Board approves up to $8.6 million in refunding bonds to finance ESIP II energy projects

The West Windsor-Plainsboro Regional School District Board of Education voted unanimously to approve a refunding bond ordinance that allows the district to sell up to $8,600,000 in bonds to finance a second phase of energy savings projects (ESIP II), district financial staff said at the board meeting.

District finance adviser Dr. Christopher Russo told the board the bonds would fund a package of energy conservation measures—new solar arrays, HVAC replacements, boilers, ventilation optimization and building envelope work—and that the debt service would be paid from projected energy-cost savings. “There will be no tax increase,” Dr. Russo said during his presentation.

Board members were told the ordinance allows financing terms up to 20 years. Dr. Russo said the longer term is supported by the inclusion of generating assets in the package and by projected project performance. He added that, with current market conditions, issuing bonds is expected to be more cost-effective than a lease: “Recent lease rates have been in the mid 4% range compared to bonds that are in the mid 3% range. Over the term of the loan, of the 20, that's approximately a million dollars in savings on interest.”

Why it matters: The financing backs ESIP II, a follow-on to an earlier district energy project (ESIP I) that generated performance rebates and incentives. Board members and staff said much of the incentive pool supporting ESIP II is already earned or contractually due from the prior project, reducing the net financing need.

Scope and projects - Principal bond amount: not to exceed $8,600,000, with sale expected in June (final sizing and term to be set at sale to optimize marketability), the district’s adviser said. - Incentives and rebates: about $1,890,000 in incentives and rebates were cited; $1,030,000 of that was identified as coming from Schneider Electric (the district’s energy-services contractor), and roughly $750,000 is described as additional New Jersey performance rebates tied to ESIP I. Dr. Russo said about $1.78 million of that $1.89 million is generated by rebates already due to the district. - Project elements described by staff: Morris Hawk Elementary — full HVAC replacement except a recently upgraded wing; Grover Middle School — replacement of four rooftop units over the gym; Village Elementary — replacement of two boilers; districtwide ventilation optimization (including bipolar ionizers); building envelope weatherization (caulking, weather stripping, soffit sealing); High School North — a micro combined heat-and-power unit to support space and pool heating; new solar carports at High School North, Millstone River, High School South and Morris Hawk (staff said carports will be placed over parking lots).

Limitations and grid capacity Staff and the district superintendent said limitations in the local electric grid prevented including two schools (Village and Grover) and a Town Center roof in the current package; those projects were not approved by the utility for this phase because of local capacity constraints. Dr. Russo said those sites could be candidates for a later ESIP (described as ESIP 3) if grid capacity or approvals change.

Questions and public input Board member Dana asked whether any federal rules could affect the bonding; Dr. Russo replied that most incentives cited are already earned or issued based on the prior project and that the remaining incentives from utilities (PSE&G and JCP&L) are likely secure. When asked how many district facilities might become energy-neutral after ESIP II, Dr. Russo said “approximately 4 or 5,” depending on final project scope; he said including the schools dropped for capacity reasons could raise the number to 7 or 8.

Public comment on the refunding bond ordinance was opened and no members of the public spoke during the allotted period; the board proceeded to a roll-call vote to approve the ordinance.

Vote and next steps The board approved the refunding bond ordinance on a unanimous roll-call vote. Board members were told the bonds will be sold later in June and that final bond documents will specify the precise term and amounts to make the sale most marketable for the district.

Votes at a glance (other routine board actions at the same meeting) - Approved administration items 1–7 (motion moved by Dana; second Louisa). Roll-call approvals recorded. - Approved finance items 1–12 (motion moved by Luiza; second Ajanta). Roll-call approvals recorded. - Approved personnel items 1–2 and the personnel addendum (motion moved by Dana; second Pooja). Included retirements approved for Barbara Whitner (Millstone River music teacher, 32½ years), Donna Matthews (central office secretary, 21 years) and Christine Capasse (director of data, assessment and accountability, 17 years). - Approved Board of Education minutes from March 13 and March 18 (motion moved by Shweta; second Liz). Roll-call approvals recorded.

No items for curriculum and instruction were on the agenda.

What the board said Dr. Christopher Russo (district financial adviser): “There will be no tax increase.”

Dr. Russo on relative financing costs: “...that's approximately a million dollars in savings on interest.”

Context note: ESIP II follows a prior, district-approved ESIP (ESIP I) whose performance and incentives were repeatedly referenced by staff as underpinning the financing strategy. Board members emphasized that inclusion of generating assets (solar and combined heat-and-power) and the demonstrated performance of the prior ESIP were the rationale for longer financing and for pursuing a municipal bond sale rather than a lease.

Taper: Board members approved the ordinance and routine consent and personnel items and closed the meeting after recognizing staff accomplishments, including the district social media manager Ivy Harrington being crowned Miss New Jersey; board materials say the bonds will be sold in June and district staff will return with final sale documentation when available.