Aldermen, Board of

A special meeting of the Board of Aldermen was held Monday, June 07, 2010 at 7:00 p.m. in the Aldermanic Chamber. President Brian S. McCarthy presided; City Clerk Paul Bergeron recorded. Prayer was offered by City Clerk Paul Bergeron; Alderman Richard P. Flynn led in the Pledge to the Flag. The roll call was taken with 13 members of the Board of Aldermen present; Aldermen Vitale was not in attendance. Alderman Cookson arrived after the roll was taken. President McCarthy Alderman Vitale had called me to say that she was delayed with a family commitment and would be late if she was here. PUBLIC HEARING R-10-27 AUTHORIZING THE MAYOR AND CITY TREASURER TO ISSUE BONDS NOT TO EXCEED THE AMOUNT OF SIX MILLION NINE HUNDRED AND FIFTY THOUSAND DOLLARS ($6,950,000) FOR VARIOUS SCHOOL IMPROVEMENTS Alderman-at-Large David W. Deane, Chair of the Budget Review Committee, conducted the public hearing. As provided for in NRO 5-28, a presentation on R-10-27 was given by President Brian S. McCarthy and Mark Conrad, Superintendent of Schools: President McCarthy The bond that is in front of you represents the current estimates of what is necessary to do the HVAC and other improvements at Ledge and Fairgrounds schools plus three improvements or repairs to Elm Street School, which would be the replacement of a section of the roof, replacement of the main electrical switch gear, and replacement of the fire alarm panels all of which are in need of some repair. I would comment that one of the reasons why this bond came in with all of those things on it at this point is that there is anticipated to be a moratorium on the reimbursement by the State for principal on school construction projects starting in a couple of months. If we want to get reimbursed for these projects, we need to get that underway before that moratorium takes place. Mark Conrad, Superintendent of Schools I think Alderman McCarthy actually summed it up very well. I would not that this follows a request from the Board of Education to bond those projects, and the original proposal for the board was projects totaling about $16 million. After recognizing the economic circumstances we are in, the board went back and really looked at those projects that were most critical to the district, and clearly these are the three projects we feel are most critical. In the instance of the HVAC systems at Fairgrounds and Ledge, we have boilers and systems that are well past their useful life and have concerns about being able to get through over the next several Spec. Bd. of Aldermen – 06/07/10 Page 2 years during the winter heating season. In the case of Elm Street, we have had some difficulties with the electrical systems. You may recall there was an electrical fire there a number of years ago, which was quickly put out and the students were in no danger, but we have had a wakeup call that we need to replace those electrical systems. Along with roofing issues that we need to address simply because the roofs have gone past their useful life. Those are the most pressing issues we have in front of us from a capital maintenance standpoint at this point. I would like to have a chance to speak directly in favor of this legislation in a few minutes if I could. Thank you. Chairman Deane Thank you. That is the end of your presentation? Mark Conrad I believe so unless there is further information people would like. President McCarthy Mr. Chairman, I just want to add a couple of details on the HVAC projects. These are projects that we have been looking at for a long time, and it started out as a project with a much greater scope than the one that you see before you this evening. About a year and a half ago now I think we engaged the services of the Jordan Institute to do an energy audit on those buildings and to make some recommendations. They made a number of recommendations to us with regard to increasing the efficiency of the building envelope with regard to retaining heat, and as a result of that the committee changed the direction of the project from trying to do a geothermal heat system to renovating the natural gas systems that are in there and doing other changes to the building envelope so that the buildings were much more energy efficient on the assumption that the best units of energy were the ones we never consumed. There is a lot of insulation details about digging around the foundation and insulating the outside, replacing some places in the building insulation that were clearly leaking substantially. It includes that and it includes the work to replace the mechanical system itself and some associated changes to things like the ceilings where we need t open them up and close them for access as well as some casework issues, and also upgrading of the lighting to more energy efficient fixtures. The fixtures that are in Fairgounds, some of them are the original equipment from the ‘50s. They are very old, and we anticipate substantial savings from replacing those as well. Testimony in Favor Mark Conrad, 12 Ayer Street/Superintendent of Schools I want to start by expressing my appreciation to Alderman McCarthy and Alderman Cox for sponsoring this legislation to bond improvements for these three schools. There are a number of reasons specifically to merit your support of this legislation. First we know we need to move forward with the HVAC systems for Fairgrounds and Ledge Street. I remember four years ago, prior to my leaving the district, we were expressing concern about our ability to get through the winters with our heating systems in both of those schools, and here we are today and we are still working with the same heating systems. As Alderman McCarthy has testified, this process is really already well along through the Joint Special School Building Committee. Without this bond, the work at these two schools will exhaust the Spec. Bd. of Aldermen – 06/07/10 Page 3 remaining balance in the school district’s capital reserve account, which is right now at just under $4.6 million. This legislation partially bonds the cost of those projects. There is actually another just under $2.5 million that has already been set aside to cash fund a portion of the projects. Without this bonding in essence we would have no balance in our capital reserve funds or funds built into our operating budget for these kinds of capital projects. Years ago we would have $500,000 - $700,000 a year tied into our operating budget for these kinds of capital projects; roof replacements, parking lot replacements, window replacements, flooring replacements, etc. We had money in the operating budget for that. That was eliminated when the capital reserve was put into place. Without this bonding we would have no means of addressing any of our future capital needs at least built into our budget systemically whether through the reserves or the operating budget. This would leave us with no way of addressing current or future pressing needs such as the replacement of the Elm Street systems we have talked about, the replacement of the artificial turf at Stellos’ Stadium, upgrades to school security or the many smaller projects we have in our six-year capital improvement plan including replacements of roof, boilers, pavement, alarm panels, and some of the other needs that we have already