BFR & Energy Innovation Comm - June 11, 2007

[Guest sullinss]

Proceedings of the Joint Meeting

Budgeting For Results Committee and the Energy Innovation Committee

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

June 11, 2007

Call to Order

 

The Budgeting For Results Committee and the Energy Innovation Committee of School District No. 2, Yellowstone County and High School District No. 2, Yellowstone County, Montana met in a joint meeting at Lincoln Center, 415 North 30th Street, Billings, Montana, on Monday, June 11, 2007. Chair Katharin Kelker called the meeting to order at 5:30 p.m. and led those assembled in the Pledge of Allegiance. Budgeting For Results Committee members present were: Joan Sleeth, Katharin Kelker, Shanna Henry, Peter Grass, Don Stanaway, Dan Farmer, Duane Smith, Mary Jo Fox, and Joel Guthals. Absent were members Curt Prchal, Kari Altenburg, Malcolm Goodrich, and Stan Barr. Member Jerome Chvilicek has resigned from the Committee. Members in attendance from the Energy Innovation Committee were Rich Whitney, Larry Grendal, Ed Gulick, and Jeffrey Gruizenga. Also present was Controller Sheri Weidinger, and Trustee Peter Gesuale.

 

Communication From the Public

 

There was no communication from the public.

 

Consent Agenda

 

Joel Guthals moved to recommend Board approval of Consent Agenda items as follows:

1. Minutes of May 14, 2007

2. Addition of Technology Special Fund Trust Account at Lincoln Center

3. Addition of Poly Drive Field Trip Trust Account

4. Addition of Special Funds Trust Account at Beartooth Elementary

5. Addition of Student Council Extracurricular Account at Beartooth Elementary

Dan Farmer seconded the motion. The motion carried unanimously.

 

Energy Conservation RFP Recommendation

 

Joel Guthals moved to remove this item from the agenda. Peter Gesuale seconded the motion.

 

Joel explained we need to make sure we comply with all legal requirements before we move forward with the proposal. Three Montana statutes may apply to this particular project: 1) Title 18 pertains to requirements for certain professional services; 2) Title 19 pertains to bidding services and capital projects; and, 3) Title 90 pertains to energy performance contracts. The District proceeded as though it was a professional contract and used the RFP process. Counsel’s review has determined the need to study the proposal to see if a different procedure is required by law, such as formal advertising with sealed bids through a public process. Once we know it complies with the statutes, It will be brought back to the Budgeting For Results Committee for a recommendation to the Board.

 

We received two proposals and one company submitted an amended proposal which raises an issue of concern. Based on these two concerns Superintendent Copps does not want to pursue a recommendation until we are assured we are proceeding with the correct process.

 

Dan questioned using an outside company versus performing these duties internally. Joel said the Energy Innovation Committee believes the success of an energy savings program requires hiring an outside provider. Don asked if local firms were considered. Joel answered they checked with local firms and the publicly requested proposal solicited two responses, neither of which was a local firm. No firms were favored or excluded from the proposal; it’s a specialized area and few companies are involved in this kind of work.

 

The vote was called for to remove this item from the agenda. The motion carried unanimously.

 

 

Energy Payback Projects

 

Rich Whitney explained a request came via the Energy Innovation Committee to explore initiatives to reduce operating costs. Following is a list of potential projects that would generate enough energy savings to recoup our investment over a period of time, along with a rough estimate of costs:

 

1. Skyview Heat Exchanger – allows use of outside air for cooling - $100K or more, payback of 20-24 months

2. Building Management Systems – continue to get schools onto current internet based building management systems and off the 1980 STAEFA system that we can no longer buy parts for. Potential sites include Senior, Lincoln, West, McKinley and other elementary schools. If we have a failure it would take three times more energy than necessary. Replacement costs vary between schools ($20K-$150K) depending on the amount of equipment and controls required

3. Last 5 rooftop HVAC units at the Career Center - $725K, payback of 7+ years. The life of a HVAC unit is 15-20 years, and these units are 33 years old and are failing

4. Senior High Phase 2 HVAC Project - $2.5M – not a big payback item

5. Big Sky Elementary and Will James variable frequency drives allows the motor to run only at RPM’s as needed for heat - $10K, payback of 4 years

 

Possible funding sources include INTERCAP loans, savings from Energy Resource Programs, Deferred Weatherization & Maintenance funds, and other options. Rich will have a more definite idea of cost and payback time in a couple weeks.

