Schools to borrow for HVAC work

Jay Schools will borrow nearly $2 million to fund a major overhaul of heating, ventilation, and air conditioning systems at Redkey, East, and Westlawn elementary schools this winter.
And it’s possible a similar amount will be borrowed in 2011 for even more extensive work at West Jay Middle School.
In both cases, the loans would be repaid over a period of ten or more years by annual installments from the school corporation’s capital projects fund under a system known as a “516 plan.”
Board members approved the elementary school projects Monday on a 4-3 split vote that capped nearly 18 months of debate over how best to address HVAC needs at the four schools.
Supporting the move were board president Bryan Alexander and board members Larry Paxson, Jay Halstead, and Mike Shannon, who argued that with historically low interest rates and the likelihood of higher construction costs in the future the move makes sense.
Opposing the action were board members Mike Masters, Jim Sanders, and Greg Wellman, who opposed taking on additional debt and expressed concern that the West Jay work should be a higher priority than the elementaries.
The debate between those prepared to borrow and those supporting a pay-as-you-go approach has been the focus of several board meetings and occupied more than an hour Monday night.
“Our goal from the financial side was to level out our bills over a period of time,” said superintendent Tim Long. “I think this is a good approach to get all those buildings up to speed and level out our costs. … Our goal was to get the most done and still minimize the payments.”
“You’re not going to borrow any cheaper money,” said Halstead. “I think the 516 in this case is the way to go.”
Under a 516 plan, a school corporation can borrow money from a bank then pay it off over time by dedicating a portion of its capital projects fund to make the payments. The Jay Schools capital projects fund is about $3.1 million per year, and payment on the 516 loan for the elementary school projects would amount to about $250,000 annually depending upon the interest rate and term of the note.
Because the payments would come from within the capital projects fund, the work would not increase property taxes, Alexander noted.
Long has recommended the 516 approach in part because it would allow flexibility within the capital projects fund to handle needs at other schools that may develop.
CSO Architects, Indianapolis, conducted a study of HVAC needs at all Jay County schools and targeted the three elementaries and West Jay for work. All three elementaries would receive HVAC upgrades similar to those done recently at Bloomfield Elementary School. The work at West Jay would be significantly more expensive, involving a boiler, cooling tower, and replacement of heating lines.
Work on the elementaries was considered phase one because it could be done during the school year, Long said. The West Jay work is so extensive that it could not be done until this summer when school is out.
But Sanders argued that West Jay’s problems are more pressing.
“That chiller over there is in terrible shape,” he said. “That’s the first place to go in my opinion (and) I think we pay as we go.”
Halstead disagreed. “It’s just unrealistic to think about pay as you go on that big a project,” he said. “I like the pay-as-you-go concept. I just don’t think it’s possible.”
Work on West Jay is estimated to cost $2 million, and Long said he expects to return to the board seeking approval for another 516 plan financing of that project early in 2011.
“Here’s my whole problem,” said Wellman. “The board said we’re not borrowing any more money” in the wake of a large bond issue for work at Jay County High School. “It makes no sense to me to do East, Redkey, and Westlawn today because they’re not emergencies.” He added that he could support a 516 plan loan for work at West Jay because problems are imminent there.
Alexander countered that the focus should be on property taxes, which the 516 plan will not increase, rather than simply on debt. “Debt is a wonderful tool,” he said. “We’re not raising taxes. That’s my whole thing.”
Work on the three elementaries will be done by A. Hattersley and Sons, Indianapolis, at a cost of $1,996,350, according to John Rigsby of CSO Architects. Hattersley had the lowest quote of four proposals and worked with Rigsby to bring the price down even further.
Long informed the board that a line item is being created in the budget for security as a committee involving Halstead and Masters continues to look at the possibility of adding a “school resource officer,” a law enforcement liaison officer to handle security issues at JCHS.
It’s possible such a position could be funded with federal stimulus money, Long noted.
“I think this is an area to really look at,” said Halstead, a longtime member of the Indiana State Police. “Our ultimate goal is to keep kids safe.”
But Shannon was skeptical. “If we follow this path, getting one safety officer doesn’t make sense to me” given the size of the JCHS campus, he said.
“You have to start somewhere,” countered Masters.
“The most important thing,” said JCHS principal Phil Ford, “is not how many, but the personality of the person you put in there.”
In other business, the board:
•Heard a positive report on the Jay County Mentoring/Kids Hope program which links church-related mentors with elementary school students one hour each week.
•Reviewed guidelines on Wednesday night activities with an eye toward creating formal board policy. “We’ve tried to clear out the Wednesday nights, but we’re not there yet, Mr. Wellman,” said assistant superintendent Wood Barwick. Wellman has long urged a weeknight free of school activities as a way of helping families and church groups.
•Approved a resolution allowing short-term borrowing from the Indiana Bond Bank to help with cash flow in 2011 while awaiting property tax distribution.
•Noted training for new board members has been set for Dec. 16. Elizabeth Krieg and Ron Laux will join the board in January, while Alexander and Halstead will be leaving the board.
•Contracted with Dr. Ruth Jones and Dr. Susan Albrecht for services under a Safe Haven grant.
•Hired Dennis Dwiggins and Ted Habegger as driver education teachers, Adolfo Solis as an instructional assistant in English as a second language classes, Cindy Grile as a third grade teacher at General Shanks Elementary School, David Lindsey as a second shift custodian at JCHS, Kristen Gibson as a fifth grade teacher at Redkey, and Michelle Concannon as an instructional assistant at Redkey.
•Accepted the resignation of Ashley Clevenger as an instructional assistant in English as a second language classes and Rhonda Alig as a food service employee.
•Approved a leave of absence for custodian Richard Hummer.
•Approved extracurricular assignments for Nicholas Ehrhart as assistant boys’ swim coach at JCHS, Holly Patz as junior varsity softball coach at JCHS, Gary LeMaster as eighth grade girls’ basketball coach at West Jay, Joella Rinker as sixth grade girls’ basktball coach at West Jay, Joni Ostrowski as assistant swim coach at East Jay Middle School, William Saxman as sixth grade boys’ basketball coach at East Jay, Greg Garringer as volunteer wrestling coach at JCHS, and Ryan Smitley as assistant wrestling coach at East Jay.
•Accepted the resignation of Tyler Hunt as assistant varsity football coach at JCHS.
•Approved field trips by robotics classes, the Marching Patriots, FFA, and the Thespian Club.
•Approved a bus use request by the Girl Scouts.[[In-content Ad]]