The Blaine County School District has spent about $20 million on energy savings and facility improvements under its contract with McKinstry Essention, but the costs remain about $48,000 under the original budget written four years ago.
The McKinstry work, mostly funded from a 10-year $59.8 million plant facilities levy approved by Blaine County voters in 2009, was discussed along with other levy expenditures at a special meeting of the district board of trustees on Thursday, April 4.
“Looking out, I’m feeling very comfortable with the plant facilities levy on where we’re at now rather than where everybody thought we were 16 months ago,” said district Business Manager Mike Chatterton.
Sixteen months ago was about when the district began receiving change orders from McKinstry claiming that the district owed it about $7 million more than had been paid. The district and McKinstry have been involved in a lawsuit since May 2012, with McKinstry claiming it performed work worth about $26 million and the district claiming it authorized work worth only $18.6 million.
The contract between the parties, approved in 2010, was for energy savings work and other improvements at eight Blaine County Schools and facilities.
In new court documents filed last week, the district accused McKinstry of submitting numerous fraudulent billings overcharging for McKinstry staff time and equipment purchases.
At Thursday’s board meeting, Chatterton and district Superintendent Lonnie Barber expressed confidence that the district would prevail in the lawsuit, scheduled for jury trial beginning Oct. 15.
“The worst case scenario in the McKinstry lawsuit is not going to happen,” Barber said. “But even if their claim was fully realized, I want you guys to know that we’re still in the black after this is all finished.”
McKinstry is trying to have the district’s fraud claim dismissed from the suit, and Barber explained to the board why that claim is important.
“The fraud actually allows for the punitive damages and that’s where that thing really benefits the School District,” Barber said. “If they come back and settle with us on this, a settlement would mean they forgive all of this and punitive damages would be out.”
Concerning payments for McKinstry work beyond the $18.6 million authorized, Chatterton said he expects refunds from the company for money that the district paid to local subcontractors after McKinstry stopped paying them in late 2011.
Of the $20 million paid for the McKinstry work, $5 million came from a U.S. Department of Energy grant and the balance from plant facilities levy funds.
Concerning expenditures on the eight schools and facilities under the contract, some, such as Hailey and Bellevue elementary schools, went over budget, while others, such as Carey School and the Community Campus, were under budget.
Chatterton explained that the budgets were based on estimates made by McKinstry on 2009 prior to passage of the plant facilities levy.
In other business at Thursday’s meeting, the school board approved a $2.25 million budget for energy savings work and other improvements at Hemingway Elementary School in Ketchum.
The work, planned for this summer, will include the drilling of geothermal heat source wells, replacement of the building’s heating, ventilation and cooling system, improvements to the school lighting system, door retrofits and installation of a roof drainage system to prevent winter ice buildup on the east side of the building.
Chatterton said new carpet is not included in the budget. He said tiles underneath the existing carpet have asbestos in them and all the floor work will be delayed until asbestos abatement work is done in 2014.
Chatterton told the board that the Hemingway work will be done more cost effectively than similar work at other district schools under the McKinstry contract.
“We’re having our own staff do a lot of the work and manage it ourselves,” he said. “That way we can save a significant amount of money.”
He estimated the savings at about $500,000, comparing the work to similar work already completed at Bellevue Elementary School.
Terry Smith: email@example.com