Board Action on Heating and Cooling Systems

In order to provide an outstanding educational experience to the children of District 23, the Board of Education and Administration work diligently to maintain safe and comfortable buildings and grounds that are conducive to effective teaching and learning. As public stewards, the Board and Administration plan for both short and long-term facilities needs, weighing options and making decisions for upkeep, repairs, and replacement of infrastructure. This document provides insight into the discussions and investigations that led the board to make the decision to replace existing mechanicals with a geothermal solution. This solution will bring new heating and air conditioning systems to MacArthur in the summer of 2013 and Ross-Sullivan in the summer of 2014. Eisenhower heating and cooling systems will be updated in the summer of 2015. A final decision on the appropriate heating and cooling system for Eisenhower is still being reviewed. Eisenhower is currently the only building in the district in which classrooms are air-conditioned.

Background

In fiscal 2007-2008 both the ten-year life safety study as mandated by law and the maintenance priority lists for School District 23 were developed. These documents identified a wide range of short and long term needs based upon the significant age of various components (some more than 40 years old), poor efficiency, and declining availability of parts for repair. Key projects were prioritized for repairs, upgrades, or replacement. Targeted projects were roofs, parking lots, lighting upgrades, plumbing, an E911 compliant telephone system, the HVAC work at the administrative center, HVAC at the buildings, and several other smaller projects.

During the 2007-2008 school year the board gave the District the authority to issue $5 million in tax-exempt working cash bonds to be used for the sole purpose of the Life Safety and Maintenance priority projects. These funds were used to pay for the first round of Life Safety and Maintenance priority projects.

It is important to note that funds issued using tax-exempt bonds can only be used for the purpose of construction projects in the District. These funds cannot be used for day-to-day operations or to pay teacher’s salaries.

What projects are left on the Life Safety and Priority Maintenance Projects?

During the 2011-2012 school year, the board began the process of reviewing the next round of Life Safety and priority maintenance projects. Identified projects were:

Update electrical main service for present and future loads

Replace obsolete pneumatic controls - all schools

Replace obsolete unit vents and controls - all schools

Replace boilers that are reaching end of life with energy efficient boilers - Eisenhower, MacArthur and Ross

Replace remaining roofs - Eisenhower, MacArthur and Sullivan

Replace gym and theater air handling units - MacArthur

Replace air handling, ventilation and air conditioning units - MacArthur, Ross and Sullivan

Replace existing pad mounted pumps and associated piping 1st floor - MacArthur

Eliminate 4 separate water heaters and replace with single source. – MacArthur

The homework begins

With the second round of identified Life Safety and priority maintenance projects identified, the board began the process of researching and discussing the most cost effective long-term solutions to accomplish the task. Throughout this process, the board was focused on the following parameters:

Completing 2007 Life Safety and Priority Maintenance Projects

Improving the learning environment for students

Enhancing the work environment for staff

Increasing efficiencies of various systems

Decreasing utility costs

Investigating green technology solutions

The District used the consulting services of Studio GC Architects, CS2 Engineering, and CM Engineering to investigate the issues, identify solutions, and provide cost analysis.

As this process evolved, three options emerged:

1. Complete a limited portion of Maintenance Priority Projects (highest need, no air conditioning)

2. Complete a limited portion of Maintenance Priority Projects (highest need) and install traditional air conditioning

3. Install Geothermal Heating & Cooling system – replacing mechanicals in all four schools, providing air conditioning in all schools, and completing all Maintenance Priority Projects.

At the May board meeting a cost analysis for the three options was presented. At this meeting the option to install traditional air conditioning was dropped as it did not meet the board’s identified parameters and proved to be the most costly option.

The two options remained:

1. Complete a limited portion of Maintenance Priority Projects (highest need, no air conditioning)

2. Install Geothermal Heating & Cooling system – replacing mechanical in all four schools, providing air conditioning in all schools, and completing all Maintenance Priority Projects.

Cost analysis sheet presented at the May board meeting

The homework continues

The administration and the building and sites committee continued to work with Studio GC Architects, CS2 Engineering, and CM Engineering to answer additional questions regarding the geo-thermal option.

In May, the board directed the administration to contract for the drilling of a test bore to further refine costs and confirm feasibility and cost estimates for a geothermal option. District administration and board members conducted a site visit to a school in Aurora that is in the process of installing geothermal. A school in Belvidere was also interviewed. This school completed a geothermal project seven years ago. They were able to provide first hand information regarding utility savings, system maintenance and customer satisfaction.

Q&A for the geothermal

Does the district have a plan to pay for this?

During the entire process the District and the finance committee researched ways to finance the various options presented to the board. This process involved interviews with PMA Financial Network, Inc. and William Blair & Company, L.L.C. These firms offer financial analysis of proposed projects, advice for debt structure, and assist schools in the process of issuing working cash bonds for construction projects.

In June, after reviewing information and studying costs, the finance committee recommended the board use William Blair should they decide to issue working cash bonds to fund the construction projects.

At the July board meeting, William Blair outlined the various options for issuing working cash bonds to finance the construction options. William Blair also reviewed possible debt structures, terms, and related costs.

Mindful of the impact to taxpayers, the board examined the three key components that impact the local taxpayer: the equalized assessed valuation (EAV), the Cook County multiplier, and the debt payment per year. Of these three components, the District can only control the debt payment per year. Therefore, as the board moves forward with issuing the bonds, the board will look to structure the bond payment so that it would not exceed $1.1 million per year, in hopes of minimizing the impact to the taxpayer.

In July, the board passed a resolution of intent to issue $10.7 million in working cash bonds for construction purposes. This amount covers the cost of either of the two options:

1. Complete a limited portion of Maintenance Priority Projects (highest need, no air conditioning)

2. Install Geothermal Heating & Cooling system – replacing mechanicals in all four schools, providing air conditioning in all schools, and completing all Maintenance Priority Projects.

At the board meeting on August 15th a public hearing was held regarding the bond resolution. The board has up to three years in which to issue the bonds. It is important to note that funds issued using tax-exempt, working cash bonds can only be used for the purpose of construction projects in the District. These funds cannot be used for day-to-day operations or to pay teacher’s salaries.

The following illustrates the separation of operating funds and tax-exempt working cash bonds.

Operating Funds

Education Fund: Supplies and salaries/Benefits

Operation and Maintenance Fund

Transportation Fund

IMRF/Social Security/Medicare

Tax-Exempt Working Cash Bonds

(Appears as a separate line item on your tax bill)

Used for construction purposes only

What did the Board vote on in August?

At the board meeting on August 15, 2012, school board members of Prospect Heights School District 23 approved an amendment to the district’s agreement with Studio GC Architects. This decision gave the architects and engineers direction to develop construction documentation for 2013 projects that reflect the second option:

· Install Geothermal Heating & Cooling system – replacing mechanicals in all four schools, providing air conditioning in all schools, and completing all Maintenance Priority Projects.

Why did the board decide to make a decision in August?

There are three key reasons the board accepted the administration’s recommendation to move forward at this time:

1. The items identified on the Life Safety Report and the Priority Maintenance List needs to be completed. The longer we delay, the more money is wasted to fix outdated equipment.

2. The cost to borrow money is at historic lows.

3. By making a decision in August, the board will be positioned to receive favorable bids on construction projects. It also assures equipment will be in the buildings on time so that school can open on time in August of 2013.


Achieving Excellence in Learning Through an Equitable Education for All!
700 N. Schoenbeck Rd.  Prospect Heights, IL 60070    P: 847.870.3850
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