Project $ debated (02/24/2009)

One project at East Elementary School got a green light Monday, but a second was tabled after a lengthy discussion of competing philosophies on how to fund school building improvements.

Jay School Board members voted 5-0 to approve the low quotes for dry wall, glass wall, and furnishings to continue the transformation of East away from its original "open concept" design. (Board president Bryan Alexander was absent, and board member Mike Shannon had to leave the meeting early because of another engagement.)

The project will add more semi-permanent walls and will relocate the library to the front north corner of the educational space, separating it with glass panels.

Segraves Walls and Ceilings Inc., Portland, will do the metal stud and dry wall construction at a cost of $12,350. Progressive Office/Trendway, Portland, will provide the glass walls at a cost of $42,779. And Seely Office Solutions, Fort Wayne, will provide furniture, "learning walls," ands panels for $148,245.

All three were the low quotes, and all were recommended by K.R. Montgomery, Anderson, the architect on the project. The board had earlier approved carpeting from Georgia Direct at a cost of $48,205.

An Indiana Construction loan of $350,000 from the state was received in 2008 for the project.

But while that work was approved with no debate, board members spent more than an hour discussing approaches to replacing East's heating and cooling system before tabling the issue.

"We have a lot of stuff to think through," board vice president Greg Wellman said when the matter was tabled. "I think we need some time."

Superintendent Tim Long had proposed upgrading the heating and cooling system by using a state funding method known as Senate Bill 516, which would allow the school corporation to take out a 10-year loan from a local bank to finance the work.

The loan, in turn, would be paid off with annual payments from the school corporation's capital projects fund.

In 2010, the school corporation will stop making an annual payment to Honeywell Corp. from the capital projects fund under an expiring contract on energy savings. When the Honeywell contract ends, the capital projects fund will have about $850,000 more available each year for work on school buildings.

Long's suggestion has been to take on a number of projects at several schools, most of them involving heating and cooling systems, and use the Senate Bill 516 method to pay for them over time.

Work totaling as much as $3 million could be paid off over 10 years via the capital projects fund while still allowing about $500,000 for emergencies or other projects such as roof work.

But board member Mike Masters expressed concern about that approach, indicating he'd prefer taking one project at a time on a pay-as-you-go basis.

"I can't support further borrowing," said Masters.

"I understand Mike's perspective," said board member Jay Halstead. "I'm kind of torn which way to go."

"It's an approach," said Long of Senate Bill 516. "I'm not saying it's the only approach."

Board members pressed business manager Brad DeRome for a recommendation on which way to go but received little guidance. "It still involves debt," said DeRome. "But we pay it out of CPF (capital projects fund). We don't pay it out of debt service."

"To me," said Long, "it makes good fiscal sense to do it over time."

Further complicating the issue was the fact that Senate Bill 516 projects are bid in a different way from most school capital projects.

In a typical project, an architect is hired to develop specifications, those specifications are advertised, and bids are received.

With Senate Bill 516 projects, which tend to focus on energy efficiency, school systems ask firms to develop solutions to building problems. Those solutions vary depending upon what approach those firms take. Their proposals are then reviewed by an architect, who makes a recommendation on which proposal is best.

In the case of the East heating and cooling project, Honeywell submitted a bid of $274,000 for its solution while Performance Services Inc. submitted a bid of $318,506 for its approach. Architect Kari Vilamaa of Barton-Coe-Vilamaa, Fort Wayne, told the board the Performance Services proposal was "more through and applicable" than Honeywell's.

"We're not bidding apples to apples," said Long. "We're bidding solution to solution."

School board attorney Phil Frantz added, "That's the way this law works, that you ask for a solution."

Even if the board had decided which company would get the work, the project would still be subject to financing and legal review, Frantz noted.

In other fiscal matters, DeRome reported the school system received its state basic grant funds for January and a total of $23.9 million in state basic grant funds is expected this year.

"We're very early into the process" with the new state school funding mechanism, DeRome said. "They have told us they will give us that money every month without delay."

DeRome also reported that the Department of Local Government Finance had approved a budget appeal made in November of 2008 to reflect higher diesel fuel costs.

