SAD 41 board signs paperwork for $2.4M Penquis Valley facility upgrade

Stuart Hedstrom • April 11, 2019

MILO — Last month SAD 41 voters overwhelmingly approved a $2.4 million funding package to upgrade the Penquis Valley School heating system. The vote was 152-25 with the referendum approved in each district community: 7-1 in Atkinson, 55-9 in Brownville, 19-5 in LaGrange and 71-10 in Milo.

During a school board meeting on April 10 at the school, the directors formally approved the computation and declaration of votes and signed the project loan agreement.

Last May a $2.3 million project was voted down via a count of 161 to 111 across the four 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 would strongly recommend to the community’s voters to support approval of the new debt by district voters.

Atkinson traditionally paid about 10.8 percent of costs and this 10.8 percent of the project would be absorbed by the other three towns based upon the amendment to withdrawal agreement. Atkinson made its one-time payment of $275,000 to SAD 41 prior to withdrawal on April 1.

“That will help our fund balance,” Superintendent Michael Wright said during the school board meeting.

The Penquis Valley project has three objectives. The first is to update the steam heating system infrastructure that is beyond its useful life, to improve reliability, comfort, indoor air quality and safety. The other objectives are to reduce annual energy and operating costs and reduce future building repair costs.

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, another $190,000 is for LED lighting upgrades and an additional is for $34,700 for building weatherization improvements.

The project would be financed under a 20-year bond through the Maine Municipal Bond Bank. The estimated annual bond cost, fixed for two decades starting with the 2020-21 fiscal year, is $177,694 but there would be various measures in place to reduce the costs.

SAD 41 would have a little more than $19,000 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 for the first year there would be a one-time Efficiency Maine rebate of $29,195.

The first year project cost is $61,953, which would become part of the 2019-20 academic year budget. SAD 41’s estimated total net cost, after the various savings measures such as reduced energy expenditures and a reduction in the Honeywell contract, over 20 years would be $744,143. The annual portion of the $744,143 to be paid by the district would vary year by year.

With the referendum approved, the loan and contract with Honeywell were both executed in late March. Construction would start June 7 with substantial completion done by Sept. 27 and the project sign off on Nov. 29.

In other business, Wright mentioned the budget committee met earlier in the evening. He said he would schedule the next session for after vacation as the 2019-20 spending plan is being developed.

Last month superintendent said the district is set to receive nearly $150,000 more from the state than in 2018-19 for an Essential Programs & Services (EPS) figure of about $5,877,800. Wright said the local required amount needed to receive the EPS funds is down by about $238,000 to approximately $1,347,000.

The superintendent said while the state subsidy is up from the current year, the local contribution is down and the difference would need to made up somewhere to have a budget comparable to the current near $9.1 million spending plan.

Despite Atkinson exiting SAD 41, the local required contributions for the other towns would be down between $11-$40,000 each for 2019-20. The early projections are about $435,500 for Brownville, nearly $246,000 for LaGrange and approximately $665,700 for Milo.

Wright also said he did not want to cancel classes two days prior with a spring snowstorm but SAD 41 ended up having its 10th snow day of the year. On April 10 there was a two-hour delay to avoid increasing the 2018-19 total to 11.

He said he has spoken with the Maine Department of Education about having a waiver granted for seniors, who with the April 8 cancellation would have 169 days of instruction or one less than the required 170 days. Wright said the waiver would just be for the Class of 2019, who graduate on Sunday, June 9, as otherwise there would have to be Saturday classes in May.

Saturday classes were held on March 30 from 8 a.m. to noon and April 3 and May 8 were both converted to full days for students to help make up some other snow days.