The Chilmark and West Tisbury schools are both eyeing next steps for major capital projects that have been on the horizon for years, including a new HVAC system for Chilmark and a new roof for West Tisbury.
At an Up-Island Regional School District (UIRSD) committee meeting Monday, officials decided to pursue an intermunicipal agreement (IMA) between the school district and the member towns of Chilmark, Aquinnah, and West Tisbury so that Chilmark could serve as the borrowing entity for the Chilmark School HVAC project.
Taking into consideration funds that were already approved at up-Island town meetings last year for this project, the school is looking at an approximately $946,000 bill. Along with an overhaul of the HVAC system in the school, the project also includes upgrades to the building envelope and insulation.
According to Martha’s Vineyard Public Schools business administrator Mark Friedman, this price tag in its entirety would be far too costly to bring forward as a warrant article, as Chilmark would have to foot 80 percent of the cost, per the regional cost-allocation formula (West Tisbury and Aquinnah would split the remaining 20 percent).
The two primary options Friedman proposed to committee members both related to borrowing the funds needed for the project.
One option that was not pursued by officials was for the school district to borrow the money directly, and although it would be the most straightforward approach, Friedman said, it might be more expensive in the long run.
According to financial advisor for the school district Lynne Welsh, the district in this case could use permanent State House loan notes, also known as serial loan notes, to acquire the necessary funds. If the district did issue the debt securities themselves, the school committee would take a vote, and member towns would have 60 days to call a special town meeting to approve or deny the debt issuance.
But the option that was ultimately approved by the committee was to pursue an IMA that would establish the town of Chilmark as the borrowing entity and the three towns and the UIRSD would enter into the agreement that money for the bond payments will be incorporated into each member school’s operating budget, based on the cost-sharing formula for the life of the bond.
Under this scenario, Chilmark will encumber all the costs of bond issuance, and they would be responsible for putting the project prospectus together.
“That’s where this IMA comes into play, because usually the district would borrow the funds first and then assess the member towns,” Welsh said.
Committee member Robert Lionette said he wants to put a firm time limit on the IMA, so that if it becomes too complicated to get all three towns on board, the district could move forward on their own with the serial loan notes.
According to Chilmark finance committee chair Robert Hannemann, the select board has voiced its support for the school project, and he noted that they were the ones to first propose the IMA option.
The committee voted unanimously to start the process of engaging member towns in an IMA, with the final document for the plan and cost projections needing to come back to the UIRSD for final approval.
Raze the roof
The West Tisbury School is in dire need of a roof replacement, after having to implement temporary fixes over the years, and installing additional roof membrane to repair leaks.
Last spring, up-Island towns voted at town meetings to appropriate around $322,000 for the roof project.
Most recently, the school district has gone out to bid and secured the services of Russo Barr Associates, an engineering firm based out of Woburn.
The engineers recently evaluated the roof at the school, including taking test samples and performing detailed inspections, and have since come up with a preliminary design and cost estimates.
Their estimate is that bids could be in the area of $495,000.
“So from the get-go, we have a potential funding shortfall for this project,” Friedman said. “They had various descriptions of why the cost estimate came in that high, including possible building code issues.”
Engineers also evaluated the potential of increasing the R-value of the building envelope by installing additional insulation, which would make the envelope more secure and would create energy savings for the school.
“Turns out the return on that R-value investment for additional insulation would result in about $300 a year of energy savings, so we do not recommend including the additional insulation at this time,” Friedman said.
Taking into account a contingency for modest construction inflation, the district is looking at an approximately $598,000 total estimated cost, according to Friedman. Even with the $322,000 that has already been appropriated, that leaves a shortfall of about $276,000.
With the additional insulation, the shortfall would be closer to $321,000.
According to Amanda Sawyer of CHA Consulting, based in Albany, N.Y., the owner’s project manager for the project, she commonly sees school districts run into issues with deferred maintenance. When a district is working toward a warranty on something like a roof, Sawyer said, they often use “Band-Aid fixes” until the warranty runs out.
“There is a lot of roof surface up there, and I think the school did the best they could to remedy some of the issues. Over the years there have been repairs done, and there was a roof replacement done on top of the original roof. When you do that, there start to be issues that pop up,” Sawyer said.
School officials unanimously agreed to send a letter to member towns notifying them of this decision to request a warrant article to cover the cost, including the insulation upgrade.