I promised last week to weigh in on the proposed Energy Education Inc contract. For the uninitiated, Energy Education Inc is a consulting group out of Texas that has made a proposal to RUSD that will help cut our energy expenses. Actually the proposed deal is not a bad one; we will be (unfortuntately) adding 2 more administrative positions and paying a hefty consulting fee but the savings in energy costs ARE guaranteed.
For example, the 1st year projected savings will be approximately $700,000; after paying the 2 Energy Manager salaries (2 positions @ approx $75-80K) and the consulting fee of $170K, we would still net about $300,000 in savings. In the unlikely event that our savings did not cover our expenses, Energy Education would pay us the difference. It does sound like a win/win situation, so why should I have a problem with it?
I have a problem with how the deal was made, not the deal itself…
First off, according to Mr. Alioto, the consultant acting as our COO, Energy Education Inc contacted US (not the other way around). If this is true (and I would imagine that it is, since he said this in an open meeting last Monday), why are we paying Mr. Alioto and company a bonus on the projected savings? It’s not like they discovered the savings, or even sought out the expertise of Energy Education, Inc.
Secondly, when the information was presented to administration last spring, Frank Johnson (former legal counsel to RUSD) noted that because it was an energy contract, there are laws that state that the deal has to bid out in an open bidding process. This is, of course, after the fact. I imagine there was some dissent because the district sought another legal opinion. There was finally a decision to bid the job out.
It was explained to me that RUSD sent an RFP to companies that deal with energy saving at the “facility” level, Energy Education deals with energy savings at the “people” level (which is what the Finance team is urging the district to do).To no one’s surprise, Energy Education Inc came through as the desired vendor.
Somewhere, sometime, and some how this administration needs to learn to do their homework and research before (and not after) making a commitment (even a tentative one).
How long will we continue to let decisions be made without any real financial analysis?
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