The Delaware auditor’s office is raising questions about a $67.4 million deal between the state and the Delaware Sustainable Energy Unit in 2011 - saying it’s unclear whether efficiency upgrades agreed on will net any savings.
The upgrades include projects for the Department of Corrections, Delaware State University, Legislative Mall buildings in Dover and others.
Specifically for the Legislative Mall projects, the deal promises projected $10.8 million in efficiency savings over the next 20 years.
But the report says those projections are based off estimates alone and the state may have to recoup those losses if they don’t come to fruition.
Chief administrative auditor, Kathleen Davies, says no documents given to her office definitively show any savings.
“The state entered into a complex agreement, did not do any due diligence or study in advance to determine the feasibility, a feasibility study, to see if this was actually worth the money or if we’re able to measure it,” said Davies.
SEU executive director Tony DePrima refutes the results of the audit, saying that auditor office staff members aren’t qualified to interpret the complex data.
Contractors who oversaw the individual projects are required to submit yearly reports outlining actual savings. A report regarding the Legislative Hall Project for 2014 shows a little under $10,000 in extra savings over projections.
DePrima says even says that the state is able to get a refund even if the estimates are off base.
“Even in these contracts, those savings that are calculated, if they’re not there as planned they are guaranteed. That is, the contractor has to pay back to the state any savings that were not realized,” said DePrima.
However, the contract between the state and SEU says the debt “…will not be affected, modified or impaired by the occurrence of any event or circumstance, including termination of the [agreement] for any reason, including default or failure of [the contractor] fully to perform any of its obligations…”
The state will continue to pay for the upgrades through 2033.
At Legislative Hall, the General Assembly gaveled back into session for 2016.
It was a fairly light day, with Democrat David Bentz’s swearing in ceremony representing the main event.
Bentz replaces former Rep. Michael Barbieri who stepped down last year to take a $144,000 a year job leading the state’s Division of Substance Abuse and Mental Health.
He thanked Barbieri, who was sitting close behind him, and took the oath of office with his wife Sara and parents standing close by.
“I appreciate all the support and all the outreach and encouragement I’ve gotten in the last couple of weeks leading up to today and I look forward to hopefully getting the opportunity to work with you all in one way or another where our interests overlap,” said Bentz.
More substantial work comes Wednesday when the House Revenue and Finance Committee debates changing Delaware’s corporate income tax structure. Proponents say the change will spur creation of jobs, but it will cost nearly $50 million in revenue over the next three years as it’s phased in.
