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Understand, Capture, and Maximize Federal Grants and Tax Credits

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Many school districts are navigating a more conservative budget landscape with increasing operating costs, potential losses of tax revenue, foundational formula funding, minimum teacher salaries, and overall uncertainty of future educational dollars. Two critical pieces of legislation passed at the federal level can continue providing districts with ways to address their various needs without impacting the budget. The Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) are historic in size and provide funding for a broad range of district priorities including energy efficiency and conservation, clean energy, electric vehicles, vehicle charging infrastructure, renewable energy and more.

 

Infrastructure Investment and Jobs Act

Unlike the stimulus and ESSER funding, the IIJA is largely application-based and will be distributed in a variety of ways including block and competitive grants, energy efficiency loans, and formula funding. The varying funding streams provide a wealth of opportunities for school districts so long as applications are filled out correctly and districts have a plan in place to utilize these funds. School districts can act now by engaging partners with expertise in the public sector to secure funding.

 

Programs Specific to Missouri School Districts

There are a handful of programs outlined in the IIJA that are beneficial for K-12 districts, specifically those in rural and/or high poverty communities. Applicable programs are listed below. Renew America’s Schools Grant Program can finance energy efficiency and air quality improvements in schools. The estimated funding for 2024 is $180M with an award range of $7M - $14M. There is a 25% cost share requirement. The first round of the application is due June 13th, 2024. The program website can be found at this link.

Qualified projects include:

  • Lighting
  • HVAC
  • Envelope such as windows, roofs, and weatherization
  • Plumbing
  • Renewables
  • Alternative fuel vehicle infrastructure improvements

The Clean School Bus Grant Program through the Environmental Protection Agency has an estimated total funding of $400M - $1B based on FY23. School districts may receive up to $395,000 per E-bus and charging station combination. There is no cost share requirement. Applications for this program are expected to open this spring and will have a due date of August 2024.

Ferguson-Florissant School District was awarded $7M in funding in FY23 through the Clean School Bus Program. Their award will fund 16 new EV buses, chargers, and electrical infrastructure.

“Schneider Electric’s grant consultant helped us navigate a lengthy and tedious application that enabled our staff to stay focused on day-to-day activities. If awarded, this grant money will further the district’s strategic plan to strengthen our financial and operational stewardship.” says Terry O’Neil, Assistant Superintendent of Operations and Maintenance at FFSD.

Many other districts across the state of Missouri are considering this slow transition from inefficient fleet vehicles, and the CSB and DERA both provide unique funding avenues.

Other programs that are beneficial but not new to many districts include the COPS School Violence Prevention Program, COPS Hiring Program, STOP School Violence Program, and Department of Education School Based Mental Health Services.

Inflation Reduction Act

The IRA incentivizes non-taxpaying entities to invest in solar and traditional efficiency projects. Evergy school districts will experience significant rate hikes with some districts expecting a 25% increase in annual utilities. These increases are causing some districts to look to alternative energy such as solar, and the IRA credits, with an attractive direct-payment option, can help offset the initial investment. The IRA also nearly tripled the allowable credit through the 179D Commercial Buildings Energy-Efficiency program.

Impact for Missouri school districts:

  • 30%+ direct-payment option for renewable energy installation
  • Up to $5/square foot tax credit through the 179D program for improvements including lighting, HVAC, automation, envelope, and others


How to best prepare for the upcoming funds

With the complexities of the IRA and IIJA and the different funding sources they outline, it may be overwhelming to understand how to address infrastructure improvements. We’ve outlined a few steps that will help ensure school districts can get funding quickly:

1. Create Partnerships Early

Finding experienced partners to support your district with the planning, design, and implementation of your projects will fast track approval. It also affords administrators with the opportunity to be strategic and intentional about how the program is financed, implemented, and maintained in the short and long-term.

Energy Service Companies (ESCOs) have the expertise and experience to secure these funds for school districts. ESCOs partner with schools to streamline operations, create stability in the budget, and address deferred maintenance through a long-range facilities plan. Some examples of these opportunities include HVAC, building automation system control, lighting, windows, roofing, weatherization, and water fixture improvements. This collaborative effort is centered around initiatives that best align with district and community goals. Additionally, ESCOs support the project post construction by guaranteeing the energy savings, mitigating the risk for both school districts and taxpayers, while turning one-time funds into a recurring revenue stream.

“Our ESCO has been a great partner in all phases, beginning with the evaluation of potential areas of costsavings to outstanding project management and communication. Finally, they have been very clear in sharing the resulting energy savings of those identified projects,” says Dr. Robert Sigrist, Assistant Superintendent of Business and Operations at St. Joseph School District.

 

2. Prioritize Projects Based on Impact

Stimulus, grant funding, and tax credits should be viewed as one piece of the financial puzzle for schools searching for revenue streams. This often means prioritizing projects that support your district’s vision and objectives in addition to the most-pressing short-term needs, including projects that:

  • Address the concern and complexities of your community, students, and staff in providing tangible improvements that are both seen and felt
  • Deliver a safer and healthier learning environment while creating stability in the budget
  • Tackle deferred maintenance and implement a long-term plan for future priorities

 

3. Build off Existing Priorities

In today’s environment, alternative financing and project delivery vehicles have become ideal ways to unlock funds trapped in your budget and still make critical infrastructure upgrades. There are significant state, federal, and local funds available to help accelerate priority projects. We invite you to simplify your infrastructure plan by working with one partner to improve your entire portfolio. Schneider Electric can help engineer, implement, and guarantee financial success on a wide range of projects that improve your facilities and infrastructure. A comprehensive approach will make it easier to prioritize needed improvements, manage construction, and measure success.

 

For more information, please contact Hannah White, Program Manager, for Schneider Electric or Peter Hinkle, Midwest Sales Team Leader, for Schneider Electric. Email: Hannah.white@se.com and Peter.Hinkle@se.com