Penquis Valley facility upgrade referendum March 14

MILO — Nearly a year after residents of the four SAD 41 communities voted down a referendum on an approximate $2.3 million funding package for a heating system upgrade, converting from steam to hot water, and energy efficiency project at the Penquis Valley School, a revised project will be brought forward for a vote at the polls on Thursday, March 14 with an information meeting the week before at 5:30 p.m. on Wednesday, March 6.

“We are making another run at the energy efficiency upgrades at this complex,” Superintendent Michael Wright said during a Feb. 6 school board meeting at Penquis Valley. “We would look to have an informational meeting, which is required by law, on March 6 and the referendum on March 14.”

“If you remember the last time, Atkinson really voted it down but it passed two to one in the other towns so I would hope it passes this time around,” he said.

In May 2018 a $2.3 million project was voted down via a count of 161 to 111 across the four district communities. Residents of Brownville, LaGrange, and Milo passed the question 106 to 42, but in Atkinson the referendum was turned down 114 to 5.

Atkinson is scheduled to deorganize and join the Piscataquis County Unorganized Territory (UT) as of July 1. Had the project been approved last year then the community would have been responsible for 10.4 percent of the upgrade debt moving forward. As part of the UT, Atkinson students will head west to RSU 68/Foxcroft Academy in Dover-Foxcroft.

In December the SAD 41 directors approved an amendment to the withdrawal agreement with Atkinson in which the town would not be liable for new debt approved prior to June 30, 2019 in exchange for an agreement by Atkinson that its selectmen will strongly recommend to the community’s voters to support approval of the new debt by district voters. Wright said the attorneys for the district and Atkinson would draft paperwork to be signed to formally have this stipulation in place prior to next month’s referendum.

“We have a commitment from Atkinson that they would not contest the referendum,” Wright said.

Bob Marcotte, lead energy engineer on the project for Honeywell which has serviced SAD 41 facilities for multiple decades, provided an overview of the energy infrastructure upgrade by saying “The main driven of this project is your existing steam heating system.”

“When a heating system is 40-50 years old, that’s the time piping experiences leaks,” he said with the original 50-plus -year-old infrastructure still in place at Penquis Valley. “Given the age of the system it’s far exceeded the age of its service life.”

“The upgrade of the heating system will be to change from steam to hot water,” Marcotte said. “All of this work will result in a decrease in your energy use,” and he said this would reduce the annual energy and operating costs as well as reduce future building repair expenses.

“New equipment requires less repair, less replacement,” Marcotte said.

The gross proposed project cost is $2,414,923, with a little more than $2.1 million for the steam to hot water system conversion, about $190,000 for LED lighting upgrades, and an additional $34,700 for building envelope improvements.

Marcotte said the project would be financed with a 20-year bond through the Maine Municipal Bond Bank. The estimated annual bond cost, fixed for 20 years starting with the 2021 fiscal year, is $177,694 but there would be various measures in place to reduce the costs.

SAD 41 would have $19,046 in existing budget savings for energy usage and another $40,000 in operating budget capital contributions. The Honeywell service contract would be reduced by $25,000, the maintenance budget could decrease by $2,500, and there would be a one-time Efficiency Maine rebate of $29,195.

The net project cost would be $61,953 for the first year. “That is new dollars we don’t currently have in the budget,” Wright said.

The annual cost would vary over the 20 years but the estimated net project cost over the two decades would be $744,143.

“I think we have gotten to a point where if we want to continue to use this building we have to do something,” Wright said. “You certainly can’t get this job done without an impact on the budget.”

Should the referendum pass, then the loan and contract with Honeywell would both be executed on March 27. Construction would start on June 8 with substantial completion done by Sept. 28 and the project sign off on Nov. 30.

Wright said developing a budget is an annual challenge and this will be true again for 2019-20 with the loss of Atkinson and with the to be determined state subsidy figures.

Board member Denise Hamlin wondered about any forthcoming maintenance projects.

“We should be sitting good for quite some time,” Director of Buildings and Grounds Donnie Richards said about the district’s four schools.

Another project for Penquis Valley involves a sprinkler system and elevator. In 2017 SAD 41 citizens approved an approximate $474,000 loan from Maine’s school revolving renovation fund. Under the program the state covers 70 percent of the costs, with the district paying back the remainder over five years at zero percent interest (30 percent would be a little more than $142,000 or $28,000-plus annually over a half decade).

“We put that back out to bid and the bids are due to us by Feb. 26,” Wright said.

“If you recall last year we got no bids on the sprinkler system,” he said, with the summer timeframe being an issue from some contractors and as a result the state granted an extension. “We have through August of 2019 to complete those projects. So it is out there and we are hoping to hear something in the next few weeks.”

Wright said the sprinkler/elevator and heating system project work would be coordinated.