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WRIGHT TWP. — The Crestwood School Board voted Wednesday to hire a new business manager at a starting salary of $75,000, refinance nearly $19 million owed in debt service (principle and interest) due annually through 2040, and approved an energy savings contract that will cost $8.5 million but guarantees saving $4 million over the first 20 years.
The board replaced long-time business consultant Albert Melone with Peter Bard, currently working at the Weatherly Area School District. Bard said he must give 60 days notice to Weatherly and expects to be able to start working at Crestwood by the end of December or sometime in early January.
The refinancing move does not save money in the long term, School Board Vice President James Costello said after the meeting. It increases overall debt payments through 2040 by total of $602,005. But it does free up considerable cash for the next two years by restructuring payments amounts from 2020 through 2028.
Under the new schedule, the district will pay about $2.8 million less in debt service in 2020 and 2021, helping the district stave of financial shortfalls while it works to stabilize the budget. After that, annual debt service payments will be higher than they were before refinancing from 2022 through 2028, before returning to the current annual payment amounts through 2020.
The energy savings contract is with Siemens Industry Inc. and falls under the state Guaranteed Energy Savings Act, which authorizes such contracts with the company guaranteeing minimum savings. If the all savings don’t materialize, the company must pay the difference to the district.
The contract calls for Siemens to make improvements at the high school/middle school campus and at both elementary schools. The improvements include upgrades in lighting, hot water, heating cooling and ventilation systems, and conservation measures such as building automation and rooftop unit replacements.
The district is borrowing money for the energy contract, a move that will raise total debt service owed through 202o. Here’s the impact on total debt payments through 2020:
Currently the district will pay $18.9 million in debt service over the next two decades. That is being refinanced to free up cash now, but the move increases the total to $19.5 million in debt service. Borrowing for the energy contract further increases the total to $31.9 million, but the savings from those energy changes will bring it down to $27.9 million.