Fall 2022 UPDATE

PURCHASING / FALL 2022

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INNOVATING YOUR PURCHASING PROCESS

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2022 REGIONAL CONFERENCES

Bringing Essential Topics to Districts in Central, Southern and Western Illinois

SPRINGFIELD 26, 2022

EFFINGHAM TAMMY ADVERTISEMENT 27, 2022

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Regional Conferences

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UPDATE Magazine Fall 2022

IASPA Illinois Association of School Personnel Administrators

INSIDE

Illinois Association of School Business Officials UPDATE Magazine / Fall 2022 / v.31 / i.01

PURCHASING ISSUE

Guaranteed Energy Savings Contracts: An Efficient and Viable Procurement Option

THE NEXT ISSUE: RISK MANAGEMENT

Protect Your People: Risk Practices & Procedures

Public school districts in Illinois have several choices for procuring construction projects. Article 19b of the school code governing Guaranteed Energy Savings Projects is one choice. This legislation can be considered when a district is looking to focus on the most critical building components and other energy conservation measures.

Cover Story by Steven Kowalski

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LOOKING FOR PAST ISSUES?

Visit www.iasboupdate.org to access past articles and more!

Making Sense of Energy Prices That Are Costing Your District Dollars Energy purchasing seems to be one of those tasks that school business officials and administrators endure every few years but may not have the time to explore to fully understand all the moving pieces. Having a good understanding of recent market happenings will help give you some ideas on how to navigate and make the best decision for you and your district.

By Becky Thompson

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PERSPECTIVE FROM-THE-PODIUM

Looking at the Positive Side of Forced Changes in Purchasing and Procurement 07

FROM-THE-OFFICE

The Power of Association Collaboration 09

FROM-THE-FIELD

Purchasing: Service Associates and School Administrators Working Together for the Best Value 11

NEW

Membership Bundles

SCHOOL BUSINESS 101

How have you overcome supply chain disruptions?

What has been most difficult to purchase? 19

Every business, regardless of industry, has some form of procurement need. For school business officials, determining the appropriate procurement strategy can often be a difficult task, as there is a myriad of variables to consider.

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UPDATE Magazine Fall 2022

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By Tim Keeley and Amy McPartlin

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Boost Efficiency & Save With Smarter

Cooperative Purchasing There is a need to simplify the procurement process and there are several benefits of utilizing cooperative purchasing. Above all, the use of cooperative purchasing will save districts time and money.

By Jennifer Sulentic

RESOURCES

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Understanding the key strategies for complying with the Illinois School Code can help any school business official pilot even the most-complex purchases.

School districts must strategically plan, navigate the process and meet the demands of stakeholders while achieving the district’s purchasing goals.

By Ken Florey, Howard Metz and Christopher Gorman

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The Final Word

ON MY LIST

Learn why equity work is one of the areas where leaders can have an effect outside of finance and operations in this book review from Myron Spiwak of New Trier Township, HSD 203. 42

Maureen Jones

Assistant Superintendent for Finance & Operations/CSBO Community Consolidated School District 89 Maureen is responsible for most aspects of purchasing.

She manages relationships with service associates, including securing the best price on products. Maureen also approves all purchase orders as well as reviews all p-card purchases. When bids are necessary, She manages the bid process from start to finish, including recommendations to the board.

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THE

MAGA ZINE Illinois Association of School Business Officials

CALENDAR OF

Northern Illinois University, IA-103 108 Carroll Avenue DeKalb, IL 60115-2829 P: (815) 753-1276 F: (815) 516-0184 www.iasbo.org

EVENTS

UPDATE Editorial Advisory Board

Check out www.iasbo.org for the latest Calendar of Events included in the UPDATE mailing to see full seminar listings including location, PDC sponsorship and registration information.

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Date

Time

Location

10/4/22

9:00am

ISDLAF+ School Finance Seminar

Naperville

10/7/22

9:30am

PDC Networking Meeting

Rolling Meadows

10/12/22

5:30pm

2022 Presidents’ Gala

Lisle

10/14/22

8:00am

Support Professionals Full-Day Seminar: LIFO

Lisle

10/18/22

9:00am

ISDLAF+ School Finance Seminar

Peoria

10/19/22

9:00am

ISDLAF+ School Finance Seminar

O’Fallon

10/19/22

8:00am

Facilities Operations Program: Essentials of Maintenance Operations

Arlington Heights

10/26/22

8:15am

Regional Conference: Springfield

Springfield

10/27/22

8:15am

Regional Conference: Effingham

Effingham

10/30/22 to 11/1/22

8:00am

2022 Midwest Facility Masters Conference

Wisconsin Dells, WI

11/18/22 to 11/20/22

8:00am

IASB/IASA/Illinois ASBO 90th Joint Annual Conference

12/2/22

8:00am

2022 SupportCon

Burr Ridge

1/10/23

9:00am

ISDLAF+ School Finance Seminar

Naperville

1/11/23

9:00am

ISDLAF+ School Finance Seminar

Peoria

1/12/23

9:00am

ISDLAF+ School Finance Seminar

O’Fallon

1/20/23

10:00am

PDC Networking Meeting

TBD

1/27/23

9:00am

Leadership Day

Lisle

Chicago

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PDC MEMBERS Karen Hayes Accounting Auditing & Financial Reporting Timothy J. Gavin Budgeting & Financial Planning Maureen Jones Cash Management, Investments & Debt Management Raoul J. Gravel III, Ed.D. Communications Seth Chapman Diversity, Equity & Inclustion (DEI) Wendy Sedwick Food Service BrianK.O’Keeffe Human Resource Management Mindy Bradford Leadership Development Frances A. LaBella Legal Issues Doug Renkosik Maintenance & Operations Michael Eichhorn Planning & Construction Myron Spiwak Principles of School Finance Trevor Moore Public Policy, Advocacy & Intergovernmental Relations Nicole Kennedy Purchasing Justin D. Veihman Risk Management Jacquelyn Bogan Special Education Eric Rogers Sustainability Tony Inglese Technology Kenneth E. Surma Transportation BOARD & EXTERNAL RELATIONS MEMBERS Eric DePorter President Steven J. Kowalski SAAC Chair STAFF MEMBERS Michael A. Jacoby, Ed.D., SFO, CAE Executive Director / CEO (815) 753-9366, mjacoby@iasbo.org Michael Van De Voort Director of Marketing (815) 764-9353, mvandevoort@iasbo.org Craig Collins Statewide Professional Development Coordinator, (630) 442-9203, ccollins@iasbo.org Stacia Freeman Senior Manager of Branding and Communications (815) 762-1177, sfreeman@iasbo.org Kevin Nelligan Graphic Designer (815) 753-7654, knelligan@iasbo.org Russ Coomans Communications and Marketing Coordinator, (815) 762-0265, rcoomans@iasbo.org Chris Harley Membership, Communications and Marketing Coordinator, (815) 762-2048, charley@iasbo.org

Illinois ASBO Board of Directors Eric DePorter President David Bein, Ph.D., SFO President-Elect Tamara L. Mitchell Treasurer Jan J. Bush Immediate Past President 2020–23 Board of Directors Anthony R. Arbogast, Edward J. Brophy, Patrick McDermott, Ed.D., SFO 2021-24 Board of Directors Todd R. Drafall, Sean Gordon, CPMM, CPS, Raoul J. Gravel, III, Ed. D. 2022–25 Board of Directors Alicia M. Cieszykowski, Melissa L. Morgese, Dr. Kevin T. Werner, CPA

Illinois ASBO Board Liaisons

Steven J. Kowalski Service Associate Advisory Committee Chair Ed Wright Service Associate Advisory Committee Vice Chair Perry Hill IASB Board Liaison

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For a Complete Listing of Upcoming Fall Events Visit: www.iasbo.org/events/calendar

PERSPECTIVE / Board President

FROM–THE–PODIUM Looking at the Positive Side of Forced Changes in Purchasing and Procurement Welcome to the Fall 2022 UPDATE! This issue is dedicated to purchasing and the many options and challenges we all face. I would like to give a quick thank you to the many authors and contributors within this issue who have taken the time to share their expertise.

When you consider the path we have all been forced to traverse over the past several years, I’m not sure there has even been a time in education where we have had to navigate as many never-experienced-before challenges. We found ourselves having to make choices that deviated from what has typically been considered best practice, often impacting students’ lives in ways that haven’t happened in generations. Decisions had to be made to protect the safety of those under our care, frequently well in advance of a complete understanding of

Eric DePorter ASSISTANT SUPERINTENDENT OF FINANCE, FACILITIES AND OPERATIONS/CSBO GLEN ELLYN SCHOOL DISTRICT 41

SIMPLY SAYING

I challenge you to take the view that we aren’t going through a difficult trying time, but instead a time where we can step up to positively impact more students than we ever have in the past. exactly what the pandemic was going to serve up next.

