Director of Schools Aarona VanWinkle is hoping a new source of funding can be found to pay for energy upgrades at county schools after the Cumberland County Commission voted not to accept funding from the Qualified School Construction Bond program.

But time is of the essence as part of that project, replacement of the heating system at Cumberland County High School, has already begun and temperatures continue to fall.

"If it gets to 10 degrees, we'll have a difficult time keeping everything as warm as it needs to be," VanWinkle said.

The vote Nov. 16 by the county not to accept the QSCB loan has caused the school system to lose additional grant funding from USDA Rural Development, which had planned to award the system $800,000 Monday. Without the QSCB funding, the school system does not have the required matching funds.

"We had obtained almost $1 million in grants. A portion of that was from Rural Development. That is a supplement grant," VanWinkle said. "We have to get the major part of our funding from another source than that grant."

"We're still looking for the money," VanWinkle said, noting the school system and county finance office were checking with several entities for loans. "We're not through. There's still some avenues that, in the next three weeks, I hope will open up."

VanWinkle said Rural Development had said it would give the school system time to secure new funding before awarding the grant funds elsewhere, and could perhaps even work with the school system on a loan for the bulk of the funding. That loan carries a 4.25 percent interest rate.

The energy efficient project began almost two years ago as the school system saw more and more of its budget going toward utility costs.

"Our intent was to look at projects in our system that would save the most amount of energy and we would get a savings return and apply it toward the project and pay for some capital projects that we needed desperately but didn't have the money for," VanWinkle explained.

The board of education chose to focus on retrofitting lighting in school facilities, automate some of the HVAC systems and install newer, more efficient plumbing systems. Capital projects included window replacement at Homestead and Pine View elementary schools and replacement of the HVAC system at CCHS.

The project cost was estimated at $5.28 million. TRANE, which conducted an energy audit and assisted in developing the energy savings project, has estimated the school system could save $6.25 million over a 15-year period. TRANE has guaranteed a yearly savings, and if the school system does not meet the stated savings, TRANE will pay the difference.

The school system was approved to take part in the Qualified School Construction Bonds program of the Tennessee State School Bond Authority. At the time, it was said the program would provide $2.6 million toward the projects at zero interest. Later, the school system was notified QSCB could be used to cover $4.3 million of the project.

The loan was approved by the county in October, but when VanWinkle and county officials took part in a truth in lending conference Nov. 13, they learned that interest rate had changed.

"With the money market changing like it has, the government lowered it's tax break on the program from 8 percent to under 6 percent," VanWinkle said. "The lenders said they couldn't lend the money if they wouldn't get the 8 percent return. We learned they were going to tack 1/2 percent to 2 1/2 percent interest onto the loans."

The loans also carried several federal stipulations, including provisions for additional fees, penalties and charges if any of the school systems taking part in the program defaulted or failed to follow federal guidelines. The county would also not be allowed to prepay the loan early and would be required to make payments over a 17-year period.

"I understand the concerns," VanWinkle said.

The school system has already begun work on replacing the HVAC system at CCHS. The school's boiler stopped working in the spring and required replacement before cold weather set in.

Currently, a new boiler is in place, but the system isn't fully functional. If temperatures dip below 10 degrees, it will not be able to adequately heat the school.

VanWinkle said if temperatures get too cold to heat the school, she would consider dismissing school, but she hopes to soon have funding in place to complete the project before during the winter break.

The heating project is estimated at $1.2 million.

Bob Scarbrough, 5th District representative, asked if the school system could rearrange its capital outlay budget or fund balance to pay for the heating system. Cindy Randol, finance director, said there was not adequate funding in the capital outlay budget or fund balance reserves to cover the cost.