Claremont School Proposal Raises Conflict Issue for Chairman
Claremont — Residents in the Claremont and Mascoma Valley school districts will vote March 12 on what seems at first glance to be the proverbial win-win: proposals to install new boilers and other school energy upgrades at no net cost to taxpayers. Advocates say the improvements might even generate savings.
Under the proposals, Milwaukee-based Johnson Controls would guarantee that energy savings would be equal to or greater than annual payments to the company, thus having no impact on the tax rate.
But discussion of the proposal in Claremont has recently been clouded by the revelation that Johnson Controls is a significant donor to the non-profit student organization where the Claremont School Board chairman is the chief financial officer.
Claremont School Board Chairman Richard Seaman is the CFO for the Student Conservation Association in Charlestown. Since 2006, Johnson Controls has donated anywhere between $200,000 and $600,000 annually to a conservation association program aimed at helping inner city youth, Seaman said, adding that the donations amount to less than 1 percent of SCA’s annual revenues.
“They have been donating to SCA since 2006 and to a very specific program in which they support youth conservation work in three cities: Milwaukee, Detroit and Baltimore,” Seaman said. The program “gives opportunities for environmental education, leadership and job training.”
On his “Sullivan Report” website, Claremont gadfly and former City Councilor Jim Sullivan raised the question of whether Seaman had conflicting roles as a public official supporting the Johnson Controls energy plan and as a private CFO accepting donations for the education project. To avoid even the appearance of impropriety, Seaman said this week he would recuse himself from any further discussions about Johnson Controls.
“It never occurred to me that this would be considered a conflict of interest,” Seaman said in an interview with the Valley News. “But I understand why some would think it is, so I will take myself out of the discussions going forward.”
Sullivan’s report caught the attention of Mayor Jim Neilsen, who questioned why Seaman had not brought his outside connection with the energy company forward on his own.
“It creates a sense of distrust because none of this was revealed,” Neilsen said, adding that he is not trying to “sink” the project but believes Seaman should have been more forthcoming.
Seaman bristles at the implication he is pushing the Johnson Controls proposal because of the donations to SCA.
“This is just another piece of bulls--- to come out from Sullivan,” Seaman said. “Why is it that they want to make things up? This group wants to keep Claremont caught in the past and insinuate every transaction is underhanded,” he said, referring to those who write anonymous comments on Sullivan’s forum page.
“If people want to say it was poor judgment on my part, I accept that. But what troubles me is when they want to hold back the city,” Seaman continued. “This is a stellar deal and it stands on its own.”
Seaman said that at next week’s School Board meeting, he will explain the circumstances and announce his recusal. He said it never occurred to him to disclose the information because there is no connection between what the school district is trying to do and the SCA program.
“We need to evaluate it (the lease/purchase) on the merits and what it does for Claremont.” Seaman said. “It gives us the opportunity to upgrade systems that we have not been able to get support for in our budget. If we don’t do this, we will still spend the money on utilities.”
Stevens High Renovation
This year, voters in the Claremont and Mascoma districts will decide whether to move ahead with major high school renovation plans. They will also face related questions on the energy-saving proposals from Johnson Controls.
Mascoma’s two articles are related in the sense that if the $21.8 million school bond passes but the $2 milion in energy proposal fails, the cost of the upgrades would for high school and middle school will be folded into the approved bond.
The votes are more straightforward in Claremont. There, the $12.6 million bond to renovate Stevens High and the $7 million lease arrangement with Johnson Controls stand as separate items.
At Mascoma, Johnson would upgrade lighting, insulation and windows and install wood-burning heating systems for all four district schools. In Claremont, Johnson would install wood pellet/propane hybrid boilers at Stevens High School and add insulation, windows, heating systems and other improvements at the district’s three elementary schools and the middle school.
School Board member Brian Rapp had a mixed view on news of Seaman’s dual roles.
“I think the way it was revealed was an attempt to jeopardize the vote,” Rapp said. “But I will also say I am disappointed we weren’t made aware of it by our chairman. I realize (SCA) deals with a lot of companies but I am disappointed he didn’t recognize it could be an issue.”
Still, Rapp said Seaman has given the board strong leadership and he would oppose any calls for him to step down as chairman. Long-time board member Dave Putnam wonders how anyone could suspect a quid pro quo between SCA and Johnson. SCA works with Department of Education and many organizations that have to do with children and education, Putnam said.