Fast forward to the present day, and we find ourselves in an economic environment that is altering what we have typically come to expect in the areas of purchasing and procurement. Many simple and reliable procurement practices of the past have been turned upside down and new solutions have been needed. Supply chain delays and product scarcity lead to problems that can ultimately be detrimental to not only the bottom line, but the quality and richness of the instructional environment that our students deserve. This issue focuses on a handful of solutions to consider as we adjust to the new normal we all face.

While we have been tackling the many new challenges we face, I think it is important to keep focused on the positive opportunities we have. Forced change is something that, more often than not, brings with it a negative connotation.

I challenge you to take the view that we aren’t going through a difficult trying time, but instead a time where we can step up to positively impact more students than we ever have in the past.

As we move forward together doing work that brings with it every day the opportunity to improve the lives of those we serve, I’m reminded of a quote that I often think of: “All good thoughts and ideas mean nothing without action.”

– Mahatma Gandhi Make today the day that you capitalize on one of those opportunities; after all, you only get to do today once!

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Illinois ASBO

Presidents’ Gala Save The Date!

Wednesday, October 12, 2022 The Morton Arboretum Network with fellow Illinois ASBO members and support the Illinois ASBO Foundation while enjoying the scenic views! Be inspired by the legacy of Illinois ASBO leaders at this annual celebration of the profession.

Special Thanks to our Event Sponsors:

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UPDATE Magazine Fall 2022

PERSPECTIVE / Executive Director

FROM–THE–OFFICE The Power of Association Collaboration School district purchasing is as much an art as it is a science. Yes, legal requirements often make it seem like just a routine function. However, a knowledgeable school business official knows that applying “art” to purchasing can truly save money and guarantee the highest quality of goods and services. When that is demonstrated to a school board and community, taxpayers can be assured that every penny of support is producing a measurable return on investment.

Michael A. Jacoby, Ed.D., CAE, SFO EXECUTIVE DIRECTOR/ CEO Illinois ASBO is in the business of providing purchasing opportunities that districts can ILLINOIS ASBO trust. Take a moment to examine and consider participating in the following programs and services. These opportunities are high quality, with set forth best practices and apply the power of association collaboration and cooperation. If you have not investigated the following, your district may not be getting everything it can from each dollar.

SIMPLY SAYING

Illinois ASBO is in the business of providing purchasing opportunities that districts can trust.

Illinois School District Liquid Asset Fund Plus (ISDLAF+) The premier investment program for Illinois schools proving liquidity, fixed rate, short and long-term investment options.

Accubase Provides clients with state-of-the-art property tax base auditing and consulting services that positively enhance public sector decision-making.

IEC powered by Future Green Save on utility costs through a joint energy purchasing consortium sponsored

by IASB, IASA and Illinois ASBO. Illinois school districts and community colleges have utilized these savings to bring more money into meeting their educational goals.

Illinois School Employee Benefit Consortium & Metropolitan School Employee Benefit Program (ISEBC & MSEBP) Health insurance programs that give districts new options for savings. MSEBP covers Cook, DuPage, Kane, Kendall, Lake, McHenry and Will counties. ISEBC specializes with school districts located outside the Cook and Collar Counties.

Illinois ASBO p-Card Partner with Illinois ASBO, Harris Bank/ Mastercard and other districts throughout the state utilizing this procurement card (p-Card) program for purchasing that has now spread to other Illinois ASBO affiliates and produces rebates based on purchasing volume.

Illinois ASBO In-District Services Professional development services designed for all district administrators and business office personnel.

Frontline Education A leading provider of school administration software, connecting solutions for student and special programs, business operations and human capital management with powerful analytics to empower educators.

American Fidelity Offering a well-rounded benefits program customized to your unique market to attract and retain quality employees.

Researched and brought forward with the help of school business officials or industry partners, the goal of each program is to provide a service to schools to help you operate efficiently and effectively.

For more information on the Illinois ASBO member programs and benefits, please visit: www.iasbo.org/tools/programs-services/programs. www.iasbo.org

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Give Your Support Staff

the Support they Need to be Successful!

Schoolsarefacingnewchallengesdaily.Makesureyourfrontoffice is prepared! Connect with subject matter experts and colleagues from across the state to keep up on the latest best practices.

Friday, December 2, 2022

Marriott at Burr Ridge, Illinois

Get full event details at www.iasbo.org/supportcon

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UPDATE Magazine Fall 2022

PERSPECTIVE / SAAC Chair

FROM–THE–FIELD Service Associates and School Administrators Working Together For the Best Value People like to “buy,” but they do not like to be “sold”. When is the last time you heard someone say, “Hey, I was sold a car last week”?

The most effective Service Associates seem to be the ones who help facilitate a buying process rather than “sell services”. This is especially important for those projects that are not so much “transactional” but rather complex and require long-term partnerships and ongoing consultation with private sector businesses.

Complex projects, rising costs, disruptive supply chain issues and changing procurement rules are just some of the reasons why Service Associates and School Administrators collaborate more than ever to help set more realistic timelines and budgets for district stakeholders.

Steven Kowalski BUSINESS DEVELOPMENT MANAGER PERFORMANCE SERVICES INC.

SIMPLY SAYING

Working with Service Associates who are actively engaging in Illinois ASBO Professional Development is a good first step in ensuring that your business partner is staying current and has the ability to effectively collaborate with you and your district.

Buying on “best value” versus buying the “cheapest product” has been an increasing trend among the public sector, especially in K12 school districts. The recent passage and overwhelming support for the “Better School Lunch” initiative (HB4813) is a great example of how district administrators are negotiating for what is regarded as “best value” to ensure health and equity for our students.

In this example, the cheapest meal is not always best for our children. Purchasing energy consuming equipment or other technology related upgrades has also become more of a negotiated process. These systems have long-term cost and health ramifications for districts and students and often require ongoing maintenance contracts. Negotiating the total cost of ownership for these systems is important to be sure districts are not saddled with high energy or maintenance bills for years to come due to installing cheap technology.

Illinois ASBO Service Associates are in a unique position to not only help school administrators through complicated procurement processes but also to help share best

practices from other districts which they consult with. After all, networking and sharing best practices are at the core of Illinois ASBO’s mission and value.

Today more than ever, finding Service Associates who are staying current with the trends and challenges of K12 procurement is of the utmost importance. Working with Service Associates who are actively engaging in Illinois ASBO Professional Development, such as PDCs, presentations and peer2peer, for example, is a good first step in ensuring that your business partner is staying current and has the ability to effectively collaborate with you and your district.

This issue of UPDATE has several great articles about the trends in today’s K12 procurement along with ideas on how to collaborate with Service Associates and other private businesses to ensure your district is working towards best value when purchasing goods, services and projects for your district.

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CONTRIBUTORS

Kenneth M. Florey

Christopher R. Gorman

Tim Keeley

Partner Robbins, Schwartz, Nicholas, Lifton & Taylor, LTD.

Attorney Robbins, Schwartz, Nicholas, Lifton & Taylor, LTD.

Asst. Superintendent for Business/ CSBO Addison Elem. SD4

Concentrates his practice representing public and private clients, including municipalities, school districts, community colleges, private owners, contractors and design professionals regarding land use, municipal law, construction, tax, finance and litigation.

Represents clients in commercial transactions, contracting, construction and related transactional matters.

Christopher has also served in the firm’s labor and employment practice group. Previous experience includes serving as in-house counsel for a nonprofit organization, a charter school management organization and a state regulatory agency overseeing higher education financing. cgorman@robbins- schwartz.com

Joined Illinois ASBO almost 16 years ago on his first week in the profession and has served as both chair and vice-chair of the Purchasing PDC. Additionally, has been a member of the Editorial Advisory Board and the Online PD Task Force.

kflorey@robbins- schwartz.com

Steven Kowalski

Amy McPartlin

tkeeley@asd4.org

Howard Metz

Business Development Manager Performance Services Inc.

Assistant Superintendent of Finance & Operations/CSBO Prospect Heights School District 23

Partner Robbins, Schwartz, Nicholas, Lifton & Taylor, LTD.

Has over 26 years developing facility improvement projects that reduce energy consumption, increase indoor air quality and enhance the learning environment for Illinois K12 schools.

He currently serves as Chair of the Illinois ASBO Service Associate Advisory Committee, is an active member of the Sustainability PDC and also serves as a board member for the Ecology Action Center.

Prior to joining Prospect Heights School District 23 in 2019, Amy spent eight years at Township High School District 214 as the Purchasing, Transportation and Business Services Supervisor. With over 20 years of school district business office experience, Amy is a member of the Delegate Advisory Assembly and is a frequent IASBO presenter, having served as past Chair of the Purchasing PDC and a key contributor to the recently updated IASBO Purchasing Manual.

Counsels and represents school districts, community colleges, park districts and municipalities with respect to real estate, commercial transactions, construction law and land use and zoning matters.

