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Alternate Funding Model Brings Large-Scale Modernization to Small District

North Carolina’s Swain County Schools was a small district with a big challenge. Located in a county shared with the Cherokee Reservation and the Great Smoky Mountains National Park, it meant that only 15% of the county’s land was taxable and could be used in local funding for the district, which includes capital funding. As a result, the district was saddled with ailing big-ticket mechanical assets such as boilers and chillers that were nearing end of life. The risk of systems failure, without recourse due to this unique funding gap, loomed larger each day.

Alternate funding made large-scale modernization possible for a small district

The four school buildings were rapidly aging out of useful or reliable infrastructure. A 30-year-old HVAC system created many headaches, as the buildings were unable to regulate temperatures to create stable, comfortable learning environments for all 2,000 students and over 300 faculty. The lack of funding was hitting critical mass with aging infrastructure outpacing the district’s ability to repair or replace their mission-critical assets.

“We knew we had to think outside the box to address our needs, as the existing channels wouldn’t be enough to cover a single boiler failure, let alone a full-scale modernization. Most of our resources were simply going towards trying to hold the old systems together,” said Swain County Schools Superintendent Mark Sale. “Additionally, this process allowed the school system to partner with the county government for facilities upgrade and not place greater tax burden on the community.”

That’s when Swain County Schools administrators sat down with the team from Schneider Electric to discuss creative funding opportunities and a strategic implementation plan that tapped innovative and efficient technologies.

After listening to the challenges Swain County faced, the Schneider Electric team put together a comprehensive plan that not only addressed the district’s funding challenges, but also provided a complete capital asset planning solution. The key to all of it was an energy savings performance contract, which leverages future energy savings to create funds that can be used for other needed improvements—all with guaranteed savings. The new access to capital and long-term contract for payback with energy and operational savings created the budget stability necessary to move Swain County Schools forward with their modernization.

“At first, I was hesitant to involve external resources in taking over control of our operations and asset planning. But after working with Schneider Electric, I wished we’d have done it ten years ago,” said Randy Arvey, Swain County Schools’ recently retired Director of Maintenance.

Sale added that Schneider Electric’s collaborative approach helped make the process easier. “The Schneider Electric team were flexible and worked with our needs,” Sale said. “The performance contract was a much more collaborative approach than other construction projects we’ve done. We thoroughly appreciate the constant communication from Schneider Electric.”

From cash-strapped repair schedule to a fully self-funded $2.4 million energy infrastructure project

Considering all the district was able to do with the performance contract project, it’s no wonder both Sale and Arvey were so pleased.

With energy improvements that equated to an average annual savings of $174,000 over 18 years, along with energy rebates the Schneider Electric team discovered a district that previously hadn’t been able to cover the cost of a single boiler replacement, suddenly had a windfall of almost $2.4 million to spend on desperately needed upgrades. Those included:

  • Two new chillers
  • Two new boilers with propane conversion
  • Two new heat exchangers with DHW tank and propane conversion
  • BAS upgrades & optimization
  • Interior & exterior LED lighting
  • Water fixture re-commissioning
  • Building envelope improvements
  • Plug load controllers

Additionally, the team put together a capital asset plan to prevent aging portfolio issues in the future. The capital asset planning process catalogs every piece of equipment, down to serial numbers, and helps to proactively forecast what kind of repair work or replacement schedule is necessary to ensure optimal operations. With that plan in place, the team was able to help the district scope out projects necessary to fund fixes and improvements. The Schneider Electric team will also be updating the plan every five years.

“Having that kind of assistance is vital to ensuring that we keep all our equipment running smoothly and ensuring we don’t end up in another maintenance logjam,” Randy Arvey said.

But as important as it was to address the district’s aging mechanical equipment, what the district came away with maybe even more vital.

“What’s really great is that we found a partner that listened to us and offered solutions we couldn’t have come up with on our own,” Sale said. “We had really big funding challenges, and the Schneider Electric team gave us equally big solutions.”

As of May 2022, after a year of implementation, the district is seeing greater savings economically and environmentally than they had anticipated. To date, the district has saved 15% more in energy and operational costs than predicted. They’ve also reduced energy consumption by 916,040 kWh and carbon emissions by 1,253 tons.

This guide will help superintendents, presidents, city officials and facility managers discover how to create and fund Healthy Buildings.