Regents Approve $58.2 Million Budget to Fund Renovations to Academic, Magill Halls; Deferred Maintenance; Power Plant Upgrades

CAPE GIRARDEAU, Mo.,

Oct. 22, 2010 – The Southeast Missouri State University Board of Regents today approved the scope of and a $58.2 million project budget to fund renovations to Academic Hall, renovations to and an addition to Magill Hall, completion of major deferred maintenance and repair projects across the campus needed in the next three to five years and conversion of the campus power plant to natural gas fuel.

The Regents also directed the University administration to pursue funding through the Missouri Health and Education Facilities Authority (MOHEFA) to finance $58.2 million of this capital project budget through a bond issue. Southeast has made an initial application to the MOHEFA Board.

Kathy Mangels, vice president for finance and administration, said the application does not authorize the sale of bonds or commit the University or MOHEFA to a determined amount to be issued. The MOHEFA Board and the University Board of Regents must both authorize a final pricing and sale of bonds, she said.

Mangels says she anticipates the sale of bonds will occur before Dec. 31 to take advantage of the federal Build America Bonds (BAB) program. Through this program, the federal government provides 35 percent of the annual interest expense on certain taxable, governmental bond issuances. Based on the underwriter’s recommendation of 30-year financing of traditional tax-exempt bonds and BABs, annual debt service on a $58.2 million issue is estimated at $3.4 million, she said.

Renovations are estimated at $22.8 million for Academic Hall, $17.9 million for renovations and an addition to Magill Hall and the University’s science laboratories, $9.6 million for deferred maintenance projects, and $6.9 million for power plant upgrades, Mangels said. In addition, renovations to Memorial Hall, to be used as a transitional space during work in Academic Hall, are estimated at $945,000, she said.

Mangels says the broad scope of these projects will affect many buildings on campus, with the work necessitating transitional spaces elsewhere on campus and complete moves of staff and equipment. She says programming and design will begin immediately. A phase one addition to Magill Hall could begin in fall 2011 and renovations to Academic Hall could commence in January 2012, she said. The first phase of upgrades at the University’s power plant could be complete by fall 2011, Mangels added.

Action by the Regents today follows a directive by the Board last March to review and prioritize major capital maintenance and repair needs of the campus and investigate possible funding sources. The Board subsequently, in June, approved resolutions authorizing the intent to issue bonds to finance certain projects and to further analyze the scope and estimated cost of these projects. The Board, at the time, identified the University’s major capital priorities as renovation of the science facilities, upgrades to Academic Hall’s infrastructure and major deferred maintenance and repair projects.

Over the summer, architectural and engineering consultants worked with Facilities Management staff to analyze building and infrastructure conditions and compiled recommendations and cost estimates. The consultants presented their final recommendations Oct. 14 to an ad hoc committee of the Board formed to consider capital needs and financing options, and make recommendations to Southeast President Kenneth W. Dobbins.   Academic Hall Renovations

The renovations to Academic Hall will include the refurbishment and restoration of the historic corridors, stairwells and building exterior. Renovations primarily will replace the building’s failing infrastructure which last received major upgrades in 1975. The project will include full replacement of the mechanical, electrical, plumbing and fire protection systems. In addition, the slate roof will be replaced, the dome reclad to stop water leaks affecting the interior of the building, and the elevator will be relocated and replaced to meet ADA requirements, Mangels said.

A major component of the Academic Hall renovation project will be the implementation of a One Stop student services area requiring complete renovation of the building’s first floor, she said.

Renovations to the building also will include extending stairwell and elevator access, along with infrastructure, to the dome area.

Mangels said Academic Hall will need to be completely evacuated during the renovation work, and some offices in the building may be relocated to other buildings to provide increased physical space for student service functions.

Magill Hall/Science Labs

The goal of the proposed work in Magill Hall is to renovate it in its entirety, Mangels said.

“Many of the existing systems have outlived their useful life and now require replacement, including the mechanical and electrical systems within the building,” she said.

