PHOENIX – February 17, 2014 – Climatec Building Technologies Group (“Climatec”), a leading provider of complete building automation and energy management services, is pleased to announce its continued expansion in Texas with the acquisition of Open Environmental Technologies (OpenTech). OpenTech is an independent building automation and controls contractor with offices in Houston, San Antonio and McAllen, Texas. Terms of the deal were not disclosed.
Founded in 1998, OpenTech has developed an excellent reputation for customer satisfaction, innovation and building technology leadership. OpenTech designs, installs and services building automation and security systems for schools, colleges and universities, government and commercial offices, data centers, and healthcare facilities throughout the greater Houston and San Antonio metropolitan areas as well as customers across east and south Texas, including the Rio Grande Valley. Its founders, David Clark and Rick Grimes will continue to serve as Vice President/General Manager and Vice President Operations, respectively, within the newly acquired Climatec business unit.
“OpenTech is a great addition to our team,” said Terry Keenen, president, Climatec. “We have worked with OpenTech for years and share their passion for this industry. And as they join our existing Dallas and Austin based operations, we’re excited about the opportunity to deliver even greater value and service across all our Texas customers and building partners.”
“This is an exciting next step in the strategic growth of our business,” said Clark. “With the financial and operational backing of Climatec, we look forward to expanded offerings for our customers and new opportunities for our employees as we merge with the Climatec organization.”
“The building automation, security and energy management industry is changing rapidly,” said Grimes. “The combination of OpenTech and Climatec means that our customers will benefit from a wider range of technology solutions and expanded resources as we grow together in Texas.”
Contact:
Marty Applebaum, Vice President of Strategic Business Development
Climatec | 602.504.5661 | martya@climatec.com
Climatec Expands Operations in Texas with Acquisition of OpenTech
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Healthy Budgets, Smarter Students: Battling Exploding Operational Costs
“Based on my years of experience supporting and working in education, it is clear to me that proper lighting, ventilation, heating and air conditioning in the classroom contributes greatly to a student’s ability to focus, learn and grow during their educational journey,” said Jack O’Connell, former two-term California State Superintendent of Public Instruction and current partner at Capitol Advisors Group.
California school districts continue to face severe budget pressures as both utility and construction costs soar, making it increasingly difficult to maintain quality education while managing school infrastructure. Electricity rates are climbing at nearly twice the inflation rate with alarming projections:
- PG&E: 49% increase through 2027 (12.4% annually)
- SCE: 20% increase through 2026 (5.1% annually)
- SDG&E: 22% increase through 2026 (5.5% annually)
These rising costs disproportionately impact schools with aging facilities — over 30% of California schools are more than 50 years old — forcing districts to divert funds from educational programs to cover operational expenses, such as HVAC breakdowns, rising utilities expenses and labor costs.
Construction costs have also seen double-digit increases year-over-year since 2020, with supply chain delays extending equipment delivery to 6-12 months and sometimes even longer. Districts postponing infrastructure projects often face 1.5-3 times higher construction costs than original estimates. The recent devastating fires in Southern California will likely make costs rise even further, due to scarcity of skilled labor, equipment and other essential construction resources.
These fiscal challenges are potentially exacerbated by AB 218, which extends the statute of limitations for filing claims of childhood sexual assault, leading to significant increases in insurance liabilities for districts across California. With rising budgetary pressures, districts must complete their master plans and find savings within their own budgets to maintain fiscal stability while ensuring safe, modern and energy efficient learning environments.
Proposition 2: A Strategic Solution for K-12 Schools
Proposition 2, California’s landmark $10 billion school facility bond, with $8.5 billion specifically for K-12 facilities, offers help to mitigate these budget challenges. The bond includes several key funding mechanisms:
- Energy Efficiency Funding: Provides up to 5% additional funding for projects exceeding Title 24 energy standards, with grants calculated based on the percentage improvement achieved.
- 75-Year-Old Building Replacement: Offers supplemental funding to replace aging buildings when a cost-benefit analysis justifies replacement over modernization.
Additional provisions include Career Technical Education Grants, Small Project Funding, Financial Hardship Assistance and Water Conservation Requirements.
