Penquis Valley facility upgrade referendum on Thursday

MILO — On Thursday, May 10 residents of the SAD 41 towns of Atkinson, Brownville, LaGrange and Milo will head to their respective polls to vote on an approximate $2.3 million heating system upgrade and energy efficiency project at the Penquis Valley School.

“This is a project that is a long time in the making,” Superintendent Michael Wright said during a May 2 public information session at the school. “Back in 2011 we put in two new boilers in this complex. Then we wanted to look at what it would cost to upgrade the heating system from steam to hot water.”

Wright said this started a process of looking at the bigger picture for the now 52-year-old facility as well as the other buildings in SAD 41.

“One plan is to make this site, the Penquis site, a K-12 facility, that was about a $10 million local project,” he said. That got tabled and after it was tabled the state opened up new school funding.”

SAD 41 has applied to the Maine Department of Education for approximately $7 million to construct an elementary wing on the Sebec River side of the Penquis campus. “We will know in about a year if there is any possibility of that going forward,” Wright said, saying that in recent years both grades 6 and 5 have moved to the West Main Street complex.

“The heating system here we have been looking at for quite a while,” he said, as the steam system has been in place since 1966. “It might last for a few more years or you could come in some morning during the heating system and be out of commission for a while.”

The superintendent said nearly one year ago SAD 41 residents approved a near $500,000 project for an elevator and sprinkler system at Penquis through the state’s revolving renovation fund. He said 70 percent of the costs are covered by the state while the district pays the remaining 30 percent back over five years. If the May 10 referendum passes, then work on the two projects would be coordinated.

Wright said Honeywell, which has been working at the Penquis building for multiple decades, was selected for the $2.3 million heating system upgrade and energy efficiency project. He said the Maine Municipal Bond Bank would provide a loan to the district.

“That would be about a 3 percent interest rate, we would look to pay it back over 20 years,” Wright said. He said at a fixed estimated rate of 3 percent the annual gross bond cost would be $156,277 before four areas of savings.

The existing budget cost offsets are $21,787. Another $40,000 could be cut from the maintenance budget after the upgrades, and savings are also planned with a $25,000 reduction in Honeywell service contract payments and another $5,000 reduction in the maintenance budget.

The annual project cost would go from the $156,277 annual bond cost to an annual net cost of $64,490 — with an estimated $418,177 net project cost. The near $65,000 would become part of the SAD 41 budget starting in the 2020 fiscal year.

“If this is approved by voters we would seek interim financing through Camden National Bank,” Wright said, as the Maine Municipal Bond Bank issues its loans in the spring and again in November.

“If you stay in this site it’s not a matter of if but when, when you are dealing with these costs,” Jim Lucy of Honeywell said. He said the building is 52-years-old, and “things have a useful life.’

Lucy said a main project objective is to update a steam heating system that is beyond its useful life in order to improve reliability, comfort, indoor air quality and safety. Other objectives are to replace old windows to improve comfort and save energy, reduce the annual energy and operating costs and also reduce future building repair costs.

He said some pipes have leaked and steam leakage can be a safety issue. “It’s always cheaper to be proactive and plan for that rather than react,” Lucy said.

The conversion from steam to hot water would cost a little more than $2,031,370, an LED lighting upgrade would be $160,360, another $100,000 would be for window replacement and $33,600 would go toward building envelope upgrades. The total cost is $2,325,334.

“We are going to tighten the building up to reduce costs and increase comfort,” Lucy said about the other project components.

“This is by far the cheapest way you can borrow money in the state of Maine,” he said about the Maine Municipal Bond Bank loan. “The new annual net cost is the $64,490, that’s the estimate.”

“If it does get approved we are really set up as an organization to get this done in in a little over four months,” he said.

A project timeline says that should the referendum pass on May 10, the execution of the loan and Honeywell contracts would be done on May 18. Construction would start June 8 with substantial completion done by Sept. 28 and the project signed off on Nov. 30.

During a question and answer question session, Lucy said “pipes in good shape will remain.”

“All classroom heaters will be replaced,” Cory Hatch of Honeywell said. He said the change is needed because of the system upgrade and because due to the age of the heaters many replacement parts are no longer available.

Lucy said if the referendum is voted down, “we will just deal with it as it comes” in terms of issues and fixes to the heating system.

Wright said voters should also keep the status of Atkinson in mind as the community is looking to deorganize, and if this measure in November fails the town is still looking to withdraw from SAD 41. Wright said a withdrawal meeting is scheduled for 7 p.m. on Wednesday, June 20 at the Atkinson town office.

The superintendent said Atkinson officials and the district have both approved a withdrawal agreement to provide SAD 41 with some safeguards. Per the withdrawal agreement, should Atkinson deorganize the community would pay $275,000 to SAD 41 and cover 10 percent of debt incurred through June 30, 2019.

“They do have to pay for this loan because it would incur before they leave,” Wright said.

He said in 2017 the referendum on the school revolving renovation fund for sprinkler and elevator system upgrades
was voted down in Atkinson via a count of 75 to 14. The question passed in each of the other communities and the combined total across the four towns was 179 in favor vs. 135 opposed.

Wright was also asked about a potential comprehensive high school with SAD 46 of Dexter and the Guilford-based SAD 4 (the department of education is still mulling how to allocate $200 million in funds for three ranked projects between the region and a pair in Aroostook County).

“We decided even if it was 10 miles down the road, this is a building we would still need to maintain,” Wright said, as middle and elementary school students would attend Penquis if grades 9-12 went to a new campus.

A project summary can be found at www.msad41.us. Polling hours for the four towns are 10 a.m. to 8 p.m. at the Atkinson town office, 10 a.m. to 5 p.m. at Brownville Elementary, 10 a.m. to 7 p.m. at the LaGrange town office and 10 a.m. to 8 p.m. at the Milo Town Hall.

Observer photo/Stuart Hedstrom
SAD 41 REFERENDUM ON THURSDAY — SAD 41 Director of Buildings and Grounds Donnie Richards shows an area of a middle school classroom at the Penquis Valley complex in Milo that needed to be jackhammered in order to reach a steam leak. On Thursday, May 10 SAD 41 residents will head to the polls to vote on an approximate $2.3 million heating system upgrade, converting from steam to hot water, and energy efficiency project.