“It is such an incredible stretch of the imagination that there could be any collusion between Johnson Controls, SCA, Richard Seaman and the Claremont School District. It is beyond any reasonable person’s imagination,” Putnam said.
Even if Claremont voters approve the 20-year, $7 million lease/purchase agreement, that does not mean the school administration must follow through with a contract, noted Ned Raynolds, account executive with Johnson Controls in Manchester, N.H.
“They don’t have to enter into a contract if it is not a good deal,” Raynolds said. “The vote does not obligate them to go forward.” It would simply authorize district officials to sign the deal if the promised energy savings made it worthwhile.
A Pitch for Energy Savings
It was not Seaman who first put the Johnson Controls plan on the table in Claremont, officials say.
Former Claremont City Councilor George Caccavaro, who is the business manager for the Mascoma Regional School District, said he mentioned Johnson Controls to School Board member Gene Grumman and a little later to Seaman.
Caccavaro also spoke in favor of the Johnson Controls proposal at the Feb. 6 Claremont school deliberative session, urging fellow voters to pass the article. “You can’t afford to leave $7 million on the table,” he said. “And once the lease is up, it (the savings) goes right to the bottom line.”
Raynolds said his first contact in Claremont was when SAU 6 Business Manager Tim Ball called him. After a one or two email exchanges, Richard (Seaman) joined the conversation,” Raynolds said.
According to Raynolds, Ball had heard about the energy savings Johnson was proposing for the Mascoma school project. He said Claremont officials wanted to build similar energy savings into their renovation plan but faced a “finite appetite on the part of the voters to fund it.”
Because Claremont came to Johnson Controls late, Raynolds said the company’s approach was slightly different than at Mascoma, which began discussions with Johnson in August. Johnson has been servicing Mascoma’s energy equipment for years.
Without time to complete an “investment grade audit” of the buildings in Claremont, Raynolds said Johnson did “some preliminary engineering” that suggested the district could achieve significant savings. “We determined there is efficiencies here that can be harvested. They are spending money that does not need to be spent on energy.”
Claremont officials said they did not have time to seek competitive offers from other energy companies, saying the Johnson proposal looked good and they wanted to get it on the ballot for voters to consider in their March 12 vote.
In the meantime, Ball said this week that school officials are preparing to sign a “performance development agreement” for $75,000 that would allow Johnson to begin an audit to determine if the projected energy savings are realistic, and provide a detailed plan for putting them in place.
“The audit provides a final design of the project including engineering, designs, costs and savings,” Raynolds said.
The level of savings hinge in part on whether voters approve the $12.6 million Stevens High School bond vote, which would include new windows and insulation. “I hope voters realize that,” said Putnam, the School Board member. “How much we do with the windows and insulation will add to the savings.”
Both Ball and Raynolds said if the vote passes but the audit does not conclude it would be a “self-funded project” — meaning the annual savings would at least cover the lease payments — the district would not obligated to undertake the project or even pay for the audit, which takes two to three months.
If the audit does indicate the savings are there, the audit cost would be folded into the lease agreement. “We will have to pay for the audit if the (projected) savings are there but we decide not to go forward with the project,” Ball said.
“If the work (replacing boilers) is done over the summer, we need to start now,” Raynolds said about the detailed engineering study.
According to Raynolds, Johnson Controls has done about 2,500 of these type of performance contracts in schools, hospitals and municipal buildings.
Rutland City schools hired Johnson Controls in 2009 for a $2.3 million project at eight city school buildings.
“It has been very good for us,” said the school district’s chief financial officer, Peter Amons.
Amons said rather than dollars saved, Johnson “guaranteed” annual energy use would be cut by 500,000 kilowatts and 29,000 gallons of oil.
“They have met that and even exceeded it a little,” Amons said. “The deal looks better and better as energy costs go up.”
Rapp said the Claremont board has time to address the issue with SCA but can’t let it be a distraction.
“Unfortunately, this has cast it in a negative light. But we have to move forward and list the reasons this is a great deal for the district, regardless of the controversy or perceived controversy,” Rapp said.
Patrick O’Grady can be reached at email@example.com.