Schools approve letter to secure reimbursement on future bond

By Matt Bower
Posted 7/14/16

At its meeting Tuesday night, the School Committee unanimously approved drafting a Letter of Construction Necessity to the Rhode Island Department of Education (RIDE) as the first step toward …

This item is available in full to subscribers.

Please log in to continue

E-mail
Password
Log in

Schools approve letter to secure reimbursement on future bond

Posted

At its meeting Tuesday night, the School Committee unanimously approved drafting a Letter of Construction Necessity to the Rhode Island Department of Education (RIDE) as the first step toward securing state aid reimbursement funds for future construction projects and improvements to school buildings that are planned to be covered by a new voter bond referendum.

Chief Budget Officer Anthony Ferrucci explained the need for the Letter of Necessity prior to the vote.

He said at school committee meetings on Aug. 11 and Nov. 10 of last year, a capital project priority list was presented to the committee utilizing four sources of funding: $3 million of existing cash from previously authorized bonds, where funds were remaining due to consolidating secondary schools; approximately $10 million worth of performance-based contracts for HVAC system installation throughout the district that was supposed to be financed by future cost savings through the TRANE Corporation; $9.2 million in voter approved authorized bonding, of which the schools and city agreed $5.1 million was authorized for HVAC replacement at Veterans Junior High School as well as a number of health and safety issues at Vets, Pilgrim, and Winman; and $26.5 million worth of remaining work (considered to be of the highest priority) would be covered by future bonding needing voter authorization.

That is what was initially presented to the school committee last year, but based on commitments made for all construction projects approved for this summer, “and the results, or lack thereof, in securing performance-based contracts for HVAC systems,” Ferrucci said the school department had to revisit and revise the capital plans that were previously presented. This includes the need to significantly increase the future bonding request from $26.5 million to $90.8 million (over a 20-year period), which would account for 36.5 percent of the long-term facility report’s recommended level of funding needed for projects throughout the district.

“While the amount of the recommended bonding is significantly higher than originally presented, our request includes many significant enhancements for the district,” Ferrucci said. “Items such as ADA compliance, district-wide paving, asbestos abatement, and investments in energy efficiencies that were not part of the initial presentation but are absolutely necessary.”

Ferrucci said it was recommended city voters consider the bond referendum in November 2017 so that funds would be available for summer work in 2018, adding that the school department anticipates needing the remaining $4 million in current authorized bond funds for summer 2017 work.

“Based on the anticipated referendum date of November 2017, RIDE requires a Letter of Construction Necessity be filed by Aug. 1, 2016,” he said, adding the district would be eligible for a 40 percent RIDE reimbursement, or approximately $36 million.

Ferrucci said one of the issues dramatically impacting projections has to do with the performance-based contract projects, namely the HVAC system installations through the TRANE Corporation, the highest priority being the heating system at Veterans Junior High School, which had been experiencing problems last year and needed to be replaced as soon as possible.

“TRANE Corporation has not provided sales agreements, contracts or financing documents in order for Warwick Public Schools to execute the transaction,” Ferrucci said, adding that failure to provide these needed documents to start the design/build process has forced the school department to fund the project with bonded funds that are to be reimbursed with state aid.

“Upon presentation of Warwick Public Schools’ design/build program to RIDE, we were informed that this is unacceptable, as a design/bid process is required to qualify for state aid,” he said. “In addition, in order to qualify for state aid, there are additional covenants required addressing air circulation, noise mitigation, and other ‘green’ building design requirements, which substantially increase costs.”

Ferrucci said the original TRANE proposal was for heating system replacement, but the changes RIDE requires also impacts non-heating areas, such as ceilings, gas mains, and other infrastructure items. He said the department is incurring $210,000 in additional architectural and engineering fees to produce bid documents and construction management oversight.

With the requirement to go out to bid, Ferrucci said the whole project has been delayed and will not be initiated until after the summer of 2016.

“Until bids are received, we are uncertain as to the start of the project, the actual cost for the new system, and when it will be operational,” he said, adding the school department has established a backup plan in the event of a system failure prior to replacement.

Ferrucci estimated the cost would range from $5.5 million to $7 million, a significant increase from the $3.5 million that had initially been authorized for the project.

“This level of cost can only be met by securing additional funding, most likely through the $4 million worth of authorized bonded funds still available,” he said. “Having to wait for that source of funding, the project will likely have to be scheduled for the summer of 2017.”

Committee members expressed their anger and frustration with RIDE over the new requirements to be eligible for state aid.

“We were pre-approved for $25 million in bond funding, with $3.2 million for the heating system [replacement] at Vets, but now with the new system for qualifying [for state aid] and construction, it’s forcing us to pay much more and to not start on time,” said Jennifer Ahearn. “We could have done this with our own money and not been reimbursed and had it done on time for the start of school [this year].”

Ahearn said she was concerned what would happen if the current system were to fail this winter.

“We believed something would occur for our students and now we have to go back and figure out how to keep them warm and safe,” she said.

Ferrucci responded, saying, “All staff is prepared to maintain Vets as being safe and comfortable for everyone to get through.”

Karen Bachus said, according to the consolidation plan proposed by long-term planning consultant Symmes Maini & McKee Associates (SMMA), Vets was not supposed to open as a junior high until a year from now in 2017.

She continued, saying this past school year there were instances of steam pipes opening up, resulting in steam going into a classroom.

