Questions Raised during Oregon-Davis HVAC Project Hearing

Oregon-Davis School Board

The Oregon-Davis School Board has decided to keep moving ahead with planned heating and cooling upgrades, despite some surprise at the potential cost. Board members had been under the impression that bringing the HVAC systems at the two schools up to date would cost a total of $6 million. But the list of projects presented Monday by guaranteed savings provider EMCOR totaled almost $13.2 million.

“I think it’s a little sticker shock,” said School Board Member Kurt Hayes. “When I was with our last person who was here in charge, our understanding was that the $6 million would cover [it]. The two buildings together were done. That was my understanding from my last person who was here before [Education Consultant] Mr. [Jim] Dermody got here.”

“We never said that,” stressed EMCOR representative Tim Pitts. “We didn’t tell him that because we haven’t done our due diligence.”

Pitts said costs would be expected to come down as more research is done, and some items could be removed from the project scope, while others could be pushed off until future projects. Bond Counsel Thomas Peterson pointed out that the $6 million budget was determined based on what Oregon-Davis could afford without raising taxes.

Board Member Kyle Hinds voiced some concern that EMCOR was the only company to respond to O-D’s request for qualifications. Under the guaranteed savings process, EMCOR would guarantee that the project wouldn’t exceed a maximum price.

During a public hearing on the project’s financing, Lee Nagai had some concern with that process and also asked if it was premature to sell bonds before knowing how much work needs to be done. But Peterson noted that it’s common for schools to come up with a budget figure first and try to check off as many items as possible from a “wish list.” It was also pointed out that EMCOR is not technically under contract with the school corporation yet, but Peterson felt that now would be a good time to take action on a bond sale, due to the extremely low interest rates.

After more than an hour of discussion, the school board took action to allow the bond sale through the lease-rental process. That’s where a legally-separate building corporation that technically owns the buildings issues the bonds and then leases the facilities back to the school corporation. The bonds are expected to be sold later this week.