Proposition S, New Construction, and Performance Contracting

Posted on 05/11/2020
Construction on Hollenbeck Middle School

Proposition S is the Francis Howell School District’s no tax rate increase bond issue that will be on the June 2 ballot. Voter approval of Proposition S would allow the District to borrow money now and in the future to address pressing facility needs at all Francis Howell schools. The multiple construction projects that would result from the passage of the bond issue will also help drive economic recovery in our community. In addition to the low-interest rate bonds issued through Proposition S, FHSD would stretch its capital dollars even further by using performance contracting for specific Proposition S projects.

With performance contracting, the District partners with an energy management company to introduce new energy-efficient technologies to update infrastructure, increase efficiency, and save money without the need for upfront capital. Performance contracts are budget-neutral because project costs are paid for by the guaranteed energy savings realized from the energy optimization projects. The benefits of a performance contract for FHSD include:

• Reducing risk - the contractor takes on the risk of not achieving savings
• Implementing turn-key services - the performance contractor provides all required services
• Financing projects would not affect debt load
• Using state-of-the-art products and services
• Savings at a rate much higher than if the District carries out the work itself

Performance contracting is only appropriate for specific projects that have been calculated to produce the necessary energy savings. Using performance contracting in conjunction with low-interest bonds means the District will be able to replace old equipment, increase the comfort of students and staff, and reduce carbon emissions, all while saving taxpayers dollars.

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