Oroville School board asked to give up $180K energy incentive

Company said it ‘overbuilt’ OHS HAVC

OROVILLE – Ameresco, the company contracted to built Oroville High Schools new geothermal heating and cooling system, said the project cost more than anticipated and asked the school board to consider signing over $180,000 in energy incentives the district may be receiving.

Representatives of the company said they had built a more robust system and that the price of equipment, well drilling and trenching were partly to blame for a nearly $180,000 higher than expected cost. They said Okanogan County PUD had promised incentives of $180,000 because the system was even better than designed. When asked they said it was just “coincidence” that the amount of the cost overuns was equal to the incentives.

“The project will save the district $32,000 a year in energy savings and pays for itself in just under a ten year period,” said Ameresco’s Randy McPhearson, who added that the project, originally slated for completion over the summer, would be complete as soon as the “shed” was complete.

The $180,000 in PUD incentives were not part of the equation when the projects costs were originally considered and were available now only because what the district was getting was much more “robust.” a theme the Ameresco representatives repeated several times.

“On the other hand bids came in at $180,000 above bid. However, Ameresco guaranteed the project cost,” said McPhearson. “We are asking for the acceptance of the PUD rebates be given to us to make us whole.”

The company said that they based their costs on the cost of the system at the Oroville Elementary School which was installed six years ago. They said that they added some money in to negate increases due to the passage of those six years, though.

The board was shown some figures the company said represented why the project ended up being so much more than anticipated. However, several members of the school board, led by Chairman Rocky DeVon said they were not detailed enough to explain why there would be $180,000 more in costs.

“We engineered a more robust system. The wells were deeper than anticipated and the cost for trench work came in as double,” said McPhearson, who also pointed to it being harder to get bidders “up here.”

“Our ultimate goal is to give the best system we can, we used the elementary as a basis,” said Shelly Pittman with Ameresco.

“You would still get incentive dollars and there would be no increase in cost… basically it was the same price,” said Ameresco’s Paul Ristow.

“If the tides were turned and came in so far under budget would we be getting the savings,” asked Superintendent Steve Quick.

“Yes, we have a guaranteed price. We would have given back the savings,” said McPhearson.

DeVon said looking at the few figures supplied by the company he just wasn’t seeing $180,000 in overages.

“I’m not seeing how you missed by so far. I’m going to need a lot more information,” said the school director.

The board was asked whether they recall the fact for several years the PUD was only collecting about half the actual cost of the power usage at the high school because of a faulty meter installed during the building’s remodeling. The PUD informed the school district that this money would have to be recovered and it was unlawful for them to give ratepayers money even to a school district which was funded by taxpayers who were some of those very same ratepayers. The district has for several years paid extra each month because of that glitch. The person asked, wouldn’t that apply to this situation, how could the district give $180,000 of money, money that would otherwise have to come from the district taxpayers to fund projects, to a company that guarantees their price?

Kirstan Willson, with the Department of General Administration represents the school district on the project. She said in her professional capacity she would not recommend paying more than what the “guaranteed price” was. However, personally, she said, she could see the district allowing for some extra recompense.

Director Todd Hill suggested the board not even consider the issue until the work on the system was completed and the board agreed. Ameresco promised to give more detailed information on the cost overruns so they can better make there decision at that time.

McPhearson added that whatever decision the board makes the company stands behind its guarantee.

Company said it overbuilt OHS HAVC