Balancing the Budget: Part III – The Monsters at Middle School
If you are associated with Whitesboro Middle School, you know that there are monsters disrupting the educational process within the school. No matter how much time, effort, and intervention is given to these monsters, they continue to wreak havoc throughout the school. These monsters truly have a negative impact on both students and teachers.
These monsters do not work alone… they have accomplices.
As you drive by the Middle School, you can see these monsters perched on top of the roof.
Who are these monsters? Who are their accomplices?
They are the HVAC (heating, ventilation, and air conditioning) units and their antiquated baffling systems. They have a job to do, but they just can’t get it done anymore.
When the middle school was built, it was common practice to install zoned HVAC units. With a zoned unit, one large HVAC unit would heat and cool an entire wing within the school. The HVAC unit would push large amounts of air through the duct work, and the baffling system would disperse the air so that the temperature in each room would be the same. If the thermostat was set at 73 degrees, then the temperature in each room would be 73 degrees.
The problem that the District is experiencing today is that these units no longer work the way that they were designed to work. For instance, if the thermostat is set at 73 degrees, one room might be 80 degrees, and the room next door might be 65 degrees. These variances in temperature are very problematic.
It’s bad enough that these HVAC units are not working properly, but the District is also spending large amounts of money on these failing units. For instance, the parts to repair the baffling systems and the HVAC units are almost non-existent, and when they are found, they are very expensive. And, to make the matter worse, these HVAC units are known energy hogs, and they are driving up the District’s utility costs.
Right now, you might be asking yourself… What does this have to do with balancing the budget? Well, actually a lot.
It is apparent that something has to be done to rectify the problem at the Middle School. While it might appear that it is a simple solution… anything that deals with spending additional money is not simple.
Schools have two pots of money. One pot is called M&O (maintenance and operation), and the other pot is called I&S (interest and sinking).
Normally, since this is a maintenance issue, the District would take the money out of the M&O budget and pay for the repairs. And currently, that’s exactly what the District is doing. The District is basically using duct tape, baling wire, and very expensive parts to keep these units going. As my granddad used to say, right now we are “throwing good money after bad.”
There is no doubt that these HVAC units need to be replaced, and the zoned systems need to be abandoned. However, to replace the HVAC system at the Middle School would cost about $1.5 million.
The district basically has two options to consider. Either borrow the money and make annual payments out of the M&O side of the budget, or pass a bond and use I&S dollars to pay for the update.
What is the difference?
The M&O side of the budget is tied to Target Revenue and is basically a fixed income. M&O money is used to pay for all normal expenses… academic and extracurricular programs, salaries, utilities, repairs, buses, fuel…
As you know, in an attempt to balance the M&O budget, the District is cutting expenditures. If the District decides to borrow money from a lending institution to replace the HVAC system at the middle school, the annual payments would be $300,000 for the next five years (not including interest). This additional $300,000 a year in payments would require an additional $300,000 in cuts from the M&O budget.
So far, the discussions surrounding expenditure cuts have primarily focused on reducing personnel expenditures. But, my fear with this M&O scenario would be that these cuts would most assuredly impact individual students and programs.
The other viable alternative is to use I&S dollars. I&S dollars can only be used for things like mechanical and building repairs, new construction, building renovation… However, I&S dollars cannot be used for normal expenditures like salaries, programs, utilities…
The problem with I&S dollars is that the District can only access these dollars through a bond election.
There is not a Win-Win or an easy fix for this problem. Without a doubt, the repair costs for the current system will continue to rise. As these costs rise, additional cuts will have to be made (dollar for dollar) in other areas to offset these additional expenditures.
I am a Ramsey fan as well. That makes a lot of sense now. Thanks!