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UPDATE Magazine Fall 2022 skowalski@PerformanceServices.com amcpartlin@d23 .org

hmetz@robbins- schwartz.com

Becky Thompson, CEP

Myron Spiwak, CPA

Jennifer Sulentic Vice President CompareCoOps

Senior Energy Advisor Nania Energy Inc.

Spent 17 years working in the Insurance industry before beginning his career in school finance. Currently serving as the Vice Chair of the Principles of School Finance PDC. Myron believes equity initiatives will continue to grow as vital parts of school strategic plans.

Leads the free SAAS procurement platform, CompareCoOps, making cooperative purchasing easier to use and more transparent for schools.

Over the past 12 years she’s been a resource for districts helping them save millions of dollars and a tremendous amount of time using cooperative contracts. Jennifer is a current member of the Purchasing PDC and an alumni Service Associate Advisory Committee Member.

Has over nine years of service at her firm. She specializes in guiding K12 public school districts and other public entities through the complex world of energy procurement and energy cost management. Becky also currently serves on the Service Associate Advisory Committee and Sustainability PDC for Illinois ASBO.

spiwakm@newtrier.k12 .il.us

jennifer.s@comparecoops.com

bthompson@naniaenergy.com

Director of Business Services New Trier Township High School District 203

Would you like to be an UPDATE Contributor?

UPDATE articles are brainstormed and solicited through the Illinois ASBO Editorial Advisory Board.

If you have an issue you feel needs to be brought to the forefront, present your ideas to StaciaFreemanatsfreeman@iasbo.org.

The issue themes that we will be soliciting articles for next year include:

• Risk Management • Accounting • Non-Traditional Programs • Cash Management We look forward to seeing new faces on this page as we continue to make the UPDATE an indispensable resource for school business management.

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UPDATE Magazine Fall 2022

ARTICLE

By Becky Thompson SR. ENERGY ADVISOR NANIA ENERGY INC.

Energy purchasing seems to be one of those tasks that school business officials and administrators endure every few years but may not have the time to explore to fully understand all the moving pieces. And with the recent volatility in the energy market, understanding the market and what to do is an even greater undertaking.

This article will provide you with an update on recent market happenings and give you some ideas on how to navigate and make the best decision for you and your school district.

Natural gas and electricity supply are both “traded” in a forward-facing commodity marketplace, much like corn, soybeans and oil. When you enter into a supply agreement with a third-party retail energy supplier, you agree on a price today for energy your facilities will be using for some defined term in the future. Most commonly, schools secure a fixed rate for their natural gas and electricity contracts. A fixed rate provides the buyer budget certainty and insulation from future market price changes.

Like nearly every commodity, electricity and natural gas prices are volatile (even more so lately), which is a fancy word for unpredictable and scary — especially if you are a school business official trying to plan your next fiscal year with precision. www.iasbo.org

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For the past decade, school districts have seen year-over-year decreases in gas and electricity costs, as market rates for both have fallen annually since 2008. Many districts came to assume a cost decrease with each energy contract review.

Almost overnight this scenario flipped. If you have reviewed your options for gas and electricity in the last 12-18 months, you probably have already experienced the heartburn of massive cost increases. If you have not yet looked things over and your contracts expire in the next year or two, buckle up.

The Supply and Demand Predicament Most school districts in Illinois are facing 60-100 percent increases on their energy bills.

Why? Short answer: Supply and demand.

Production of natural gas started tapering off well before the pandemic due to a pullback on investment in energy from Wall Street.

Years of declining energy rates meant most investors in the energy space had been burned over the past decade. There is now a general reluctance for new investment in energy exploration. Add onto that the current sustainability movement and general hostility to fossil fuels, and there is a lack of enthusiasm on the part of Wall Street to pour any more money into funding energy production.

With a lack of capital investment, the amount of energy that drillers of gas and oil were able to produce started to decrease.

When COVID-19 hit, energy production all but came to a halt.

While things have slowly started recovering, the U.S. is still down 40 percent on the number of producing energy “wells” vs. 2019 numbers.

Simultaneous to reduced production levels of natural gas, demand is increasing.

A U.S. economy that is recovering from pandemic shutdowns is humming, and so is its energy demand. In addition, we are now exporting a record amount of natural gas to Mexico as well as Asia and Europe. Roughly 20 percent of our daily natural gas 16 |

UPDATE Magazine Fall 2022

production is now headed to foreign markets and is expected to increase, especially given recent events in Europe (see Ukraine).

Sprinkle in new federal and state legislation focusing on more renewable sources of energy that push coal and natural gas electricity generators out of the market (further limiting supply), and BAM! Market volatility.

That’s why now, more than ever, weather plays such a large part in daily market prices. In a sensitive market, any unforeseen or unfavorable weather forecasts can send rates screaming 10-20 percent overnight.

Combating Cost Increases

Now that we have set the scene as to why the energy market is so crazy, let’s dive into what you can do to combat the cost increases as a school business official.

There’s no doubt about it. Annual cost increases of 60-100 percent are tough to swallow. Especially in an environment where schools are asked to do more with less. But what can you do to combat these higher energy costs? Plenty.

1. Energy Efficiency The cheapest kilowatt-hour or therm is the one that you don’t use.

Energy efficiency projects are an easy way for you to reduce the amount of energy you use. These projects represent any replacement or update to your facilities’ equipment that would result in you using less energy (natural gas or electricity).

Plus, with higher energy costs, the return of investment (ROI) on these projects is much quicker. Increased utility rebates provided by the 2021 Illinois Climate and Equity Jobs Act (CEJA) for energy efficiency projects can also help make many of these projects much more financially attractive.

Haven’t upgraded your lights to LEDs yet? This should be the first item on your list.

2. On-Site Solar Illinois is now one of the four best states in the U.S. for distributed generation, primarily due to state and utility

ARTICLE / Energy Prices

rebates for installing solar. Last year’s CEJA law increased the incentives available for solar in Illinois by five times.

There is also now a special carve-out in the program for solar energy installed at K-12 education facilities.

As non-profits, public schools do not qualify for any of the tax advantages provided for solar as part of the U.S. tax code. Inserting a third-party developer who keeps ownership and maintenance responsibility for the system allows the developer to claim these tax credits and pass through these benefits to the school in the form of a below-market energy rate. This is known as a power purchase agreement or a PPA. Power Purchase Agreements allow an entity to install solar panels with no out-of-pocket costs. They are especially popular among districts with limited capital funds available or who may need roof replacements and can marry the two projects into one.

Now it’s time to shake things up and get creative. Dust off your energy contracts and start thinking proactively.

3. Effective Supply Purchasing As we mentioned before, throughout the 2010’s, schools could almost routinely expect an annual decrease in both electricity and natural gas costs. Natural gas costs went from a record-high of roughly $1.40 per therm in 2008 to as low as $0.20 per therm during the early days of the COVID-19 shutdowns. We saw similar drops in electricity rates. If your last electricity contract was executed in the summer of 2019, you know what I’m referencing.

Unfortunately, the party appears to be over.

Now it’s time to shake things up and get creative. Dust off your energy contracts and start thinking proactively. Even if your current energy term is not up for another year, it’s more important than ever to review options, get Board buy-in and have a plan of attack if market volatility starts to work in your favor. Waiting until the end of your energy term to review options can be a recipe for disaster in a bullish market.

Other Ideas to Decrease Energy Costs Include: • Increasing the number of competitive bidders if you previously had very few (or none) • Negotiating to remove unfavorable or vague contract language that leaves your District open to risk • Considering alternative methods for collecting bids such as reverse auctions Reverse auctions are not new technology — you may have even participated in them for bonds purchasing — but they are becoming more popular in the public space for gas and electricity supply purchasing. For districts willing to adapt their buying methods, auctions tend to simplify the process while delivering better results than a sealed RFP process alone.

So, there you have it. Though the energy marketplace is unfavorable, you are not without ways to combat the increases and make sure your district is protected. It’s worth noting that if you elect to do all three areas to manage your energy spending, they should be done linearly.

By undertaking these in order, you ensure that you are limiting your usage first through efficiency projects, then building a solar array to offset as much of your baseline volumes as possible, and finally marrying it all with a purchasing strategy that covers any remaining usage.

This new market is changing week-to-week, so understanding the right moves to make can change just as quickly. One thing is for sure – what was true for your energy cost planning three years ago is likely no longer true today. You might even find that revisiting some ideas that didn’t make fiscal sense years ago suddenly work with new funding opportunities and quicker paybacks. Navigating this new market can be tricky, but the above can provide you with a blueprint for starting to take action. Good Luck!

One thing is for sure — what was true for your energy cost planning three years ago is likely no longer true today.

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In these uncharted times, the Illinois ASBO Board of Directors and Service Associate Advisory Committee have led the way in making sure Illinois ASBO members have access to crucial resources and thought leadership.

