt solar installation now in beginning stages.

The two-campus Buellton Union School District expects that the $3.2 million being raised from an 11-year extension of its school bond will save an estimated $100,000 in annual electrical costs, and digging wells for their irrigation water will save between $60,000 and $80,000 a year. Part of the district’s plans will be installation of solar panels on both schools, with a hope to eventually get off the Pacific Gas and Electric Company grid.

 

An Economic Imperative

It is not surprising that green attributes such as daylighting, improved acoustics and better indoor air quality have been demonstrated to have a significant positive impact on students and teachers. Even at a time when funding is restricted, the economic arguments for investing in green schools are equally strong.

As Rachel Gutter, senior manager of the Education Sector of the U.S. Green Building Council, has put it, “Green schools create a healthy environment that is conducive to learning while saving energy, resources, and money.” 

With districts realizing that they can save thousands, or even millions, of dollars in energy costs by making their facilities more energy and water efficient, building green schools is no longer a matter of if, it’s a matter of when.

If you have developed an innovative financing scheme for your school’s or district’s sustainability projects, please write to editor@green-technology.org.

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