Company’s focus on finding savings helps schools
Arizona’s record summer heat and intense winter cold hit schools’ utilities budgets hard, so many districts have become more energy efficient and some have sought help from experts to find more savings.
“School districts are very energy efficient and energy conscious,” said Chuck Essigs, director of governmental relations for the Arizona Association of School Business Officials. “A lot of districts have put in solar. They’re putting in high-efficiency lighting and high-efficiency heating and cooling systems, because any savings that they can get on their utilities costs gives them money to put into education programs.”
For example, Crane Elementary School District has lowered utility costs by monitoring the use of utilities, restricting the use of facilities and using energy-efficient products, said Jennifer Bosch, director of finance for the Yuma school district that serves more than 6,400 students.
“Any way the district can save money and be more energy efficient will benefit the students and employees of the district in the long run,” Bosch said. “Budget costs year after year are beginning to affect every aspect of the district’s budget so every little bit counts.”
Crane has found less technical ways to lower their bills as well. Cost Control Associates, Inc., has helped the district and more than 500 school districts and local governments in Arizona and nationwide find ways to save on their telecommunications, cellular, utilities and waste removal costs by analyzing their bills.
“Cost Control Associates helps school districts by analyzing their existing utilities bills,” said Keith Laake, president of the consulting firm. “We look for errors, overcharges, inappropriate rates and potential refunds. We also review services to be sure the district is getting not only what it pays for but also that it is not paying for unnecessary services.”
This is important because school districts pay significant amounts for utility costs, Laake said.
Cost Control Associates found ways to save Crane Elementary School District money in telecommunications and energy services, and “they are still currently reviewing the accounts and finalizing the information, but the district will save a little over $20,000 annually, almost $100,000 over a five-year period,” Bosch said.
“Invoices are highly detailed, and it’s easy to miss something,” Laake said. “Our analysts know what to look for and they know the right questions to ask when they contact each utility for more information. Recurring errors, incorrect rates and unneeded services can add up to a lot of money that the school district leaves on the table.”
Impact on funding
In the 1990s, the Arizona Legislature approved a program that provided state funding that districts could use if their utilities costs increased at a higher percentage than their budget did, Essigs said. Districts raised the additional dollars through local property taxes.
But the program was phased out in the early 2000s as one of the provisions of Proposition 301. It hit school district budgets hard, because they had to find money to cover those costs from another place in their budget, Essigs said.
“When that went away, the reduction to Arizona school districts’ budgets was around $80 million,” Essigs said. “One of the arguments for eliminating it was well, now the Legislature’s going to fund inflation every year with Prop. 301, which they didn’t until school districts won the lawsuit.”
“This means that school districts have to bear the brunt of increasing utility costs without full state funding,” Laake said. “I can’t think of a better time for school districts to want to be sure their invoices, services and rates are correct.”
Cost Control Associates works on a contingency basis, so school districts only pay if the company finds something, Laake said.
“There are no up-front fees. Cost Control Associates simply shares in the savings and refunds after the school district has received them,” Laake said. “If we find nothing, the district pays nothing,”
“More than 90 percent of the time, we find that our clients are paying too much for their utilities,” Laake said.
Refunds and cost-savings can range from a few thousand dollars to hundreds of thousands of dollars, and every situation is different, Laake said.
“We saved Gilbert Public Schools more than $40,000,” Laake said. “Why would you pay more than you need to?”
Many organizations rely on their facilities departments or other units to manage utility costs in addition to other duties, Laake said.
“As diligent as your employees are, they are probably not utility experts,” Laake said. “We do this kind of work day in and day out, and we know what to look for. Our experts have the industry knowledge to push harder for answers from utility vendors. In the end, that pays off with savings for you.”
“There are other firms that provide services that appear to be similar to ours, but most firms do not have the same depth of technical knowledge and resources to maximize refunds and cost savings,” Laake said. “Based on competitor data gathered from a public procurement, Cost Control Associates’ findings per client are more than six times that of our nearest competitor.”
Those results and quality service have been key for Arizona school districts who have used Cost Control Associates’ services.
“Cost Control Associates has been a great company to work with, easy to communicate with and is eager to find ways to save the district’s money,” Bosch said.