Mangels noted that while Magill has undergone some modifications during the last 50 years, the most significant have occurred during the last four years when three chemistry labs, two physics labs and two biology labs have been renovated thanks to partial funding from a federal grant.

Exterior renovations will include window replacement, mansonry restoration, roof replacement and insulation of exterior walls. These improvements, along with installation of an energy efficient mechanical system, will have a significant impact on the thermal performance of the building and result in a significant reduction in the facility’s operational costs, Mangels said.

Interior renovations will include the complete remediation of all hazardous materials within the facility, including previous Americium 241 contamination and asbestos abatement. In addition, current floor plans will be reorganized and spaces will be grouped by department.

“This will provide opportunities for shared equipment, shared storage and preparation rooms and a collaborative environment for both faculty and students,” she said.

The project also includes a three-story addition to the north of Magill Hall. The addition will house the mechanical space for new air handling equipment, in addition to a computer lab and two lecture classrooms. Construction of the addition will be done during the first phase of the project, thus allowing swing space during the project’s remaining two phases. Deferred Maintenance

Like Magill Hall, many of the University’s buildings date to the late 1950s and 1960s.

“Consequently, most of the systems serving these buildings have reached or exceeded their normal expected service life,” Mangels said.

Many of the mechanical systems have been replaced or upgraded as necessary to keep them operational, but unit casings are beginning to fail, requiring full replacement. Piping systems in many buildings are corroding and showing early signs of failure, she said. Electrical service also is outdated and inadequate for current needs in many buildings, she added.

The Board today approved deferred maintenance projects categorized as Priority 1 projects totaling $6.1 million to be completed in the next three years; a budget allocation of $945,000 for necessary upgrades and renovations to Memorial Hall to serve as transition space during the renovation of Academic Hall and a potential permanent home for the Information Technology department; and Priority 2 projects totaling $3.5 million to be completed in the next three to five years.

Mangels says deferred maintenance projects were reviewed and categorized into HVAC, electrical, plumbing and exterior envelope issues. Projects were prioritized into: items well beyond their useful life which present a significant safety hazard and should be addressed in the next one to three years, items requiring considerable maintenance, but may continue to be maintained without concern for imminent failure in the next three to five years, and items that are aging but failure is not imminent and can be addressed in the next five to 10 years.

During the review process, Memorial Hall was identified as a swing space during Academic Hall renovation and, thus, was categorized as a Priority 1 project needing to be completed before Academic Hall work begin, she said.

Power Plant Upgrade

The Regents today approved replacing the power plant’s existing coal fired boiler with a natural gas fired boiler plant with fuel oil as the back-up fuel source at an estimated cost of $6 million. The Board also approved replacing the absorption chiller in the North Chiller Plant with an electric centrifugal chiller at an estimated cost of $847,000.

The estimated operating cost of the current central plant for fiscal 2011, based on known increased coal purchase cost, is $2.36 million, Mangels said. The projected operating cost with a complete conversion to natural gas firing boilers is $2.485 million, as compared to $2.491 million if  the current coal fire boiler was retained and back-up natural gas boilers were installed.

She says the replacement of the absorption chiller at the North Chiller Plant with an electric centrifugal chiller will reduce annual operating costs by about $134,000 per year, making the operation of a natural gas fired plant comparable to current coal operating costs.

Mangels says the central boiler plant serving the campus originally was constructed in 1949. Today, only one operable coal boiler, installed in 1963, remains, generating high pressure steam solely for campus use. The current plant has no back-up boiler, she said.

“A failure of the single, aging coal boiler during cold weather would have significant consequences for the University,” Mangels said.

The current plant operation provides no incentive to save heating energy in the campus buildings or the boiler plant, she said. The boiler plant cannot reduce load to the operating conditions required for six to eight months of the year, so additional steam is produced that is either wasted through false load generators or used in a steam absorption chiller providing campus cooling through an inefficient process. The boiler plant also still produces high pressure, high temperature steam that was required for the turbine/generation system, even though that system is no longer operable, Mangels said. Less than half the steam produced goes towards the plant’s primary mission of heating the campus, she said.