New voices are needed to make sure the Association remains an indispensable resource for professional development, networking and advocacy.

Board of Directors

Board of Directors We are seeking three school leaders to serve as 2023-2026 Directors!

Learn more and apply at www.iasbo.org/board

Service Associate Advisory Committee We are seeking two Service AssociateService membersAssociate to serve as 2023-2027 Advisory Committee SAAC Members! Learn more and apply at www.iasbo.org/saac

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>>> APPLY BY DECEMBER 15 TO BE CONSiDERED FOR LEADERSHiP POSiTiONS!

UPDATE Magazine Fall 2022

PERSPECTIVE / On the Profession

SCHOOL BUSINESS 101 What are the major challenges and issues facing your purchasing in the future? are steering away from products and services with unreasonable delivery issues and cost “ We inflation and towards other needs on our list which have the least of these stresses. Of course,

some areas of stress on cost and lead time are unavoidable, so we try to buy more sooner to try to stay ahead. Having a capital plan which is flexible makes this much easier to manage.”

DOUG RENKOSIK, CPMM , Director of Operations & Maintenance, Huntley Community School District 158

How have you overcome some of your supply chain disruptions?

“

As a result of supply chain issues, we have put a greater emphasis on tracking when, how and why we make some of our larger purchases for the district (laptops, desks, equipment, etc.). This knowledge allows the district to re-evaluate the bidding process across our seven buildings and track current vendors to identify local vendors with faster delivery. We also have essential information on shipping costs and limits (purchase order approvals). Through this process, we identified inefficiencies within our workflow and continue to make adjustments to strengthen our future purchasing power.”

MIKE VARGAS, Director of Business Services, Twp. High Sch. Dist. 214

Want to See Other Discussions That Are Going on Amongst Your Peers? peer2peer has always been a valuable tool for starting discussions and receiving feedback on an endless variety of topics pertaining to the school business community. With the new "Search Discussions" function available in the Open Forum community, you can retrieve past posts matching up with your search inquiry. Now, even more information is available to you with a few keystrokes.

New conversations are started daily in this Illinois ASBO online community. Incorporate peer2peer into your daily routine. Log in at www.iasbop2p.org to see what your peers are talking about today. www.iasbo.org

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NEW Membership Bundles We have consolidated our member categories and provided bundles available to School District, Facilities and Support Professionals.

Illinois ASBO is excited to announce its new membership model, that launched on July 1. There are two changes to be aware of: 1. We’ve consolidated Basic A/B, Basic Plus, Premium and Premium Plus member categories into one, simple category called School District Member — with all the great benefits Illinois ASBO has to offer!

2. School District, Support and Facilities Professional members who join or renew will be able to add the following to their membership invoices: Illinois ASBO Annual Conference, Illinois ASBOnline+ and Central and Southern IL Regional Conferences Registration.

Why are these changes being made?

Continuous improvement is important to us. Members shared they would prefer having one invoice to ease administrative work.

Our goal was to simplify and improve the member experience, so we streamlined the categories and made it possible to purchase our most popular offerings at the time you join or renew.

Who is affected by the change?

Those who are currently Basic A/B, Basic Plus, Premium and Premium Plus members will need to select a new membership category (and any add-ons) when they renew. Additionally, Support and Facilities Professionals will be able to take advantage of our add-on offerings.

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What are the new membership categories?

There are three primary membership categories: School District Membership $340 Available to professionals working in school business offices in school districts across Illinois. Members gain access to professional development, networking, resources and advocacy that helps districts become high performing.

Support Professionals $100 School district support professionals include office administrators, bookkeepers, office assistants, payroll supervisors and HR generalists. In a school district, support professionals need to understand a variety of unique subject areas.

This membership provides the access to knowledge and training that will help you excel in your role. Requires enrollment in Illinois ASBO’s Support Professionals Program.

Facilities Professionals $100 From custodial, maintenance and grounds to legal issues, long-range planning, emergency management and more, Illinois ASBO’s Facilities Professionals members help to create a consistent facilities standard for schools. Enrollment in Facilities Operations Program or CPS/CPMM Certification is required.

Did the other member categories change?

No. The other member categories did not change and your renewal experience and benefits will remain unchanged.

What add-ons will be available?

Illinois ASBO will allow School District, Support and Facilities Professional members to purchase the following at the time they join or renew: Illinois ASBO Annual Conference $495 Illinois ASBO’s premier event features two days of information-packed sessions, legislative updates and opportunities to connect with speakers and colleagues from across the state. You save $50 when you purchase at the time you join or renew.

Illinois ASBOnline+ $299* Upgrade and unlock all learning platform content, earn unlimited PD clock hours, receive a free micro-credential (valued at $180) and more. Basic Illinois ASBOnline access is complimentary to all active members and provides access to all lunch-and-learn webinars and all School Business 101 presentations; however, access to all content and PD clock hours are only available with an IASBOnline+ subscription. *Introductory rate reflects discount when purchased at time of joining/renewing (Regularly $399).

Central and Southern IL Regional Conferences Registration $175** Our regional conferences create opportunities for school business professionals to engage with colleagues and participate in discussions about professional development and advocacy. **Base price is $200. You save $25 when you purchase at the time you join or renew.

What can I expect when I’m due to renew?

When it’s time for you to renew, you will need to go online to select your new membership category and any add-ons that you wish to purchase. We’ve worked hard to ensure the renewal process is user-friendly and we do not anticipate any issues.

Have my benefits changed?

No. You can expect to continue to receive the same, highly valued benefits from Illinois ASBO that you have enjoyed in the past.

We take great pride in serving Illinois school district professionals. We hope you find these changes improve your member experience. We would appreciate hearing feedback about your join/renewal process. Please contact Chris Harley at charley@iasbo.org. www.iasbo.org

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Guaranteed Energy Savings Contracts: An An Efficient Efficient and and Viable Viable Procurement Procurement Option Option

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ARTICLE

By Steven Kowalski

BUSINESS DEVELOPMENT MANAGER PERFORMANCE SERVICES, INC.

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Over $15 Billion worth of Guaranteed Energy Savings projects have been completed over the past 20 years throughout the nation's K12 Schools. The majority of states in the US and the Federal Government have enabling legislation governing the use of what is known as Guaranteed Energy Savings Contracts or GESC (sometimes referred to as Energy Performance Contracting). In Illinois, this legislation for K-2 Schools is defined in Article 19b of the school code.

Article 19b: • Allows school districts to partner with an Energy Services Company (ESCO) to provide energy efficiency-related services • Defines how these services can be procured • Requires a financial guarantee from the ESCO to the school district that the savings from the improvements will pay back the cost in 20 years or less.

With literally hundreds of Illinois K-12 Schools utilizing the Article 19b procurement method since its inception over 30 years ago, why are there still so many misconceptions about how this legislation works? Some of the highest-profile school districts in Illinois, with some of the most well-respected business managers in the industry, have chosen this procurement method to address facility improvement

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needs for the most critical and costly equipment such as boilers, chillers, unit-ventilators, lighting and building controls. So, what challenges are school districts addressing and how does Article 19b help address those problems?

The Challenges

Similar to the idea that one would never purchase a car without knowing the gas mileage, how can school administrators be expected to purchase millions of dollars for building equipment and systems without considering the total cost of ownership? The lowest upfront cost may be the best option for some of this equipment, but on the other hand, sometimes the cheapest equipment can saddle school districts with decades worth of high energy and maintenance costs.

ARTICLE / Guaranteed Energy Savings Contracts

The nation's 17,450 K-12 school districts spend more than $6 billion annually on energy — more than on computers and textbooks combined. As much as 30 percent of a district's total energy is used inefficiently or unnecessarily. Source: Energy Star.Gov – An Overview of Energy Use and Energy Efficiency Opportunities.

Equipment such as boilers, chillers, building controls, lighting and solar arrays significantly impact a school's future operating budget. Replacing these systems usually requires more than just a "one for one" replacement.

Instead, newer technology, modern building codes and changes in teaching space are just some of the reasons these systems sometimes require complete re-designs by qualified engineers. But with so many decisions on highefficiency designs and initial cost considerations, how does a district decide to procure new systems? One answer: Guaranteed Energy Savings Contracts.

Renovating buildings to make them more comfortable and energy-efficient is nothing new. In the early 1880s, at what is now the University of Whitewater, Wisconsin, Professor Warren S. Johnson became frustrated that his classroom was either too cold or too hot. The janitors would come in to measure the temperature and manually adjust dampers— disruptive to his teaching. So, Professor Johnson invented, and in 1883 patented, a device called the "electric tele-thermoscope." With this, the industry of controlling classroom comfort was born. Nine years later, Willis Carrier invented air conditioning to help control humidity for a New York printing press. Thus, the modern Heating, Ventilation and Air Conditioning (HVAC) evolution began.

