School board looks at program to replace nearly 60 percent of its HVAC units
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The Grady County Board of Education is another step closer to financing $14.5 million of facility upgrades with ABM Building Solutions LLC.
A called meeting of the school board was held Tuesday afternoon at the Cairo High School College and Career Center auditorium where a presentation was made by Rick Higginbotham, Ray Jordan and Joel Lowery of ABM.
Board members present included Chairman Jeff Worsham, Vice Chairman Teresa Gee Hardy, and Derrick Majors. Board members John White and Laura Register were absent.
Through a “Guaranteed Energy Savings Contract” with ABM, the school system is looking to replace nearly 60 percent of the school system’s HVAC units, or 408 of 746 that have passed their useful life and in need of replacement.
According to Grady County Schools superintendent Dr. Kermit Gilliard, all HVAC units 2006 and older will be replaced. The cost of the replacement of HVAC units, alone, is nearly $6 million.
Through the ABM contract, all lighting in county school facilities will be upgraded to LED, which is more energy efficient and the bulbs last 10 years.
New plumbing fixtures will be installed that conserve water and pedal vales will be installed in school cafeteria kitchens to reduce the cost of heating water.
School facilities will be weather proofed to eliminate wasted heating and cooling of buildings and to make the facilities better insulated.
ABM and Grady County School System officials have identified humidity as an issue in school buildings.
Also included in the scope of the project is central energy management controls that provide for remote access and monitoring of lights and HVAC systems. The new control system will also alert school food service personnel if equipment fails to maintain required food temperatures.
Dyson hand dryers will be installed in all schools which greatly reduces the need for paper towels, trash bags and plumbing issues caused by paper towels being flushed down toilets.
A lightning alert system will also be installed at Cairo High School as part of the overall project and a transformer upgrade at Washington Middle School will also take place.
Should the board give the final approval to the contract with ABM, 304 new security cameras in county schools will be installed and a SMALLab STEM learning center will be created at a location to be determined.
The program also includes 2 years of preventive maintenance on all HVAC equipment and one year of preventative maintenance on the electronic controls.
“This program allows you to take care of needs with money you are already spending,” Rick Higginbotham of ABM said Tuesday night.
In short, the system is financing up to $14,594,240 over a 20-year term and the debt will be paid by the guaranteed savings from reduced energy and operational costs plus $125,000 annually from the Education Special Purpose Local Option Sales Tax. After five years, the board could elect to pay the debt in full and reduce its interest expense.
“What if we end up saving more than you guarantee?” board chairman Worsham asked.
“That’s your money, not ours,” Higginbotham said.
Ray Jordan of AMB, who was formerly a school superintendent in Turner County, said that when he retired as superintendent the system there in his final year saved $368,000, which was more than the $250,000 ABM had guaranteed.
“Has there been anywhere it didn’t work?” Chairman Worsham asked.
The ABM officials said that in two instances the guaranteed savings had not been met and ABM had paid the school systems the difference.
Joel Lowery of ABM said that the firm was about to have to pay Pelham City Schools a check because the level of savings had not been realized as ABM had projected. However, ABM officials said the reason savings had not been realized were due to modifications that had been made by the school system later. “We didn’t catch it in time to correct it and we’re still going to write them a check,” Lowery said.
ABM officials said their crews are working in Pelham to make changes so that the projected savings will be realized in future years.
“Regardless of if it is year one, 10 or 20 you would do the same thing?” Worsham asked and Lowery indicated that was correct.
If the school system were to decide not to pay off the debt early, Jordan noted that the school system would have $14.5 million in improvements to its facilities for only $2.5 million of new, out-of-pocket money.
Chairman Worsham said that the Grady County School System has the “finest finance director in the state” in Dan Broome and although he is always cautious in his financial projections, the school board chairman said Broome was always on the money.
“If he (Broome) is comfortable with it, I’m good,” Chairman Worsham said.
Broome said he had been wary in the beginning, but after eight months of talks and study he was confident with the program. He also said he favored the prospect of being able to pay off the outstanding debt after five years and cutting the interest expense if funding is available to pay off the debt early.
Higginbotham said that if the school system did pay it off early, “every bit of the savings would be general fund savings for the system.”
“This provides us an opportunity to do something that has the potential to be great for our school system,” Chairman Worsham said.
Dr. Gilliard told the board members present Tuesday night that he and maintenance director Dave Mitchell and Broome had looked at including additional projects into the ABM program, but he was not comfortable in committing to any more than $125,000 in annual payments for the next 20 years.
The superintendent said his team had also considered the possibility of only doing what projects could be funded solely through the savings, but that limited the scope of the program and not all of the HVAC replacements and other needed improvements could be accomplished.
On a motion by Vice Chairman Harris and a second by Majors, the board voted 3-0 to authorize the chairman and superintendent to execute a resolution which authorizes Worsham and Gilliard to negotiate a contract with ABM once approved by the school board’s attorney and to contract with ABM for a financed amount not to exceed $14,594,240.
Final approval of the financing is expected to take place at the board’s April meeting on April 9 and construction could begin as early as May 1 and would be completed by May 2020. The school system’s first principal and interest payment would not be due until May 2021.