The Dobbs Ferry school district recently begun a $2.7 million project to modernize its utility infrastructure. As part of the 15-year performance contract with Honeywell International, the district will replace boilers, upgrade lighting, weather-seal buildings, replace the middle school’s air conditioning system and make other upgrades to heating, ventilation and cooling systems in all buildings. The improvements, to be completed sometime in September, are meant to lower the district’s annual energy bills, but the key feature of the project is that it’s not supposed to cost taxpayers anything. Zilch. Zero. Nada.

How? The district is financing the project through a 15-year loan with a 3.78 percent annual interest rate. However, officials expect to get all the money back in energy savings, increased state aid and lower maintenance costs.

The lease for the new equipment requires the district to pay the bank $233,819 a year over the next 15 years, Sylvia Fassler-Wallach, director of finance and facilities, said this afternoon.. However, by the district’s calculations, the upgrades will reduce utility costs by $105,696 over the next 18 years. Because the project was voter-approved, state aid will cover 37 percent of the project cost, Fassler-Wallach said. That nearly $1 million in extra aid will be paid out over 15 years, she said. The district also expects to save $50,000 a year in maintenance costs it now pays for its old systems, Fassler-Wallach said. All of those savings will offset the cost of the project, she said.

Doing the math (pay attention this part is a little tricky):

Annual energy savings: $105,696
Annual extra state aid: $66,600
Annual maintenance savings: $50,000

That adds up to $222,296 a year in savings and state aid, about $11,000 less than the district’s annual loan payment. However, the energy savings are guaranteed over 18 years, so the district can expect an additional $317,088 in energy savings in the three years following the expiration of the performance contract. Spreading that over 15 years, gives an additional savings of $21,139 a year, for a total annual savings of $243,435, or about $10,000 more than the annual payment on the bank loan.

That all adds up to a free infrastructure upgrade with money to spare. Honeywell even guarantees in writing that the energy savings will offset the lease costs. If for some reason the savings don’t cover the annual cost of the loan, Honeywell is contractually obligated to make up the difference, said Fassler-Wallach, who previously worked as director of finance in the North Salem school district.

Through energy savings, maintenance savings and state aid “the district will be made whole,” she said. “This is a state education department-approved project. The state wouldn’t have approved it if it wasn’t at least break-even.”

Without breaking out the cliche of “there’s no such thing as a free lunch,” this project will be one to watch closely. Taxpayers in the nearby Greenburgh Central 7 school district, as well as the Eastchester and Valhalla school districts, know all too well that promises of free improvements – in those districts cases, athletic fields – can end up costing a lot more. About $600,000 more to finish the project in Greenburgh, for example.

We’ll keep you posted as the Dobbs Ferry upgrades continue throughout the summer.