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Hamblen County board approves industrial-grade energy audit, moves to seek $5 million low-interest loan
Summary
The Hamblen County Board of Education voted unanimously to approve a $343,200 industrial-grade energy audit and signaled its intent to seek a $5 million, 1.5% loan over 16 years to fund energy-efficiency upgrades, with loan payments to be covered by guaranteed savings identified in the audit.
Hamblen County Board of Education members on Wednesday approved spending $343,200 for an industrial-grade energy audit and authorized moving forward with an application for a $5 million state loan to finance energy-efficiency improvements in district schools.
The action came after a report from staff outlining terms the district intends to seek: a $5,000,000 loan at 1.5% interest amortized over 16 years. ‘‘The loan that we're requesting from the state is for $5,000,000 at 1.5% interest over 16 year payout,’’ said Mister Bunche (staff member), describing the proposed financing. He told the board the loan payments would be covered by guaranteed savings identified in the industrial-grade audit and that any additional guaranteed savings would flow into the district's revenues.
Why it matters: the board approved the $343,200 audit (agenda item 10.6) to produce the detailed cost and savings analysis required for the loan application. Bunche told board members the audit cost would be rolled into the loan if the district proceeds, meaning the district would not need to take money from its operating budget to pay the audit if financing is secured.
During the presentation Bunche said an initial conservative estimate is that the district would generate more than $2.5 million in net savings over the 16-year period beyond what is needed to pay the loan. He also said, if everything proceeds on schedule, district staff hopes to start work in schools in September.
Board members discussed the request and voiced support. A motion to approve the industrial-grade audit and proceed with the loan-related steps carried unanimously.
No additional policy decisions were made at the meeting about which specific buildings would receive upgrades; the audit is intended to produce a prioritized, budgeted plan. The audited savings and any guarantees will determine final project scope and the district's required local commitments.
Next steps: staff will proceed with the audit and prepare the formal loan application materials. If the district secures the loan, the audit cost will be included in loan proceeds and staff will return with project-level recommendations and anticipated timelines.
