A Possible Solution for Some of Milwaukee County's Deferred Maintenance Projects

Mar 9, 2016

On Tuesday, a Milwaukee County board committee approved spending another $500,000 to help move along repairs to the Mitchell Park Domes. Projected expenses are mounting county-wide for deferred maintenance projects. The cost of saving the domes could run $75 million. And recent estimates put the cost of replacing the aging county safety building at $190 million. While the county faces important choices, there is one option to help government’s lower costs.

The deteriorated condition of the Mitchell Park Domes represents a larger problem facing many levels of government - deferred maintenance, or projects that are put off because of the cost.

Jenny Stentz, general manager for energy and sustainability solutions at Johnson Controls, says there is an option to help deal with the expense – performance contracting. 

“It’s really about being able to identify energy savings and water savings from very old and inefficient buildings and infrastructure that’s within a city or within a county," she says. "And at the end of the day, those energy savings and water savings can be monetized to actually fund the project, which would be reinvesting that wasted savings back into the building infrastructure."

For example, workers will identify ways to be greener and then install more efficient heating and cooling systems. Then Stentz says the performance contractor will guarantee a certain dollar amount in savings.

“What that means is if the energy savings aren’t achieved, then that energy service company has to write a check for the shortfall every single year back to the county,” she says.

Stentz says the unit of government can handle the upfront costs by selling bonds or perhaps a lending institution would pay. But the beauty of it all is, the investment ends up not costing taxpayers.

“I think the key is that it can be financed through the energy savings,” Stentz says.

She says Hawaii provides a great example. “They identified and built a project across 12 of their airports. It was a $150 million project, there were $518 million in guaranteed savings upgrades. So you think that, $518 million of savings that they were paying before that now could be applied toward upgrading all of their airports."

But, you don’t have to go as far as Hawaii to find an example. Milwaukee County has undertaken some projects, so has the city.

Erick Shambarger, director of environmental sustainability for the city of Milwaukee, says back in 2009, the city signed a performance contract to upgrade its safety academy and convert street lights to LED. While he couldn’t remember what the project cost the city, he says it resulted in about $80,000 in savings a year.

Shambarger says one important lesson he learned was to get buy in from everyone involved. “If you save money on how the building is going to be operated and when the heat’s going to kick on and when it’s going to turn off and all those kinds of things, you gotta have support from the people who are going to be in that building because you don’t want to drive complaints."

Across the state, Wisconsin has outpaced its neighbors when it comes to the size and scope of performance contracts, according to Megan Levy. She works for Wisconsin’s office of energy innovations. Yet Levy says there are times when performance contracts are not the way to go.

“Smaller projects, projects that you already know make sense and that you already… you know you want to change out these light bulbs for LED’s. You don’t need to use a performance contractor for that,” she says.

Levy says the savings should be easy to justify to government leaders – and taxpayers.