Fast-forward to today, heating, cooling, ventilating and controlling the environment of modern buildings is a given but can be complicated and costly.

Performance contracts have been used for decades to provide cost-effective facility improvements. Over 30 years ago, Illinois adopted Article 19b of the School Code:

Schools Energy Conservation and Savings Measures.

This legislation allows districts more flexibility in procuring school improvements that reduce long-term energy and operating costs. Districts can choose an Energy Services Company (ESCO) directly via an RFP process.

It emphasizes accountability on these companies by requiring financial savings guarantees and allows for more design collaboration between the ESCO, the district and the potential subcontractors.

The concept allows a district to use the future funds it would spend on higher utility and maintenance bills from antiquated and inefficient equipment as a "funding source" for improvements. Why overpay the utility company when you can use those dollars to renovate the equipment instead?

The following provides a high-level view of how this process works in Illinois and addresses a few common misconceptions about the legislation.

RFP Process: Choosing your ESCO

is a Competitive Process

The formal procurement process begins with a Request for Proposal (RFP). This process allows the district to choose which ESCO they want to partner with to design, manage and install their project. However, previous to this step, the district may have had discussions with one or more ESCOs to learn more about the feasibility and process for implementing a project. If the district utilizes an ESCO to help prepare the RFP documents, it must disclose that relationship in the RFP. The RFP illustrates the intent of the district to solicit proposals from qualified ESCOs and outlines the due date, evaluation criteria and instructions for how to respond. The RFP must be posted at least 30 days before the due date.

A more detailed list of required items to include in the RFP and timing requirements are outlined in the legislation.

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Utilizing an RFP is not a traditional bid process. By design, the RFP process typically does not yield an "apples to apples" comparison of the competing companies Instead, it allows the district to evaluate ESCOs based on creativity, approach, pricing methodology, references and experience.

Once the administration has decided on a company to select, they will ask the board to approve their recommendation to select that provider. In some instances, additional scope and pricing negotiations may need to be finalized before developing and signing a Guaranteed Energy Savings Contract.

Contracting and Subcontracting: Guaranteed Energy

Savings Contracts Can Include a Bidding Process In most cases, the ESCO acts as the primary manager of the entire process, from design to subcontracting through installation. Like the Design-Build concept, the ESCO usually has in-house design engineers and project managers to create increased design quality and constructability. This approach affords the district a

single source of accountability for the entire project from start to finish.

While every ESCO may have differing in-house capabilities, it is responsible for building a team of subcontractors. The following is how an ESCO might manage subcontractors using a "flat" organizational structure. This type of structure increases accountability for each subcontractor. Another significant benefit is the decrease in mark-ups which often saves the district large installation costs. Different ESCOs have different contracting styles and approaches, so districts are encouraged to review the ESCO's subcontractor selection and project management approach during the RFP stage.

Some districts choose to hire an Energy Services Company to work alongside their architect and other design professionals. That structure allows districts to have each specialized design professional (Architect, ESCO, CM for example) "at the table" during design, bidding and implementation. When addressing facility improvements using multiple design professionals, it is important to bring these teams together early to clearly identify roles and responsibilities early in the process.

Savings and Guarantees:

The Savings are Real, Measured and Verified

Most Guaranteed Energy Savings Contracts require the ESCO to calculate the pre-construction and postconstruction energy use and report those savings to the district or school board annually. To do this, the ESCO will first calculate a baseline energy use for the buildings.

The ESCO will then calculate, using several methods, the energy reduction that will be achieved after the improvements are complete and will continue to monitor savings according to the performance agreement. Typically, the energy savings are measured and verified (M&V) based on methods within the U.S. Department of Energy (DOE) M&V Guidelines: Measurement and Verification for Performance-Based Contracts.

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ARTICLE / Guaranteed Energy Savings Contracts

savings. These savings occur when an improvement implemented under the contract reduces future repair or replacement labor and/or material monies that would have otherwise been expended if the improvement was not implemented. Some energy savings may be stipulated with the district, such as future energy rates, weather and building occupancy.

According to the Energy Analysis and Environmental Impacts Division of Berkeley Labs, only about 63 percent of K-2 districts continue the Measurement and Verification process throughout the project. Many districts utilize the M&V service for around three years until they feel comfortable that they are realizing the savings.

Funding: Districts do NOT Need to be Tied to a Long-Term Contract

The funding for Guaranteed Energy Savings Projects is often misunderstood. These projects are not "Free." And most Illinois K-12 districts do not pay their ESCOs with their future energy savings. Those are called "shared savings programs" and are not often utilized in Illinois K12 schools.

The vast majority of the Guaranteed Energy Savings Contracts for Illinois K12 School districts are funded similarly to how a district would fund any other construction project. The ESCO and the district negotiate a total turnkey price for a set scope of work, and the district pays the ESCO during the construction period based on an agreedupon payment schedule. For example, districts can use existing capital or debt service options (such as a bond issuance) or some combination. According to Berkeley Labs, about 58 percent of K12 districts use 100 percent financing and 33 percent of districts use a combination of cash and financing to fund the improvements.

The district will also agree to a future annual cost for the ongoing measurement and verification (M&V) of the savings, which is typically less than .5 percent of the project cost annually and, as described earlier, can typically be canceled at any time.

In summary, the district purchases the project upfront and will then "justify" the repayment of its bonds or fund balances with the ongoing savings generated from the project.

Summary

Public school districts in Illinois have several choices for procuring construction projects. Article 19b of the school code governing Guaranteed Energy Savings Projects is one choice. This legislation can be considered when a district is looking to focus on the most critical building components like chillers, boilers, lighting, solar, building controls and other energy conservation measures. Any equipment that will significantly affect future operating budgets can be purchased through this procurement option. For many districts with large construction projects, ESCOs can be hired as part of the overall design team and work alongside the district's architects and construction managers. Hiring an ESCO and an architect does not have to be mutually exclusive.

Illinois legislation provides school districts flexibility when choosing an Energy Services Company through an RFP process. The chosen company will then develop, manage and install a full turnkey project. This streamlined designbuild approach eliminates the finger-pointing of having multiple contracts with multiple providers. Additionally, combining these two trades under one roof increases the quality of design and installation. And the financial guarantees create even more accountability to ensure the project is installed and commissioned correctly from the start yielding quantifiable energy savings that are measured and verified for years to come.

The German philosopher Arthur Schopenhauer said, "All truth passes through three stages. First, it is ridiculed.

Second, it is violently opposed. Third, it is accepted as being self-evident." The merits of Guaranteed Energy Saving projects as a procurement method for Illinois K12 public schools have arguably become accepted as selfevident with few exceptions.

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By Tim Keeley

ARTICLE

ASST. SUPERINTENDENT FOR BUSINESS ADDISON SD 4

Amy McPartlin

ASST. SUPERINTENDENT OF FINANCE & OPERATIONS/CSBO PROSPECT HEIGHTS SCHOOL DISTRICT 23

Every business, regardless of industry, has some form of procurement need. For school business officials, determining the appropriate procurement strategy can often be a difficult task, as there is a myriad of variables to consider.

Let’s lean on the reliable “who, what, where, when, why and how?” line of questioning as we explore further. Î Î Î Î Î Î

Who is making the final decision on products/services? Who is the preferred vendor?

What is the need? Identify the desired product or service.

Where is the purchase needed?

When do you need it? Is the purchase time-sensitive?

Why is it needed? What is the desired goal or end result?

How will you buy it? Does it require a bid or an RFP? While all the above are valid and important considerations, we will focus on the how in this article. In doing so, we will contemplate two primary methods: centralized procurement and decentralized procurement. As we venture forth, it should be noted that these are not the only two options and, as we learned during the pandemic, we can make anything hybrid. To determine the best how, we have provided an overview of both the challenges and benefits of each model.

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CENTRALIZED PURCHASING APPROACH

In a centralized procurement model, final purchasing decisions and execution of orders are completed by a single entity, typically the Business Office. Commodities or items requiring very little end-user input are generally a good fit for this procurement method. The list of items or services that can be purchased this way is endless and may include items such as copy paper and office supplies.

In districts with a dedicated procurement professional, transactions are initiated and executed by a single individual with specialized knowledge and skills in school district procurement and contracts. They are able to retain oversight of the entire purchasing process from quote, to order, to receipt of goods and final payment/closeout. They can track down missing or back-ordered items and can make sure that purchases fall within approved budgetary guidelines.

Having a dedicated purchasing professional can result in more streamlined communication and closer adherence to best practices. In many cases, it can benefit the district through their ability to negotiate better pricing. It also allows for closer oversight of the total spend on products and services, ensuring that a bid or RFP is issued in accordance with Board policy and Illinois School Code, if required.

In districts with a dedicated procurement professional, transactions are initiated and executed by a single individual with specialized knowledge and skills in school district procurement and contracts.