By implementing modernization projects and strategically leveraging Proposition 2 funding, districts can address their ever-growing list of deferred maintenance and aging infrastructure, lower long-term operational costs and provide needed relief to their general fund budgets.
Success Stories: How Schools Can Invest in Comprehensive Solutions
School districts across California are already demonstrating how strategic energy infrastructure investments can deliver substantial returns.
For example, Rowland Unified School District implemented a seven-phase Energy Infrastructure Modernization Program across their 23 facilities, combining various funding sources including state grants, federal stimulus funds and utility incentives. Their investment in HVAC upgrades, LED lighting, building automation systems and renewable energy is projected to generate over $43 million in savings.
Meanwhile, Lakeside Union School District, facing some of the oldest infrastructure in California including century-old energy systems, launched a comprehensive $17.5 million modernization program using Elementary and Secondary School Emergency Relief (ESSER) federal stimulus, private sector funding and local bond funds. By adding renewables and upgrading antiquated HVAC, lighting and roofing systems, the district will realize over $41 million in savings!
Why Proposition 2 Matters: Equitable Funding and Long-Term Support
Proposition 2 establishes a sustainable funding framework through 2033, requiring districts to develop and submit a five-year facilities master plan. The program addresses historical funding inequities by providing greater support to small and disadvantaged districts:
- Base funding: 50% for new construction and 60% for modernization projects
- Additional funding: Districts with high percentages of low-income students or low property values can qualify for increased funding shares up to 100%.
- Small district support: Schools with under 2,500 students receive significant additional support, including reserved funds and project management grants.
- Matching share points system: A point system is applied that can adjust how much the state contributes to the funding of these projects from 60% to 65%, requiring the district to only contribute 35% of the funds needed.
As Proposition 2’s implementation is being finalized, districts should begin taking steps to find cost-saving opportunities.
“California school districts are at a crossroads. The combination of rising energy costs, aging infrastructure and increased insurance liabilities puts a real strain on our ability to prioritize student learning,” said San Bernardino City Unified School District Director of Facilities Planning and Development & California Coalition for Adequate School Housing (CASH) Chair Thomas Pace. “Proposition 2 offers a lifeline — but districts need to act decisively. By investing in smart infrastructure now, we not only reduce long-term operational costs, but we ensure our schools remain safe, healthy and sustainable environments for students and staff alike.”
Steps for Districts to Take Now
With a three-year processing timeline and limited funding, districts must act quickly to capitalize on this transformative opportunity. Proposition 2 funds can be directed toward modernization projects in facilities that are at least 25 years old or where enrollment growth exceeds current capacity. Key steps include:
- Evaluate your master plan and facilities to identify high return-on-investment infrastructure modernization projects, such as HVAC improvements.
- Partner with an energy service provider to implement modernization projects and expedite your planning and execution process to avoid rising costs.
- Identify opportunities for state and federal financial support, like Proposition 2
By investing in energy-efficient solutions now, districts can ensure that more resources remain available for what matters most: educating the next generation.
Co-Authored by:
- Jack O’Connell – Former State Superintendent of Public Instruction, California State Senate Member of the 18th district, California State Assemblymember of the 35th district and Santa Barbara County School Board member
- Thomas R. Jackson – Corporate Vice President Sales & Major Projects, Climatec Energy – A BOSCH Company
New Year, New Everything: 5 Tips City Managers Can Use
With the New Year roaring in with some strong headwinds, many public CEOs and leaders are faced with tough decisions on managing their organizations and budgets amid shifting policies, sustainability mandates, changing laws and unpredictable inflationary pressures. Additionally, new federal policies and state-mandated programs are evolving rapidly, directly impacting municipalities. Below are five key tips to help city managers navigate these challenges effectively.
New State Mandates
The California Energy Commission (CEC) plays a critical role in statewide energy policy, setting efficiency and environmental standards for energy-related products. Recent regulatory changes include the phase-out of specific lighting and refrigerants, requiring city managers to take immediate action.
Transition Municipal Lighting to LED
Tip 1: Assess municipal facilities to identify existing fluorescent lighting and develop a transition plan to other compliant alternatives. Upgrading lighting systems now can help mitigate supply challenges, reduce energy costs and ensure compliance with the new regulations.
