Claremont Secures Contract for Renovations
Claremont — Financing for the Johnson Controls energy-savings performance contract has been secured, Stevens Renovation Committee Chairman Dave Putnam said at Wednesday’s committee meeting.
“Johnson Controls will be funded,” said Putnam, telling the committee he got a call just minutes before the meeting that SunTrust Bank of Atlanta, Ga., had approved the loan.
“I am very, very relieved. It is a nice present for Claremont,” he added.
The contract includes a wood pellet/propane boiler at Stevens High School, and energy upgrades at other district schools.
Putnam said the term of the loan is 15 years and five months, which is less than the 20 years the school district originally said was needed in order to realize the guaranteed savings through the Johnson Controls contract. The interest rate is in the 3.7 percent “range,” Putnam said.
Steve Horton, the school district’s representative on the project, said at Wednesday’s meeting that five more months on the loan will provide an additional $400,000 in savings over 20 years and allow for the installation of new windows throughout Stevens as well as new wall insulation.
“We hope to have the money in two weeks,” Putnam said. “They want to close before the end of the year. We know it is going to get done, it is just the paperwork.”
Replacement of the heating system at Stevens will likely begin after the first of the year.
The guarantee under the Johnson Controls energy-performance contract is that the savings in fuel and electricity costs, realized by installing energy-saving equipment, will cover the annual loan payments and provide additional savings.
The $3.6 million contract with Johnson will also have to be reworked to match the reduction in the length of the loan from 20 years to 15 years and five months, Putnam said. The school district has signed the contract but until a “letter to proceed” is issued, it has no obligation to pay Johnson Controls.
Originally, after voters approved a warrant article last March to enter into a lease/purchase agreement with Johnson, the district was looking at a roughly $6 million contract. But when interest rates suddenly went up and the school district was unable to find a lender willing to provide a 20-year loan, the project was pared to about $3.7 million.
Horton said the extra savings above the money to repay the loan has been included in the $10.8 million construction budget. The district was counting on additional savings to install new windows in three sides of the building. Money for the south side is included in the $12.6 million renovation work now under way at the school.
Patrick O’Grady can be reached at email@example.com.