From the vendor’s perspective, it is easier to work through a more centralized model and more cost-effective. For example, the transactional cost to sell 10,000 pencils to a school district 30 |

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will be significantly lower if they buy all 10,000 units at once rather than placing ten separate (1,000 pencil) orders and shipping to ten different schools. This savings comes in the form of the reductions in cost to process multiple orders, the cost to ship multiple orders and the cost to invoice multiple orders. The vendor has to pay for these costs upfront and inevitably ends up passing the additional costs to the end user (school districts).

Let’s go back to the procurement professional, whose primary role at the district is; buying things and managing inventory. In a centralized model, this person represents the entire district’s purchasing interest. If properly trained, they will understand how to negotiate advantageous terms with vendors and manage inventory once supplies are delivered.

Taking another look at the pencil example; It is to the vendor’s advantage to have a single point of contact who deals solely with procurement. Building staff are often busy and “juggling” several different tasks. They are not purchasing experts and are likely busy every moment of the day reacting to and solving the many problems that unexpectedly crop up in a dynamic school environment. One of those ten contacts may find a better deal elsewhere, thereby reducing the total sale for the vendor. In this scenario, the vendor risks losing out on sales volume and the district loses out in the form of employee productivity and product consistency, as they have ten people doing essentially “the same” work.

While centralized procurement may be advantageous for many school districts, another approach to purchasing works using a more decentralized approach, in which multiple individuals or departments order what they need when they need it.

DECENTRALIZED PURCHASING APPROACH

Decentralized purchasing allows for greater autonomy among multiple departments. It allows staff to order exactly the products and services they prefer and negotiate the lowest pricing with their preferred vendors without Business Office involvement. Products can be ordered on an as-needed basis.

ARTICLE / Centralized vs. Decentralized Purchasing

While it may be a bit more costly to order in smaller quantities, there is no need for a warehouse to store large quantities and products are used promptly. No more boxes of unused paper, curling with humidity because it has sat for too long!

As multiple departments are placing orders, it is essential that there is a clear understanding of district purchasing procedures and budgetary guidelines with a firm set of internal controls and a system of approvals in place.

The Business Office is encouraged to keep the lines of communication open and work with budget administrators to provide guidance and oversight of budgeted expenditures and correlating line items, as orders are placed.

While it may be a bit more costly to order in smaller quantities, there is no need for a warehouse to store large quantities and products are used promptly.

Departments should be held accountable for their expenditures and “rewarded” for responsible purchasing and price comparisons. Unfortunately, procurement oversight by the Business Office can be a bit tricky, and it’s difficult to get a sense of total product spend as it relates to the obligation to conduct a more formal bid process.

HYBRID PURCHASING APPROACH

As alluded to earlier, there is also a more “hybrid” approach to purchasing, which involves Online and E-Commerce Ordering.

Often online procurement is tied to a cooperative purchasing agreement or maybe a vendor-specific offering through your financial software program, which allows for direct ordering with certain vendors with or without a built-in approval queue.

Provided that your Board has authorized these types of purchases, E-Commerce may be worthy of consideration as the ease of ordering and quick/next-day delivery generally may negate the slightly higher price of goods.

As discussed previously, it’s important to be clear in communicating your district’s purchasing procedures in adhering to the internal controls and approval guidelines.

Without those guidelines, it is much tougher to monitor the full spending through the fiscal year.

SUMMARIZING THE PURCHASING APPROACH OPTIONS

Some of the benefits of centralized procurement: X Internal Controls allow for tighter oversight and monitoring of usage X Central Office can maintain a standard of product and its utilization X Closer oversight of budgetary adherence X Larger opportunity for cost savings through fewer, larger orders

Some of the challenges of centralized procurement include: X Warehouse/storage space may be required to house “extra” inventory X District staff required to move items between sites and monitor usage Some of the benefits to a decentralized approach to procurement include: X Less idle inventory X End-user preferences are honored Some of the challenges of decentralized procurement include: X Potential for equity issues between sites X Lack of Business Office oversight on the amount of total spend, which is essential in determining the threshold for a required bid process Clearly, there are advantages to each approach, and there are some products that fit neatly into each category. In the end, we must take into account the many factors at play when making a buying decision.

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By Jennifer Sulentic VICE PRESIDENT COMPARE COOPS

The public sector procurement process can be confusing and time-consuming, but there are plenty of opportunities to boost efficiency and savings.

Government agencies tasked with purchasing the goods and services they need to function must be cognizant of local and federal regulations put in place to ensure transparency and compliance when it comes to spending taxpayer dollars. Additionally, certain contracts within the public sector are subject to specific value thresholds,1 and keeping track of all the information while staying on top of regulatory requirements can be daunting.

Purchasing cooperatives 2 allow groups of businesses in the private sector to join together to buy the goods and services they need to run their businesses. Likewise, Government Purchasing Cooperatives were created to give public sector agencies the ability to share procurement contracts between entities. This means that various state and local governments could buy the goods and services they need from the same contracts.

Public sector agencies use purchasing cooperatives to save time and money 3 when it comes to the procurement process. Purchasing managers and contract buyers can bypass the competitive bid process and immediately access contracts that meet all of their state-specific requirements.

Not only that, but buyers can rest assured they’re getting fair and affordable pricing thanks to the competitively bid contracts that are already in place.

The use of purchasing cooperatives spans well over 100 years and there are now 29,000 cooperatives that operate within every aspect of the U.S. economy. From banking and insurance to the nation’s electrical distribution, cooperative purchasing has a pivotal role in how we procure the things we use every day.

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Why School Districts Need Cooperative Purchasing Business managers and procurement officers are continuously trying to procure the highest quality products and services for the best possible value. Purchases must stay within compliance and supplier information must remain organized, all while dealing with lengthy and expensive RFPs 4 and slow internal processes.

There is a need to simplify the procurement process and there are several benefits of utilizing cooperative purchasing.

Save Time & Reduce Costs Above all, the use of cooperative purchasing will save districts time and money. The amount of time and due diligence it takes to sift through the right number of suppliers, to find the best value and make fair comparisons can be overwhelming. Not to mention, often this is a manual process. Purchasing cooperatives offer contracts that have already been established. Buyers no longer need to go bid or review proposals, they can simply choose the contract that works best for them.

Likewise, the purchasing power of the cooperative has been leveraged to secure the fairest, most reasonable pricing, letting buyers feel confident knowing they’re getting the best deal available to them.

Alleviate Resource Pressure A 2018 survey 5 found that 42 percent of staffers in public sector procurement felt overworked. Demand is increasing, yet staff are already dealing with limited resources. With that, and the desire to move toward more efficient procurement processes, buyers are pushing more toward cooperative contracts to piggyback off other agencies.

Increase Flexibility The use of cooperative purchasing contracts allows for more variety when it comes to suppliers and vendors, and more product flexibility.6 This is especially beneficial in the wake of the COVID-19 pandemic where supply chains all over the world have been disrupted. Cooperative purchasing ensures there are always alternative options and products available to be delivered on time and on budget.

Secure Superior Contracts And Better-Quality Products Since cooperatives already have contracts in place that meet local, state and federal requirements,7 and a public entity has completed the lengthy competitive bid process, it’s easier for government agencies to secure access to superior contracts and better-quality products by using cooperative purchasing.

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ARTICLE / Tracking Capital Assets

How to Best Utilize Cooperative Purchasing to Boost Efficiency in the Public Sector Anyone familiar with the public sector knows that traditional procurement methods are lengthy, oftentimes manual and outdated. Thankfully, purchasing cooperatives give school districts a way to improve upon some of those tedious processes. We’ve outlined some pro-tips below when it comes to utilizing cooperative purchasing to maximize efficiency in regard to procuring in the public sector.

Tip #1: Utilize Modern Technology It may not be realistic to think that every government agency is able and willing to update to the newest procurement technology system. Even if you’re up for the challenge, convincing stakeholders of the need for change will most likely happen at a snail’s pace. In the meantime, it’s helpful for procurement managers and buyers to be aware of the tools and resources that are available, which allow them to be as efficient as possible.

Tip #2: Cut Costs, Not Compliance The pressure to find new ways to cut costs and reduce the budget each fiscal year is real. Not only does cooperative purchasing allow you to find contracts that offer the best value, it significantly reduces the administrative costs and resources associated with traditional procurement processes. The previously long, drawn-out methods that normally took months are cut down to a matter of days or weeks thanks to cooperative contracts, all without sacrificing compliance.

When you compare different coop contracts,8 your district gains wider visibility over the contracts that are currently available. From sourcing to awarding the supplier, when everything is done within the same platform, it reduces the chance of missed opportunities.

Tip #3: Stay Ahead Of Disruption COVID-19 came in like a wrecking ball, disrupting procurement and the supply chain like never before.

Cooperative purchasing ensures there are always alternative vendors and suppliers available when agencies find themselves needing to pivot, thanks to shortages, lockdowns, closures and transportation delays.

