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A plan to increase the Olean City School District's energy efficiency while reducing operational costs by 13 percent comes with a contractor's guarantee that $42,348 in annual savings will be realized over a decade.

After outlining the energy-performance contract proposal, along with a preliminary study of the district's energy costs and efficiencies, Superintendent Ralph Kerr was authorized by the Olean School Board on Tuesday to seek contractors' offers.

He told the board that Johnson Controls, an energy contractor that the district has employed for past projects, estimates it will cost $762,264 to upgrade lighting, replace electrical kitchen equipment with gas-fueled appliances, and install high-efficiency heater motors and utility-control sensors.

If the board decides later this year to move forward with financing, the local share would be about $128,000 of that amount, but no down payment is needed.

The energy-performance contract could be eligible for 83.2 percent state aid if it is approved by the state Education Department and is not subject to a voter referendum. In addition, Johnson Control guarantees payment of any savings not realized as a result of the project, and additional energy-conservation rebates may be available under a new state program for nonprofit organizations and schools.

Kerr said the district is under no obligation to Johnson Controls, which performed the analysis of the buildings at no cost. The company's estimates exclude the middle school and athletic facilities, which are now undergoing construction in a $29.9 million capital-improvement project. He said that energy-cost savings would begin as soon as the work commences and the district's share of the costs would be financed under a tax-exempt lease-purchase agreement.

The district's financial consultant, Bernie Donegan, supports moving to the next step in the process, he said. Under several scenarios, the project could be paid off in three years or the district could take up to 18 years for repayment using the savings generated.

"It has the potential to be a net decrease (in the tax levy), and the money we save on energy we would be able to use on our own programs," Kerr told the board.

Under a timeline given to board members, a deadline of about Oct. 10 would be set for proposals and an energy contracting firm would be selected a couple of weeks after that date.

That firm would study all of the district's buildings and include some energy work if possible in the buildings now under construction.

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