identified. Bonding these three projects will allow us to move forward with our most critical projects and still preserve the $4.6 million in our capital reserve for these other needs moving forward over the next several years. This is really a multi-year solution to funding some of the critical needs we know are coming up in the next several years. Furthermore, as Alderman McCarthy also alluded to, this project, because these are packaged together in a sum of over $5 million, would qualify for the State building aide, which would be 30% of our actual principle costs on this project. The State is establishing a one-year moratorium on school building aid after June 30th. At that point, they will be evaluating the formula for the future. We don’t know what that formula will look like or to what extent it could benefit Nashua in the future. By approving this legislation prior to July 1st, it takes advantage of the small window of remaining opportunity to qualify for 30% reimbursement for school building aide. I would further note that if there are concerns about increasing the debt level for the district with this borrowing, each year the school district is paying down principle and interest obligations at about $14 million a year. Within a year or two we would still find ourselves with less obligations in terms of principle and interest payments due than where we are today. There are a number of side benefits to preserving our school capital reserve funds as well, secondary benefits. One of them is in technology. We have talked before in different venues about the fact our infrastructure and technology is crumbling. We have put very little money into replacing any of our 3,000+ computers in the last several years to the point where we have no money budgeted in the current year for equipment replacement. For the year coming up, we have built $300,000 into our operating budget to replace technology including network components, individual computers, and other types of technology peripherals. Now, we also know we need a new vision for how we need to reinvest in technology to assure that our investments are going to make a difference in student achievement in the classroom. We have had a committee looking at that question this year to say as we re-build our infrastructure over time, how can we do that in a way that will make the best use of those limited dollars. Within the next thirty days I think that committee will be ready to provide a preliminary report to the Board of Education. When we do move forward with that $300,000, we will have a good solution for what we are purchasing. Just for some information on where we are now; 2/3 of our computers are 7 years or older, we have hundreds of computers that are 11 and 12 years old – can no longer run basic educational software… Spec. Bd. of Aldermen – 06/07/10 Page 4 Chairman Deane Mr. Conrad I appreciate where you are going, but I don’t believe this is part of the resolution, the computer costs. Mark Conrad Let me get right to the point then if I could Alderman Deane. Chairman Deane Okay. Thank you. Mark Conrad If those funds were available through the capital reserve, it would give us the ability to look at increasing investment in technology by repurposing a portion of those capital reserve funds. I think looking at technology as a part of our infrastructure is a legitimate approach. If we were going to replace computers on a 5 or 6-year cycle we should be actually spending about $700,000 a year. We are not going to get there so one option for looking at how we invest in infrastructure in the school system, looking at capital projects and technology, would be to look at repurposing some of those funds in capital reserve towards technology, and that can only happen if this bond moves forward so that we don’t utilize the remaining balance on the Ledge Street and Fairgrounds’ HVAC systems. I would also tell you, and this is perhaps a thinner thread so if you could bear with me for a minute Alderman Deane, I am going to tie this back to our severance account, which as you know from long conversations we had in the Budget Committee, we are uncertain of what our severance liabilities are, and we remain uncertain of what they are. We have to make a difficult decision in a short period of time if we are going to restore the 15 high school teaching positions that we have talked about. We need to spend our $300,000 on technology to replace our crumbling infrastructure. But, if we know as a backup plan, we could use those $300,000 towards the severance account if we ran short should we repurpose some of those severance funds to the $480,000 we need for those 15 teaching positions, then it would make that a much easier decision or a less risky decision, and we would have those funds available as a backup plan to restore those positions if we could repurpose those funds under technology. Don’t know if everybody followed me with that, but I don’t want to run too far off field of the purpose of the legislation. It just speaks to the value of having those capital reserve funds remaining available. Thank you. Sean Smith, Plant Operations Director, Nashua School District Just a little bit more information, both Fairgrounds and Ledge Street Elementary Schools the boilers are as old as the schools are so they go back to the mid 1950s. The unit ventilators, all the utility lines going through the school are original to the school, and they are well past their service life. At Elm Street, the roofs we are looking to replace are, if you face the front of the school, the two side wings and also the commons area just outside the cafeteria. Those are all well past their warranty and we are experiencing leaks. I was up there last winter. The membrane is actually flapping around because it is not adhered to the substrate any longer. Switch gear, as we mentioned we have had a fire in that place. That is all as near as I can tell back to the early 1960s. It is again we have gotten our monies worth and then some. Spec. Bd. of Aldermen – 06/07/10 Page 5 Fire alarm system, we have been patching, putting in new heads and things like that, but we want to replace the main alarm panel and make it a voice-enunciating panel that can provide instructions to everybody without relying on somebody getting on a microphone. I will be around for the rest of the meeting if there are any specific questions about any of this stuff. Thank you. Robert Hallowell, 6 Chaucer Road/President, Nashua Board of Education I just wanted to make sure that people are aware that in this legislation one thing that would be counted on is that there is $2.5 million sitting at the Joint Special School Building Committee, which would be used for the Fairgrounds Elementary HVAC. You see that is only $1.5 million. In order to get to the amount that you would need, you would have to include that so that would deplete that amount. That is all. Thank you. Testimony in Opposition – None Testimony in Favor – None Testimony in Opposition – None Alderman Deane declared the public hearing closed at 7:19 p.m. ADJOURNMENT MOTION BY ALDERMAN COOKSON THAT THE JUNE 7, 2010 SPECIAL MEETING OF THE BOARD OF ALDERMEN BE ADJOURNED MOTION CARRIED The meeting was declared adjourned at 7:20 p.m. Attest: Paul R. Bergeron, City Clerk