Footnotes: 1. https://www.ukg.com/blog 2. https://ncbaclusa.coop/resources/co-op-sectors/purchasing-co-ops/ 3. https://www.alltrafficsolutions.com/blog/what-is-cooperative-purchasing/ 4. https://www.ukg.com/blog 5. https://images.more.deltek.com/Web/DeltekInc/%7B99f494a0-c09d-4fb4-8b97-e1da9a5fe78f%7D_Surveyof-Government-Procurement-Professionals-2018-GovWin-Deltek.pdf 6. https://public.omniapartners.com/hubfs/GOVPRO%20Sept%202019%20Cooperative%20Procurement%20 Article.pdf 7. https://public.omniapartners.com/resources/industry-insights/how-cooperative-purchasing-offers-keyadvantage-for-school 8. https://www.comparecoops.com/a-better-way-for-agencies-to-compare-cooperative-contracts

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ARTICLE

By Kenneth M. Florey

PARTNER ROBBINS, SCHWARTZ, NICHOLAS, LIFTON & TAYLOR, LTD.

Howard Metz

PARTNER ROBBINS, SCHWARTZ, NICHOLAS, LIFTON & TAYLOR, LTD.

Christopher R. Gorman

ATTORNEY ROBBINS, SCHWARTZ, NICHOLAS, LIFTON & TAYLOR, LTD.

As the recent Illinois legislative session wound down, school business officials had reason to be excited. On March 3, 2022, the Illinois House of Representatives unanimously approved House Bill 4393, which introduced a new, more-flexible model of value-based bidding criteria for school districts purchasing goods or services under Section 10-20.21 of the Illinois School Code.

However, by the time the 102nd General Assembly adjourned on April 8, 2022, HB 4393 remained stalled in the Senate. Legislators instead decided to approve much narrower reforms for food service contracts found in House Bill (HB 4813), which Governor Pritzker signed into law on June 29, 2022. A value-based bidding model will need to be reintroduced when the legislature convenes next year before public bidding criteria can be changed. If legislation is not reintroduced, school business officials will be forced to navigate the complexities of public bidding under Section 10-20.21 and its lowest, responsive and responsible criteria for at least another year.

Yet, while mastering public bidding requirements under Section 10-20.21 seems daunting, understanding the key strategies for complying with the School Code can help any school business official pilot even the most-complex purchases.

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KNOWING WHEN TO CHART A COURSE THROUGH PUBLIC BIDDING

Despite the requirements of Section 10-20.21, not every purchase by a school district requires public bidding. School business officials should determine whether they will need to navigate public bidding requirements to reach their purchasing destination.

Before setting out on a purchase under $25,000 without public bidding, make sure your board of education has not set a lower public bidding threshold.

Section 10-20.21 applies only to purchases. It does not apply to transactions involving many forms of leasing or financing.

Similarly, even if a transaction involves a purchase of supplies, materials or work, other laws may impact a school district’s need to navigate public bidding requirements. For example, purchases involving professional services requiring a high degree of skill are exempt from public bidding requirements, including professional services offered by construction managers, architects and engineers. However, the Local Government Professional Services Selection Act requirements apply when school districts select an architect or engineer.

1

First, Section 10-20.21 applies to contracts for the purchase of supplies, materials or work involving an expenditure of $25,000 or more, allowing school districts to bypass competitive bidding requirements altogether for purchases below that threshold. Be wary, however. Before setting out on a purchase under $25,000 without public bidding, make sure your board of education has not set a lower public bidding threshold. This knowledge will always dictate how you approach a purchase, so long as the policies otherwise comply with the Illinois School Code (even if they are more restrictive).

Second, thresholds under Section 10-20.21 and board policy may not apply to the specific purchase being made by a school district. Indeed, certain purchases related to construction, repairs or renovations not involving a change or increase in the size, type or extent of an existing facility are treated differently under Section 10-20.21 and most board policies. In such cases, the school business official may rely on a higher threshold of $50,000 under Section 10-20.21 without going through public bidding, if allowed by board policy.

Finally, thresholds may be irrelevant altogether in mapping out a purchasing strategy. In fact, public bidding may not be required at all depending on the nature of the transaction. For example,

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UPDATE Magazine Fall 2022

Staying on Track Regardless of Public Bidding Requirements Although not all purchases require school districts to follow public bidding procedures, all school districts should be mindful that purchases typically are made with public tax dollars. As a result, exemptions and other routes around public bidding do not allow school districts to circumnavigate their obligation to be fiscally sensible. Even where public bidding is not required, school districts should consider a request for proposals or obtain quotes from three or more vendors when purchasing goods or services — either as a matter of best practice or as required by board policy. Doing so will ensure the school district pays competitive rates and serves the broader interests of all parties involved, including taxpayers.

Even where public bidding is not required, school districts should consider a request for proposals or obtain quotes from three or more vendors when purchasing goods or services…

ARTICLE / Navigating Public Bidding

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In an Emergency (or not), Leverage Exceptions Even if the type of purchase requires public bidding under Section 10-20.21, there are exceptions for important public policy purposes. If leveraged, the exceptions will reduce obstacles, time, expense and burden of purchasing goods and services via public bidding. The exceptions include: Î Contracts for the maintenance and servicing of equipment by a manufacturer or authorized service agent Î Contracts for the purchase, delivery, movement or installation of data processing equipment, software or services and telecommunications and internet equipment, software and services (otherwise known as the computers exception) Î Contracts for purchases of equipment previously owned by some entity other than the school district Î Contracts for goods or services which are economically procurable from only one source Î Contracts for emergency purchases so long as the purchase is approved by three-quarters (six yes votes) of all school board members While public bidding requirements should not be avoided for the wrong reasons, nothing in Section 10-20.21 prevents a school district from strategically planning to procure supplies, materials and work in a manner that leverages permitted exemptions. Why, for example, spend time and effort to issue a bid for a new multi-use vehicle when you can rely on the used purchases exception by which a used vehicle can be purchased at a reasonable cost to the school district?

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Consider the Path Already Traveled (Cooperative Purchasing) The Governmental Joint Purchasing Act applies to school districts and allows for the purchase of goods or services available through eligible third-party cooperative purchasing programs. Under the Act, a school district can purchase personal property, supplies and services (including construction) jointly with one or more other governmental units.

The Act also allows governmental units to procure supplies and services under any contract “let” by the State of Illinois. School districts can do so by joining the Joint Purchasing Program administered by the Illinois Department of Central Management

Services or entering into arrangements with in-state or outof-state governmentally sponsored cooperatives that meet statutory requirements under the Act. However, not all cooperative purchasing arrangements will comply or qualify for exemption from the bidding requirements of Section 1020.21. Given that this route is full of pitfalls, you should consult your school attorney before leveraging the use of joint cooperative purchasing.

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Be Mindful of Your Public Bidding Documents Suppose Section 10-20.21 requires a purchase to be publicly bid. In that case, the strategic focus of the school business official should be on creating and gathering the necessary information to ensure that their district is in the best position to move forward with a purchase while complying with all applicable public bidding requirements. The first step is to strategically develop the bid documents, which will best position a district to receive bids that are responsive to its needs, flexible in considering alternatives and cost effective.

Documents that can assist the school business official in strategically planning a purchase include the following: Î Advertisement for Bids The Advertisement for Bids is a notice to the public alerting them of the opportunity to submit a bid. Under Section 10-20.21, the advertisement must be published at least ten calendar days before the school district accepts bids, in a newspaper published within the school district or one in the general area of circulation. The advertisement should identify the type of work or purchase but does not need to include every detail that should be included in the rest of the bid documents. Î Instructions to Bidders Instructions to Bidder provide a bidder with an understanding of the scope and size of the project.

Because instructions become part of the purchase contract document, they should be carefully drafted.

Instructions should be sure to reserve the right to reject any bid as well as waive any immaterial variances (meaning the bidder’s variance does not create an economic advantage to that bidder).

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Î Bidder Qualification Criteria Under Section 10-20.21, bids must typically be awarded to the “lowest responsible bidder, considering conformity with specifications, terms of delivery, quality and serviceability.”

In effect, each bidder will need to meet three separate tests.

The first is whether the bidder is the lowest bidder, with instructions that provide that alternates will or will not be used to determine the low bidder.

The second criteria is responsive — i.e., meaning that the bid submitted materially conforms to the specifications included in the school district’s invitation for bids.

The third is whether the bidder is “responsible,” meaning that the school district can consider, among other criteria, a bidder’s history with their own or other school districts, experience on similar sized projects and the bidder’s financial and bonding capacity in order to determine whether the bidder is able to effectively and cost-efficiently deliver the goods or services being purchased.

Once the district determines the lowest, responsive and responsible bidder, the school district may award the contract to that bidder. Therefore, it is critical that school district business officials invest the time to identify the qualifications they would like to have in a bidder awarded a bid and include those in any invitation to bid. Once bids are received, it is too late to set new specifications, qualifications or criteria.

