BOE OKs Funding for Par Hills Boiler Fix

The 's plan to take on capital projects in a manner that will allow the school district to conserve energy and save money is moving forward. At its meeting last Thursday, the board voted unanimously to give the go-ahead to the first effort: the remediation of the water infiltration at the boiler room.

Public finance attorney Lisa Gorab of Woodbridge-based Wilentz, Goldman and Spitzer, P.A., told the board that the cost for the project would be financed through a five-year lease purchase at a cost not to exceed $1.3 million.

Gorab said a short-term loan financing option is attractive because interest rates presently are at a low rate, and because coming up with the entire amount through the budgeting process would be "difficult in any one year."

She said finance proposals are being researched.

"We are seeking proposals from people to finance it," Gorab explained of the leasing plan. "Right now, the rate could be about 2 percent or under, which is a very low interest rate to borrow at. So essentially you would only pay back the principal."

Under the lease plan, the lawyer said she was hoping to arrange a "slight payment of $20,000 in the 2013 budget."

"After the remaining four years, the lease would be paid off."

Superintendent of Schools LeRoy Seitz told the board that the plan was the work of architects and engineers in collaboration with Gorab.

"You are soliciting quotes from funding sources, banks and so forth?" he asked the attorney.

"We're still waiting for the [state] Department of Education to approve the project, which we expect," she answered. "Once that approval is received, we will make an application for financing."

The hope is that DOE will OK the plan by Aug. 1, Gorab added. Bids from lease companies are expected in mid-August, according to the plan, and the anticipated closing for the transaction would be in early September.

"This is a rather large project," said Board President Frank Calabria. "Did we look into the possibility of grants and other ways of funding this particular project?"

"There are no New Jersey Department of Education grants being offered at this point," Gorab said. "The governor has determined he is not giving grants or debt service aid for any projects."

She added no other grant funding is available to her knowledge, and that while the board could go with a bond referendum, "this size project doesn't warrant a special election. There's not much difference in the finance cost between a bond or a lease. ...

"The increase in the lease budget of 3.75 percent is very conservative, about $280,000, which covers both the principal and the interest."

"What happens if we come in under budget?" wondered board member Susy Golderer.

"The lease documents require that money be used for the next year's budget. You use it for the next lease payment for tax relief," the attorney explained. 

Superintendent Seitz then introduced architect Greg Somjen of Parette Somjen to speak about what the money will pay for: the water infiltration project itself, a scheme to divert ground water.

Parette Somjen has worked on projects for the PTHSD for more than a decade. The firm presently is supervising the at Par Hills and at .

Somjen explained that the ground water diversion process would use a natural, non-electric means to operate the new Par Hills boiler.

"On the simplest of levels, you have a boiler room that houses equipment that provides heating to the building sits at one of the lowest points at Parsippany Hills High School," he said. "Interestingly enough, you ultimately deal with two types of water—surface water, which the systems are handling relatively well. Part of the problem we're dealing with centers around ground water. We've had rain over the last several years at levels that have been unprecedented, and that charges the underground systems that we rely on as part of our day-to-day lives ."

Somjen said ground water pressure builds, making the ground so saturated that it can't hold any more water, which causes drainage issues.

"It's been happening for years and is getting worse," he said, noting that so far, it has not affected school operations. "But if unaddressed, you will have more issues to deal with than drainage."

The answer, he said, is to divert the ground water.

"We're looking to create a system that will, through gravity, take the water up through the floor of the boiler room, around the building and into the storm water system," he said. 

The architect explained that the plan is to excavate around the school to get piping around the building and away from the building.

"It's all gravity—no pump systems," he said. "The beauty is that the facilities team doesn't have to maintain pumps, and [the system] will work even during a power outage."

According to Somjen, using a sump pump and generator would require maintenance, the use of diesel fuel and additional expense. Also, he said a sump pump simply cannot keep up with the water that collects in the ground around the school.

With the diversion system, "we're able to accommodate a natural, gravity-fed system, which we recommend over mechanical," he said. "When you add mechanical components it becomes exponentially more complicated. ... [There's] no long term expense, monthly testing or replacement of pumps or valves, and this is significantly less expensive over the long haul.

"Based on all we have explored, this is a much more practical solution." 

He added that the project will require building a new loading dock for the school.

Board member Fran Orthwein asked how long the project would take to complete.

"About six weeks, depending on the contractor and ... accessibility of the site," Somjen replied. "We'll be digging up existing pipe and putting in new, larger pipe deeper into the ground. There will be boiler room work inside, drainage work outside."

And the cost ultimately would be covered by the energy costs saved, he said, noting that the work would be completed under the , which offers school systems a means to cover the costs of energy-efficient projects.

Potential savings are discovered via a local government energy audit program that conducts audits of three schools, one each at the elementary, middle and high school levels, said Somjen. The audits are used to identify the most pressing problems so that they may be addressed in order of magnitude.

The long-term plan, he said, is for every Par-Troy school to be audited, so his firm is seeking the most conservative approach to get the remaining 11 schools audited. As part of the effort, requests for proposals will go to energy service companies in the hope of obtaining bids to repair light fixtures, replace antiquated boilers and install new, energy-saving vending machines.

"There are lots of opportunities to save money," he added. "We look for financing so that it is net zero and won't have impact on budget. What we have seen in  our experience [is that] rebates and other programs are putting money to the bottom line."

Somjen said that over the next month or so, his firm will finalize paperwork and create requests for proposals.

"You will be reimbursed by the state for the audit expense," he said, adding that Parette Somjen is not billing the district for its work at this time as a courtesy.

That courtesy only goes so far.

"You will be getting a bill [eventually], but that will be covered with the savings.

"We see this as a partnership."