Effective January 1, 2025, California will prohibit the sale and distribution of linear fluorescent tube-type lamps (LFLs) and pin-base compact fluorescent lamps (CFLs) for new or replacement lighting systems which can be found in any city facility. This follows the 2024 ban on screw or bayonet-base CFLs.
Evaluate and Upgrade HVAC Systems
Tip 2: Conduct an immediate assessment of municipal HVAC and refrigeration systems to determine current refrigerant use, potential compliance risks and future budget impacts for replacements or retrofits.
Starting January 1, 2025, California will prohibit the sale, distribution or introduction of bulk hydrofluorocarbons (HFCs) with a global warming potential of 2,200 or greater. This regulation primarily impacts cities maintaining HVAC and refrigeration systems that use refrigerants such as R-404A and R-22, which must now be serviced with reclaimed refrigerants (exempt from the ban). New cooling and refrigeration equipment must comply with the updated global warming potential limits or be manufactured and pre-charged with restricted refrigerants outside of California.
Federal Energy and Infrastructure Policy Changes
Tip 3: Stay informed about available funding opportunities and strategically plan infrastructure investments to maximize financial support for your city’s energy and sustainability initiatives.
With a shifting political landscape, there is ongoing debate regarding potential amendments to the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law. Despite political discussions, most experts agree that key funding mechanisms, particularly the investment tax credits available for the installation of clean energy systems (solar, wind and energy storage), will likely remain in place, ensuring continued support for municipal projects. If substantive changes to the IRA are brought forth by the Administration, these would require approval by Congress which will be challenging due to the popularity of the investments and jobs that have been created in both red and blue states.
We don't expect, and I think lots of people out there don't expect, the IRA to completely be blown up and be obliterated.
—Marlene Motyka, Deloitte's U.S. renewable energy leader
Based on a plain reading, as well as the subsequent clarification from the OMB, it would appear tax credits under the IRA fall outside the order’s scope as currently drafted.
Increasing Utility Rates in California
Tip 4: Invest in energy-efficient infrastructure and explore renewable energy options to reduce dependency on volatile utility rates. Implementing energy efficiency and clean energy programs, leveraging low cost funding options and securing state/federal grants and tax credits will help improve City General Funds and mitigate utility rate increases and other budgetary pressures.
The California Public Utilities Commission (CPUC) oversees statewide utility rates, which have seen significant increases over the past decade due to rising generation costs, increased system maintenance costs, wildfire mitigation efforts and the addition of new renewable energy sources to meet electricity demand. Given that utility expenses represent a significant portion of municipal budgets, energy efficiency upgrades, onsite renewable generation and energy storage can offer long-term budget predictability and cost savings.
The rate of electricity price escalation has increased over the past 5-10 years in California. Depending on where you are located in the state, in the past five (5) years electricity prices have increased by 41.6% in San Diego Gas & Electric’s (SDGE) territory, by 73.1% in Southern California Edison’s region and by 71.3% in Pacific Gas and Electric Company’s (PG&E) territory. (See Table and Chart below). Electrical rates in California have been running at two to three times the rate of core inflation and may well continue into the foreseeable future.
Construction Inflation
Tip 5: Expedite planning and execution of city infrastructure projects to avoid rising costs. Conducting an RFP process & securing agreements early can help lock in lower prices and prevent delays caused by high demand for construction resources.
Due to recent wildfires and supply chain constraints, construction inflation in California is expected to rise. The increased demand for materials and labor to rebuild affected areas will likely drive up costs for municipal infrastructure projects. See below for trends in construction costs since 2010.
California cities including San Leandro, Ontario, Clayton, Santa Clarita, Fountain Valley and many more have demonstrated leadership through strategic energy infrastructure investments, mitigating the negative budget effects of spiraling utility prices. Take the opportunity to discuss these topics with your city manager colleagues and find out how they have addressed these difficult challenges and achieved a big win for their city, the environment and citizens.
By proactively addressing these issues, city managers can ensure their municipalities remain compliant, financially stable and well-prepared for the evolving regulatory landscape.
AUTHORS
- Thomas Jackson, Corporate Vice President Sales & Major Projects, Climatec LLC a Robert BOSCH Company
- Bruce Dickinson, President, Eagle Energy Solutions, LLC