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School district business officials should also be aware of unique circumstances where other factors can be considered when awarding a competitively bid contract, including a district’s letting of contracts for student transportation and food service.

In the case of student transportation, a district may select a bidder “most able to provide safety and comfort for the pupils, stability of service and any other factors set forth in the request for proposal regarding quality of service” before considering price. In such cases, the contract may be awarded to a responsive and responsible bidder despite the fact they were not the lowest bidder.

Similarly, HB 4813 created a new standard for procuring food service contracts—specifically, “goods, services or management in the operation of a school’s food service, including a school that participates in any of the United States Department of Agriculture’s child nutrition programs.”

Like student transportation, a District may consider whether a bidder gives preference to suppliers that promote healthy, locally sourced foods, rely on local food products, use food producers practicing recommended hormone and pest management practices or value animal welfare.

Preference may also be provided to contracts that increase opportunities for businesses owned and operated by minorities, women or persons with disabilities. Î Contract Specifications A successful lowest, responsive and responsible bidder must demonstrate that its bid included the entire scope of the project specifications. School Districts and their professionals should perform a review with the bidder,

ARTICLE / Navigating Public Bidding

of the bidder’s bid documents and worksheets to verify that the bidder included all elements of the project specifications.

Any failure during this review will likely lead to a withdrawal or rejection of the bid, allowing the school district to proceed to the next bidder to conduct another bid review. Contract specifications include, for example, the key functionalities of a technology solution or the specific height of a retaining wall. In either case, the school district is best served by ensuring that the project specifications are identifiable, sufficiently explained and included in the bid documents, particularly for smaller projects where design professionals may not be used. Î Contract and Bond Forms School districts must include all contract terms in the bidding documents, including any applicable bonding requirements. Including such terms in the invitation for bids requires a bidder to accept the terms and conditions of the award before it is made. Once accepted, the bidder may not alter any terms. The school district, however, may negotiate a lower price with the lowest bidder as explained below.

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Lean on Professionals to Navigate Complex Purchases Although not possible in every circumstance, we recommend relying on experienced individuals with expertise in purchasing and construction, especially those involved in designing and managing a school construction project. Often, these professionals can provide valuable insight into the specifications and conditions that schools will utilize when preparing and awarding bids and the necessary considerations for any complex purchase.

More importantly, as suggested above, Section 10-20.21 exempts purchases of professional services like those offered by the consultants, engineers and architects from bidding, which can help the school district during early stages of planning for complex projects without requiring the detailed specifications that would otherwise be required. Note that in certain circumstances, the Local Government Professional Services Selection Act will apply, requiring a school district to comply with evaluation and selection procedures for certain architects or engineers. However, if the school district has a preexisting relationship with an architect or engineer the selection process is not needed.

Careful When Navigating the Public Bid Course Even with the best-charted course, the bidding process can lead to unwelcome detours, especially with respect to cost or bidding confusion. Suppose a school district receives bids that are more expensive than anticipated or have the potential to overextend a budget. In that case, the school district may need to negotiate with the lowest responsible, responsive bidder. Typically, it is best to stay the course. However, in rare circumstances negotiating may be the best path forward. In such circumstances, nothing in Section 10-20.21 prohibits a school district from negotiating in the best interests of the school district once identifying a lowest responsible bidder, provided the negotiations take place prior to the award of the contract and the transaction is free from favoritism, improvidence, fraud or corruption. In any case, school business officials should never negotiate the scope of the contract terms that favors the bidder, even in consideration for a price reduction, as that may give the bidder a competitive advantage over other bidders. In most cases, it may be better to avoid the detour and navigate the next challenge — the budget. Negotiating too often at this stage will dissuade bidders from submitting bids for future projects or artificially inflate their bids in anticipation of needing to negotiate before being awarded a contract.

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Negotiating too often at this stage will dissuade bidders from submitting bids for future projects or artificially inflate their bids in anticipation of needing to negotiate before being awarded a contract.

CONCLUSION

As we mentioned at the outset, mastering compliance with Section 10-20.21 and other bidding requirements seems daunting because it is. School districts must strategically plan, navigate the process and meet the demands of stakeholders while achieving the district’s purchasing goals. While we have tried to provide insight on tools for school business officials when tackling public bidding requirements, please consult with your attorneys or purchasing and construction professionals when engaging in the public bidding process. www.iasbo.org

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RESOURCES Equity Initiatives: What is your district for?

Many school districts have undertaken equity initiatives over the past several years. This action is essential in increasing the quality of public education, but it is also important to determine if these programs are effective.

“Belonging Through a Culture of Dignity”

by Floyd Cobb and John Krownapple presents an excellent approach to the concept of equity in education. Chapter 1 discusses the dysfunctional cycle of equity work, which may ring quite true for many readers who have been a part of equity work. It clearly details the problems and failures of many schools' “typical” approaches.

The next several chapters analyze the keys to a successful equity implementation. The vital elements of such a program are inclusion, belonging and culture. The authors discuss the significance of new approaches that focus on a shared vision of what the school is for, rather than programs built

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around what they are against, such as anti-injustice or anti-bullying. Any successful equity implementation must be based on a vision of what we are working to create.

A necessary change in the current environment for many schools is the shift away from a culture where students need to achieve in order to belong, which is the wrong order. Cobb and Krownapple discuss how the need to belong precedes the need to achieve and belonging uncertainty hinders academic performance and contributes to the achievement gap.

On Their List Book reviews from your peers on relevant career topics

Myron Spiwak Director of Business Services New Trier Township, HSD 203 spiwakm@newtrier.k12.il.us

The organizational culture, along with the climate, form the school's environment. While strategy is certainly important, the culture must be successful before any strategies can succeed. The culture must be positive and nurturing to be part of a healthy environment. The authors describe the four diverse environments provided by the United Nations (excluded, segregated, integrated and included) and show their relationships to belonging and access. They talk about how this inclusive and welcoming environment lays the groundwork for a culture of dignity, which is really at the heart of equity for all.

to shape themselves and, ultimately, the institutional culture. The end result can be a balancing loop called the Theory of Equity Implementation Success which replaces the dysfunctional cycle of equity work found in so many schools today.

The book's final three chapters take the principles described and get into more specific examples and areas where school leaders can transform their current cultures into ones that incorporate the notions of inclusion, belonging and dignity. The process takes time, but readers are shown how

As school business officials, equity work is one of the areas where leaders can have an effect outside of finance and operations. Whatever your district's current state, I encourage you to give this book a read for your own personal development and perhaps as a starting point for the entire organization.

Myron Spiwak spent 17 years working in the Insurance industry before beginning his career in schoolnance. fi Hecurrently serves as the Vice-Chair of the Principles of School Finance PDC. Myron believes equity initiatives will continue to grow as vital parts of school strategic plans.

THE FINAL WORD SPEAKING UP ABOUT PURCHASING MAUREEN JONES ASSISTANT SUPERINTENDENT FOR FINANCE & OPERATIONS/CSBO COMMUNITY CONSOLIDATED SCHOOL DISTRICT 89

My role as a CSBO when it comes to purchasing…

As a business manager in a smaller elementary school district, I am responsible for most aspects of purchasing. I manage relationships with service associates, including securing the best price on products.

I approve all purchase orders as well as review all p-card purchases. When bids are necessary, I manage the bid process from start to finish, including recommendations to the board.

What do you see as the biggest purchasing challenge(s) facing school business officials right now?

The biggest challenge facing CSBO's right now is likely the supply chain issues due to the economy and residual effects from the pandemic. Not only are supplies being disrupted, but each of our outsourced service associates are facing staffing challenges, which in turn raises costs for districts as we renegotiate contractual agreements.

Purchasing issues to watch…

Of course, the CPI continues to drive most of our contractual arrangements and supply costs, and we're hoping to see some relief in this area within the next 12-18 months. Most economists believe we are heading into a recession, which should alleviate some of the purchasing stress we've faced in the last few years.

One thing districts can do today to improve their processes…

I would say continue working closely with your service associates to secure the best pricing possible. I've also begun to look more closely into purchasing cooperatives than I have in the past in order to benefit from volume discounts and purchasing arrangements.

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May 3-5, 2023 Peoria Civic Center Peoria, IL

There is no limit to what can happen when school professionals and industry partners get together to share their expertise and create better solutions for schools.

The 2023 Annual Conference will be in Peoria, IL this spring, packed with the best professional development and networking in school business.

Illinois ASBO

SPONSORSHIP OPPORTUNITIES Strengthen Your Connection at the 2023 Annual Conference!

Our Annual Conference sponsorship opportunities are now available for Service Associate member companies!

Gain valuable recognition for your company and stand out as a key player and help make the Annual Conference so successful.

Find out more at: www.iasbo.org/sponsorships