Board hears update on $17.7 million Honeywell energy project; firm guarantees $11.7M in savings over 20 years

Honeywell representatives briefed the Garden City USD 457 Board of Education on the status and post-install findings from a districtwide energy-efficiency project the district contracted in 2022. The company said the project covered HVAC, lighting and controls work across multiple campuses and is financed as an energy savings performance contract.

Honeywell said the total contract price in 2022 was $17,700,000. The company told the board about the funding mix: roughly $3.0 million from ESSER funds, about $2.6 million in district capital contributions, and the remainder financed through the performance contract. Jordan Balali, Honeywell senior account executive, told the board the work included variable refrigerant flow (VRF) HVAC upgrades at five focus buildings (Bernardine Sitz, Charles Stones, Victor Ornelas, Edith Sherman and Florence Wilson), lighting replacements at about 14 facilities and a building-management upgrade at those five schools.

Balali summarized the guaranteed savings Honeywell included in the contract: Honeywell projects performance-year-1 energy savings in excess of $230,000 and operational savings (reduced replacement parts and maintenance) of about $183,000. Over the 20-year guarantee term, Honeywell said combined guaranteed energy and operational savings exceed $11.7 million. Balali also described the firm's measurement-and-verification (M&V) program and the contractual guarantee: "If you are not hitting the savings that we're guaranteeing for you, we actually have to cut you a check for that shortfall," he said.

Seglinda (measurement-verification specialist, Honeywell) reviewed the district's post-install conditions report and the building-modeling work completed with an outside modeling contractor. The post-install report documented lighting savings during the construction period of about $142,000, Honeywell said, and the team reported that modeling work required additional validation against actual utility bills because the VRF systems and separated ventilation complicated the models. Honeywell identified the district's last project-acceptance date as April 16, 2024, and set the first measurement year to begin May 1, 2024; anniversary M&V reviews will follow annually.

Board members asked how annual shortfalls would be handled. Balali explained that M&V is evaluated annually and adjustments are made year-to-year; if the district has excess savings in some years, those may offset a shortfall in another year, but a shortfall in a single year can trigger a payment to the district under the contract.

District staff and board members requested more detail about how the guaranteed savings align with the district's annual payment schedule for the project financing; Honeywell representatives said they would provide further breakdowns and offered to run a workshop for board members unfamiliar with the project's initial calculations.

The presentation concluded with contact information for Honeywell's local team and an offer to perform no-cost audits to identify further retrofit opportunities.

Ending: Board members said they want a follow-up briefing that aligns the Honeywell savings reports with the district's financing schedule before relying on the project to cover future debt service.