The Dothan City Schools board approved financing for an $11.9 million performance bond to fund a series of energy-savings upgrades at all district schools. The most attention will be given to Carver School of Math, Science and Technology, Dothan Preparatory Academy, and Selma Street Elementary, which are in need of HVAC repairs. System-wide, schools will be retrofitted with LED lighting.
The energy services contract with Trane is expected to save the district $433,000 a year — a savings guaranteed by the contractor. The estimated savings will help offset the debt, but the board will have to pay the other half — approximately $435,000 a year — with annual capital outlay funds.
At last month’s board meeting, the board authorized the superintendent to enter into a pre-pact agreement of $2.6 million to go ahead and begin working on projects at the schools requiring immediate attention.
When conducting extensive field work and evaluation, Trane revised infrastructure needs for all schools in the system to an estimated cost of $22 million.
The board decided to move forward with the three schools in the most need, while retaining upgraded lighting for all the schools.
“If we don’t do something at Carver and Dothan High, we will be spending some major dollars over the years just to keep them running,” Chief Financial Officer Mike Manuel said to the board at its June meeting. Originally, the board was only going to move ahead with replacing HVAC equipment at Dothan Prep.
“We felt like the need for these additional schools were worth the extra money,” Manuel said.
The board approved a contract in June when the entire project was anticipated to cost $10.6 million, and cost the board approximately $155,000 annually. They agreed in August to solicit bids from banks to finance the majority of the cost for the project. At Thursday’s called board meeting, the board approved a bid from Bank of America for 2.21% over 19 years, which will cost the system over $16 million at the end of the debt’s life.
While the price and burden to the school board has increased significantly since it was initially presented, contract negotiations are not over. Trane must present an investment-grade audit with scope and cost of the project by Dec. 1 to commence contract negotiations.
“Based upon my review of cash flow projections for the next 15 years, the system can absorb the debt service for this issue in addition to previously issue debt,” Manuel said. “However, the board should refrain from the issuance of any further debt with the exception of school buses, until an additional revenue source is obtained.”
The board last year also obtained a $15 million bond for capital improvement projects involved with restructuring and facility upgrades.
The Dothan City school board’s next scheduled meeting will take place on Monday at 5 p.m. at Beverlye Intermediate School.