 

The Energy Innovation Committee recommends moving forward with the Skyview Heat Exchanger as a quick payback item to be funded from the high school budget. The variable frequency drives also have a quick payback. The other projects are more expensive. Available dollars should be determined by the Finance Office; explore sources of alternative funding; and, then other projects can be targeted to move forward. Peter Grass suggested the Board examine a potential five-year building reserve for future projects.

 

Dan Farmer moved to direct Administration to do more detailed work and come back with budgetary and potential sources of funding for each of the projects. Peter Grass seconded the motion. The motion carried unanimously.

 

Clean Renewable Energy Bonds Projects

 

Joel reported the Board authorized Administration to proceed to enter into agreement with engineering firm Matney-Frantz, LLC in Bozeman to assist in putting together up to three proposals for clean renewable energy generation using the Clean Renewable Energy Bond program. This federal program was implemented this year by the Montana Legislature to allow school districts to issue revenue bonds to investors. The bonds are interest free, and the investors get tax credits. The market for this area has determined the projects will be for wind energy, and the engineers will look for suitable sites for windmills. Applications need to be filed by July 13, 2007. The energy generated by windmills produces revenue or savings. When the investors are paid off, all savings will go to the District. There’s a 16 year payback on the bonds, but they are actually paid off in 9 years, so we save almost as much as it costs.

 

There will be three applications at $1,000 per application to be paid from the FY2007 budget (contingency funds). Feasible projects will go to the Board as an application which will need to be submitted to the Federal Government. We are then in competition for these funds. Upon approval it will come back to the Board to decide if it wants to proceed with the project. If approved, it goes through the due diligence phase which is $5,000 per application (from FY2008 budget) which will be submitted to the bond underwriter and to potential investors. At that time the Board could authorize the bonds to be written and sold, and then we select engineers for the project.

 

The bond documents establish how the systems are managed and maintained. There has to be a third party maintenance contract with companies that specialize in maintaining these windmills. Larry said energy generated would most likely go back to N Western Energy to grid and sell; or, if we buy back we would install a grid. Rich said we need to be considerate of the neighborhood and make sure they buy in to this project since the windmills are not quiet.

 

Tuition Rates 2007-2008 School Year

 

The Office of Public Instruction has set the maximum out-of-district tuition rates for the 2007-2008 school year at 20% of the new entitlement. For year 2007-08, the cost of educating a student is higher than the maximum tuition allowed.

 

Duane Smith moved to recommend the Board approve the maximum allowable tuition rates FY2007-2008 to be $457.90 per student for Pre-K and ½ Time Kindergarten, $915.80 per student for Full-Time Kindergarten and Grades 1-6, and $1172.20 per student Grades 7-12. Shanna Henry seconded the motion. The motion carried unanimously.

 

Financial Reports – May, 2007 (Unaudited)

 

The Committee reviewed the unaudited Financial Reports for May, 2007. 91% of the year is complete with 96.4% of the elementary budget and 93.8% of the high school budget spent.

 

Bills Paid – May, 2007

 

Joel Guthals moved to recommend the Board approve the bills paid for May, 2007. Mary Jo Fox seconded the motion. The motion carried unanimously.

 

Health Insurance – Financials – April, 2007

 

The Committee reviewed the Health Insurance Financials for April, 2007. $1.3M is factored in on the balance sheet as a projected liability for run-out claims. Don suggests the District check into coverage for stoploss on group claims as well as on an individual basis.

 

Preliminary Budgets FY2007-08

 

There will be a Board work study session on budgets on July 9, 2007 in the Board Room at 5:30 p.m.. The State funding package includes a 3% increase in the general fund operating budget for next year; but only a 1+% increase in funding for the second year. This may cause some serious funding shortages in the second year.

 

Joan said she was not seeing where all the total costs are for Beartooth. Staff came from other schools, but equipment, etc. was taken from other school buildings; therefore, where is the money coming from to replace that equipment at the schools it was taken from, and was this in the original plan.

 

Dan stated the Chamber of Commerce put a lot of capital and effort into the levy promotion and would like to do so again. They would like to give a list to Chamber members at the end of the summer of what was promised and what was accomplished regarding the budget.

 

There will not be a Budgeting For Results Committee meeting in July. The Chair reminded members to turn in their Committee Membership Applications for next year.

 

Adjournment

 

There being no further business, the meeting was adjourned at 7:02 p.m.

 

 

 

 

 

Katharin Kelker, Chair

 

 

 

 

Sherrill Sullins, Recorder