02/16/2011

Town Council approves $200,000 toward heating-system replacement at the High School

The High School is getting a new boiler.

The 42-year-old heating system will be replaced with a more energy-efficient model expected to save $40,000 in energy costs annually.

The current two-boiler system fuels the High School, Richards community pool, and "everything else down in that corner of the school property", said Town Manager Michael McGovern. They were installed when the school was constructed in 1969.

Cost for the replacement is $350,000, to come partially from town funds, and partially from School Department resources.

The School Board on Feb. 8 unanimously agreed to make the purchase, but the vote did not specify how the new boilers would be financed. The boilers have been on the board's list of needed capital improvements for the last several years.

The Town Council, at their Feb. 14 meeting, voted to use $200,000 from undesignated funds, with the remaining $150,000 to come from a five-year loan or lease/purchase agreement to be repaid by the School Department. The projected energy savings are expected to cover that cost.

"I think this is a good plan because it shows that the School Department can get these new boilers without taking away from funds that might otherwise be used to directly educate the kids, plus it also has no negative impact on our tax bills," McGovern said at the council's Feb. 14 meeting.

Available funds, energy savings eliminate need to borrow

The town has more in its undesignated fund than anticipated because property values are higher than forecast when the 2011 budget was approved, McGovern said. The undesignated fund balance holds this "overlay" amount, which stood at $410,000 at the end of November. This was $185,000 higher than anticipated, McGovern said in a memo to the council.

The council's action not only enables the boiler replacement, but achieves a second objective: To avoid debt.

"I think we ought to go a little slow in debt right now," McGovern said. "The interest rates are low but you look at the president's (Barack Obama's) budget today, and it's a bit scary what the long term projections are for deficits," he said.

Debt owed by Cape Elizabeth as of June 30, 2010 was $22,067,420. This year the Town is reducing $2,068,422 in principal.

One-Town Concept

Councilors agreed that the town sets a good example by avoiding debt at this time, but also by implementing the one-town concept practiced in Cape Elizabeth.

"It is unusual for a community to make these funds available to a school department, but for a long time we have had the one-town concept and believe in working with each other to meet needs," McGovern said.

Councilor Anne Swift-Kayatta said she thought this an excellent example of the one-town concept. "It makes our town much more efficient than many other communities where the municipal side of the budget and the school side of the budget are handled as separate silos," she said.

"And I commend both the superintendent and the School Board, and the town manager, for figuring this out - because in the end it's in the best interest of the people for us to operate this way," she said.

School Board approval

A proposal to fund $150,000 of the boiler replacement cost with a five-year municipal lease was presented to the School Board's finance committee Feb. 15. The full board is expected to vote on the lease at a future business meeting.