To the editor:
The article “SAD 70 reviews heating plan” by Joseph Cyr, dated Jan. 21, 2015, raised more questions than it answered, which leaves these SAD 70 taxpayers with concerns about how SAD 70 is spending precious taxpayer monies. Without providing the answers to the following questions in a follow-up article, we may be led to incorrect conclusions about how SAD 70 taxpayer monies are spent.
The article states that boosters were purchased after “hearing a presentation from Houlton-based Harbison Heating and Plumbing.” This statement implies that a sole-source contract was awarded, with the “school district borrowing $65,766 to purchase four burners.” Did the district develop a Statement of Work (SOW) and/or a Request for Proposal? Was this presentation given before or after the SOW and/or RFP? Were other potential suppliers available who were given the opportunity to present efficiency upgrades for traditional oil-fired furnaces? Was a sole-source contract awarded to Harbison Heating and Plumbing? Does the contracting process require a minimum number of bids? Who approved the purchase? The district leadership? The school board?
The article also states “the school district borrowed $65,766 to purchase four burners to be installed on their existing furnaces.” This implies the district had not budgeted for these burners. If the burners were not budgeted, why were they purchased? Does the district have the ‘discretionary funds’ capable of funding this type expenditure? Was this an extra-budgetary purchase/expense?
This expenditure I would argue, according to information in the article, was not an immediate need nor emergency, but rather discretionary, aimed to reduce energy costs, and not required because the furnaces apparently are still fully functional (as implied in the article). Reducing the carbon footprint and increasing fuel efficiency are noble ideals, if done in a cost-effective manner to the taxpayer.
The article also states “the seals on several boosters were failing … the district had to purchase additional boosters to have on hand so that if one failed, it could simply be swapped out.” What was the cost of the additional boosters? What is expected to be the cost for repair of the defective units? What is the overall cost of the original four boosters, the additional boosters, and the expected repair?
If the reader assumes the cost for the four original boosters was the amount borrowed (without including interest on the borrowed monies), then this equals $65,766 with the resultant “net savings of $12,800” from the use of “4,000 fewer gallons” of oil. The amortization of the cost divided by the annual savings (65,766/12,800) equals 5.14. This is the number of years the boosters must function without additional costs for the district and taxpayer to break even, provided fuel costs do not decrease (as has been the case of late) or increase, and this fails to include the associated costs of repairs and additional boosters.
Has this been a responsible use of taxpayer dollars? If the boosters are not warranteed for the 5.14 years, then what is the historical life expectancy for said boosters (this cost should also be calculated in the overall cost)? Given the above info, does this add up for the taxpayer? Were these costs and amortization considered as part of the decision-making process to determine whether these expenses were reasonable and justified?
The above is combined with the article’s statement that “complicating the problem, the district’s heating service contractor, Honeywell, is unable to provide service on the burner boosters because they are not familiar with the product.” This leads to further increases in costs to the taxpayer because costs associated with the boosters, whether the purchase, repair or replacement are not covered within the Honeywell service contract. More questions arise: Why would the district purchase boosters not covered within the existing contract?
For those unfamiliar with contracts, any change to the contract must be negotiated, which in this case, should the additional responsibility of servicing the boosters be included in the Honeywell contract, then the cost of said contract should increase. Was this also considered in the decision-making process? Who is the Honeywell service contractor? Was the contractor included in the “presentation”? Was the contractor involved in the decision-making process on the ability to repair said boosters and expected life-cycle service costs (it appears not to be the case since Honeywell is “not familiar with the product”)?
These questions may only be the tip of the iceberg related to this article and the issue surrounding the procurement of “burner boosters,” but are necessary questions, which demand answers as to the legitimate use of limited taxpayer resources. We would ask the Pioneer Times to expand upon its original article and provide the good people of SAD 70 with the answers to these and other questions that may not have been asked or arise as part of further inquiry.
Keith and Tina Harrington
Linneus
