Boonville District work session ends without decision on Hannah Cole HVAC; another session is planned
When leaks were found in the HVAC system at Hannah Cole Primary School two years ago, they initially were a minor issue. By the time a third leak was discovered May 2019, it had started to affect district costs.
The first discussions on how to fix or replace the system took place Dec. 16 by the Boonville school board. Due to the intricacies of the issue, the board elected to hold a work session Monday for further discussion.
Electrical and water costs at the school started to spike when the third leak was found, Assistant Superintendent Fred Smith said.
"We actually had Clearview Mechanical fix that leak," he said. "By August or September, we had an additional leak."
The district has taken a piecemeal approach to repairs. When a leak or other issue is discovered, only that item is fixed, rather than a comprehensive repair. This has led to a financial bind with regard to the Hannah Cole HVAC.
Complete repair costs or system replacement costs will run between $1.5 million up to $3 million. This depends on which avenue the board goes with — repair or replace.
"We have been struggling to cool the building in the summer and keep it warm in the winter, Smith said.
The district has met with a variety of organizations to discuss the repair or replacement over the past 18 months. When the board met Dec. 16, it was with representatives of Performance Services Inc. and EnergyLink.
"EnergyLink had the best way for us to possibly help supplement and pay for (repair or replacement)," Smith said. "PSI is the only company out of 11 that we talked to that took the reins and actually gave us a plan that was comprehensive and would take care of all the needs of the system."
When the district would hire individual companies to conduct repairs, they all would have different ideas of what was wrong with the system, District Maintenance Director Josh Bird said.
"Without us picking one company and getting a guarantee. If we put this all on one person, we are protected," Bird said.
The agreement with PSI and EnergyLink would include room temperature and electrical bill guarantees, among others to ensure the system is running at peak performance. While there were guarantees with other repair companies in the past, they were not as specific as with PSI and EnergyLink.
PSI already has worked with the district on its cooling tower. That work did not need amendments to the scope of work and the company even added needed equipment to the cooling tower at no additional cost.
"That is the kind of company they are and the work that they do," Bird said.
Other companies offered to repair parts of the HVAC system, but PSI was the only one that was willing tackle all the issues it is having, Smith said.
Board Vice President James Gann was concerned the HVAC project was not caught sooner during a facilities review. Any sort of decision on the work was tabled again until the board could hold another work session as more information is gathered and questions are answered by PSI, EnergyLink and district financial advisers.
"We may have prioritized our bond revenues differently had a comprehensive review of our facilities reflected that more accurately," Gann said. "It's not a criticism. I'm just pointing that out. Where I'm most upset is the piecemeal approach we've taken in the past."
While all the work district staff have put into the HVAC project is appreciated, it still is at least a $1.5 million cost and should be bid out, said Sam Giroux, board treasurer.
"It's great we are taking a holistic approach to the entire system and it needs to be done, but there has to be someone that can do a competing bid with a warranty for that kind of money," he said.
Going from $100,000 in repair costs to $1.5 million will be hard sell for the community without other bids, he added.
The district would not be hiring PSI to do the repair work, Bird said. They are a lease company that would hire the mechanical companies.
"All of the performance guarantees by PSI are by the lease company," he said. "We have a guaranteed payment on utilities."
This means by working with PSI, if the system is not as efficient as promised, the district utility bills won't change. The district would have an agreement with PSI on the equipment.
"This was the only company that was able to do the design-build to fix (the system)," Bird said.
Giroux still would like to see some more explanations on the financial aspects of the plan and how it relates to district and investor costs. There are some differences in costs that he wants an explanation on, such as utility cost changes.
Superintendent Sarah Marriott did contact L.J. Hart and Co. about using some district reserves to cover the repair costs. She is hesitant to touch the reserves because the financial forecast for the fiscal year still is not clear.
The district also has the option of looking at a no-tax bond issue. A bond issue would have to be decided by the board in January for it to be on the April Ballot. The bond would be for $4 million.
There is a lease payment option, which could be a different type of financial burden on the district, Marriott said. Capital payment reserves are minimal and the district is trying to build those back up.
The district could put off the bond issue until 2022, which is when the amount available would be greater. This means it still would need to do repairs as needed. The district could do a heating repair that will get it through this winter first, which could address some of the $1.5 million costs, rather than the major project.