In other business:

•Board members adopted two new goals for the school system, replacing the major part of the roof at the high school above the mechanical room and staffing for the 2009-2010 school year with reductions by attrition when possible by May of this year.

•Long said visiting Chinese school administrators Yuchun He and Naiqui Du will be touring the Jay County and Muncie area next week. A reception for them will be held at John Jay Center for Learning Monday evening.

•Long reported that the number of students taking the free and reduced lunch at the high school has increased as a result of the new automated system that provides students with greater anonymity.

•Board members accepted an $800 donation from Saint-Gobain Glass Containers, Dunkirk, for new wrestling uniforms for West Jay Middle School.

•The board hired Dana McClung, Gary Tarr, John Ferguson, and Dan Orr as adult education teachers at John Jay Center.

•The board approved extra-curricular assignments for Andy Schmit as head wrestling coach at East Jay Middle School, Bill Back as boys' track coach at West Jay, Larry Stultz as boys' track coach at West Jay, Violet Current as girls' track coach at West Jay, and Erin Schmiesing as volunteer assistant tennis coach at Jay County High School.

•The board accepted the retirement resignation of Warren Lowe at the end of the school year as a sixth grade math teacher at East Jay.

•The board approved a field trip to King's Island by the West Jay band and choir and a bus request by the Hispanic Coalition.

•Summer school programs at East Jay and West Jay were set from June 15 through July 24, with July 6 off, from 8 a.m. to 12 p.m.

•Assistant superintendent Wood Barwick reported that enrollment in vocational/technical classes at JCHS totaled 2,042 this school year.[[In-content Ad]]Should the Jay School Corporation operate its own medical clinic for employees as a way of controlling health care costs?

School board members aren't sure.

A proposal to establish such a clinic, which would provide free doctor's office visits and lab work before the school corporation's health insurance kicks in, was tabled Monday until board members can visit a similar clinic in another school system and meet with officials there.

Board members also indicated they'd like school employees to measure their interest.

Business manager Brad DeRome brought the concept to the board after discussions with R.E. Sutton and Associates, the school system's health insurance consultant.

DeRome said the clinic is an attempt to get a handle on ever rising costs of medical expenses under the school system's self-insured coverage. "We endured a 9 percent increase in medical expenses in 2008," DeRome said.

Total medical costs paid through the self-insurance funds totaled $5,815,000 in 2008.

"On-site clinics are a new and an old philosophy," said Ann Roberts of WeCare TLC, a Florida-based company that Sutton had recommended to operate a Jay Schools clinic. "We work with an employer to establish a clinic site. ... This belongs to the school system. ... We then assume management of the medical team." WeCare would also assume all legal liability.

Roberts estimated that with a clinic in place the cost of primary care visits would drop by 66 percent, pharmacy costs would drop by 55 percent, and outpatient laboratory costs would drop by 85 percent.

DeRome envisions the clinic to be located in a portion of the old Garfield school building, which was most recently the administrative office building. "It seemed like a logical use," he said.

Start-up costs to furnish and equip such a clinic, as well as make any necessary alterations to the building, were estimated at $45,921.

WeCare estimates that recurring costs for operating the clinic would be $312,491 per year. That would include the services of a physician 16 hours per week, a registered nurse 20 hours per week, and a medical assistant 20 hours per week. It would also include lab costs, pharmacy costs, and supplies.

Use of the clinic by school employees, spouses, and their insured children would be optional. But because there would be no charge, Roberts said, the clinics have proven popular.

Only three or four school corporations in Indiana have established similar clinics.

"We anticipate easily a 1 to 5 return on investment," Roberts said, meaning that each dollar invested in the clinic would result in a $5 reduction in health insurance costs.

"We don't run anyone out of practice," Roberts added. "We're not a threat to (existing medical practices)."

But board members expressed both caution and skepticism.

"Every thing on this paper is an assumption," board member Jim Sanders said of the WeCare proposal. "Saving money, I'm all for that. But I'd like to see a survey."

Sanders and board member Mike Masters will join school officials on a visit to a school corporation clinic in northeastern Indiana operated by WeCare to learn more.