ERIK SANZENBACH / L’Observateur / February 5, 2000

RESERVE – A controversy erupted at the St. John Parish School Boardmeeting Thursday over a performance contract for making parish schools energy and operationally efficient.

Nathan Stein, the school system’s director finance, told the board that after soliciting proposals for a performance contract the Auxiliary Committee, which handles maintenance and technical matters, and the Finance Committee both recommended the administration negotiate a performance contract with Siemans Building Technologies Inc. In order to do this, theadministration needed the approval of the School Board to enter into negotiations.

However, despite testimony by Siemans and the administration, several school board members felt they were being forced into selecting only one company and they didn’t think the matter should be voted on at the present time.

The performance contract would allow Siemans to come in and retrofit all the schools and administration buildings so that all lighting, air conditioning and other areas of power consumption would run more efficiently. This wouldbe done with various digital control systems, computers and software.

Stein said this would save the school system money and would be cost neutral because the savings in energy and operations would end up paying for the improvements.

The administration said that to pay for the retrofiting, the board would have to borrow the money. Siemans basic proposal would cost the school system$1.96 million.Board member Leroy Mitchell was leery about approving the negotiations with Siemans.

“We have not approved Siemans as the company we want,” Mitchell said.

The board then decided to put the resolution into two parts. First to vote toapprove Siemans, then to approve the administration enter into negotiation with Siemans.

Before the vote, Pete Muller, representative of Energy Masters, the other company considered for the performance contract, addressed the board with what he thought were problems with the selection process.

First of all Muller wondered why the board went with the higher price of Siemans when Energy Masters had proposed a lower price. He also statedthat Siemans had an escalation clause in its contract that would raise the price of its services by 3 percent every year for its 10-year contract.

“I understand you are having a hard time giving a three percent raise to your teachers,” claimed Muller, “How do you expect to pay the escalation clause?” Herman Clayton, president of the St. John Employees Association and chiefelectrician for the school system had other concerns about choosing Siemans.

He was upset, because as a member of the Maintenance Department, he was not consulted about what the administration wanted.

“No one took our advice and asked us what we think,” said Clayton.

He was not very impressed with the Siemans people.

“Information at both the Auxiliary Committee meetings was very vague,” Clayton, “and we didn’t get any technical information.”Clayton told the board that he was not against saving money and making the school system energy efficient.

“But we should sit down and take our time,” he told the board. “There is nobig rush on this. We need to know who we are dealing with for the next 10years.”Matt Ridley, the Siemans representative at the meeting, said the prices of the two proposals were different because of the different visions of the two companies.

“We will put in a half million dollars of digital control systems into your schools,” said Ridley. “You cannot get something better for cheaper.”He went on to say Siemans has performance contracts with over two-thirds of the schools in Louisiana while Energy Masters have never had any experience with schools.

Hey added that Siemans has local offices in Kenner and St. Rose, whereasEnergy Masters is based in Kansas City, Mo.

Under a terse cross-examination by board member, Felix LeBoeuf, Ridley said the School Board could buy equipment from anybody else and Siemans would train school system employees on all equipment. Plus, after 10 years, all thecontrol equipment will belong to the board.

Superintendent Chris Donaldson visited several other school systems that used Siemans technology and was impressed with the savings. In his visits tothe Tangipahoa, St. Charles and Terrebonne Parish school systems he wastold there was an average savings of $280,000 a year.

“If we can improve air quality and save money,” Donaldson told the board, “then I recommend approval of this contract.”But board member C.J. Watkins still had doubts. “We are cutting out one company and guaranteeing another the contract without any negotiations,” said Watkins. “We have no comparison here. I havenot been provided any information that Siemans is the best value. This justdoesn’t seem like good business sense. Let’s look at it closer.”Board member Gerald Keller responded, “We have to do what is good for the school district. Performance contracts don’t need bids. Besides, if we don’tlike Siemans we can tell them goodbye and find somebody else.”James Madere backed the resolution.

“Our physical plant is in deplorable condition,” Madere said. “Just in themechanical upgrades I favor Siemans. We truly need an energy program. Weare wasting money right now. We need to negotiate.”Finally, board member Patrick Sanders, a member of the Auxiliary Committee, said there were a lot of technical questions that needed to be asked.

“If we vote to negotiate with Siemans, we are giving them exclusive rights,” Sanders said.

Sanders then made a motion to table and bring both companies back in to present their proposals to the whole school board before deciding.

The motion passed 7-4 with Madere, Matthew Ory, Keller and Richard DeLong voting against it.

“I have to go along with the administration,” said Keller, explaining his nay vote. “I want to go along with them. However, I don’t think they did a good jobof defending the motion.”The performance contract will probably be handled in a special school board meeting to be called sometime in the future.

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