“People have gotten ill because of what’s carried through the pipes,” she said. “This is a huge concern and disappointment for Warwick. RIDE is holding us hostage and putting us in a bad position.”

Terri Medeiros echoed her colleagues.

“We were happy to get through this past winter by the skin of our teeth,” she said. “We were all set to fix Vets, then we were presented with this noose from RIDE.”

Committee Chairwoman Beth Furtado added, “This is RIDE’s fault, not ours. We have to make do with what we have and move forward.”

Ferrucci said following approval of the Letter of Necessity, a bid document would be created and released in the next 30 days.

“SMMA is developing the design for the bid to meet RIDE guidelines,” he said.

Ferrucci said $3.5 million of the $5.1 million in current authorized bond funding would be held in abeyance for the new heating system.

When Ahearn asked about the debt service (principal and interest payments on the bond), as Warwick is the only school district in the state responsible for paying debt service on bonds for capital improvements to buildings owned by the city, Ferrucci said it would cost approximately $4 million per year on the 20-year bond.

In addition to the Vets heating system, Ferrucci said the following would be covered under the $90.8 million proposed bond referendum: $6.4 million in electrical upgrades; $11.3 million for roofs; $7 million for a state-of-the-art athletic complex in the area of McDermott Pool and Thayer Ice Rink; $15 million to become ADA-compliant district-wide, the bulk of which would go toward making elementary classrooms wheelchair accessible; $3.5 million for district-wide paving; $2 million for security enhancements, locks and hardware; $13 million for windows, doors, sealing, and other energy efficiencies; $6.5 million for LED lighting; $7 million for asbestos abatement; $4.4 million for architect and engineering work; and $5.8 million for contingencies.

Ferrucci said the department projects to save $3 million by closing additional elementary schools, which are to be determined.

“It’s gratifying to see the work that has been done this summer, but there’s a great deal yet to come,” Superintendent Philip Thornton said, adding it would cost $250 million to complete what’s needed throughout the district. “We start the conversation tonight about starting the first chunk of that [work].”

Comments

4 comments on this item Please log in to comment by clicking here

  • Imhere

    Phil Thorton says it's gratifying to see the work being done, but this incompetent waste of a superintendent let's 4 fourth grade students be touched and does nothing but cover it up, or sends the school dept lawyer to court to help the problem child who does the touching. Then he gets his " cover up crew" which consists of of another incompetent person who is the director of elementary education Lynn Dambruch who said she would be uncomfortable if this happened to her but let this happen to these 4th grade girls and turned a blind eye along with the useless and even more incompetent John Gannon the so called principal who doesn't even leave his office and can only say his hands are tied. Which leads me to believe that Dambruch and Gannon are just puppets and Thorton the puppeteer pulling all the strings. The best thing would be these people to admit the issues and take care of them before some other young girl has to deal with this problem child and have to deal with the most incompetent waste of tax payer money starting with puppeteerPhil Thorton, and his trusty little puppets Lynn Dambruch and John Gannon which make up "the cover up crew". A resignation would be in order from all of these wastes!!

    Thursday, July 14, 2016 Report this

  • Stella

    Lipstick on a Pig does not change anything. Residents PLEASE read the final report from SMMA, the numbers are sobering. Ferrucci said the school department had to revisit and revise the capital plans that were previously presented. This includes the need to significantly increase the future bonding request from $26.5 million to $90.8 million (over a 20-year period), which would account for 36. 5 percent of the long-term facility report’s recommended level of funding needed for projects throughout the district. 20 years and only 36.5%, no design, permitting engineering or cost over runs in current dollars. Based on what I have been told from reliable information VETS will need intervention from the GODS to be completed in the next six weeks. Go take a look for yourself, your paying for it. Today is tax day is it not. One last thing, this is not RIDEs fault. It is poor planning by a group that lacks the real knowledge to oversee these type of projects. They paid a 1/4 of a million of your money but didn't follow the plan. RIDEs FAULT?

    Friday, July 15, 2016 Report this

  • JohnStark

    This is a perfect example of why RI needs to eliminate it's state sales and income tax. Warwick (and every other city and town) taxpayers send their hard-earned money to Smith Hill. That money is then returned in the form of services, but with conditions. In this case, the state will only return money to it's origin if locals jump through requisite (and rather expensive) hoops. Of course, said hoops keep countless beaurocrats on the state payroll, satisfying various cousins, brothers-in-law, etc. It's absurd!

    This should be a very, very interesting September.

    Friday, July 15, 2016 Report this

  • markyc

    I agree with Stella. This is & has been a poor planning job by the School Committee. If the heating system is as bad as indicated, the School System can't wait & roll the dice this winter. It's unfortunate that the School Dept. can't obtain the 40 % reimbursement from RIDE, but that is the cost of mismanagement/incompetence. Maybe the School System/School Committee will have to delay the state of the art plans for the McDermott Pool & Thayer Ice Rink. It appears obvious that the School Committee can't set priorities; they should have planned the upgrade/installation of the new heating system at Vets before making other improvements to athletic facilities, etc. during the summer. In addition, a teachers' contract apparently is the last item on the SC's agenda-a bad PR move to say the least. Round 2 of consolidation is currently proceeding & I have little confidence in the SC with the situation as it is.

    Monday, July 18, 2016 Report this