Board of Directors – July 10, 2024: Building Update


DATE: July 10, 2024

TO: PPACG Board of Directors

FROM: Carol McBroom, Finance Director

THROUGH: Andrew Gunning, Executive Director

SUBJECT: Building Project Update

ACTION REQUESTED: Information Only


SUMMARY

Trane began to install the Building Automation System in mid-June. The estimated project cost is $1,150,000.& The scope of work includes automating the air handling system, updating valves and VAV boxes and replacing all piping. Overall, this project will increase efficiency, lower operating and maintenance costs and improve indoor air quality and occupant comfort.

Also in June, PPACG received notification from the Colorado Energy Office that we were not awarded the Public Building Electrification Grant. As a result, the board discussed how to best fund the building project not covered by the $485,000 AAA ARPA grant which has already been dedicated to the project.

The discussion led the board to unanimously approve pursuing a $665,000 line of credit from ANB Bank to address short-term cash flow concerns, as they recommended covering the building project expenses using reserve cash. It is important to note that our funding primarily comes from reimbursable grants, so we advance our regular operating expenses (such as wages, etc.), as well as fund grant expenses, in advance. Typically, we ‘float’ approximately $1,000,000 using our cash reserves before receiving reimbursement. Currently, we maintain $2,000,000 in cash reserves.

The board requested follow up on the following:

  1. Plan to replenish a 17% cash reserve.  
    • Estimated at 5 years
    • Using average net asset increase of $150,000/year
  2.  Recommendation and policy for line of credit usage threshold.
    • PPACG will draw from the LOC, when the treasury account dips below $1,000,000.
    • PPACG will payback the LOC with funds from the treasury account when it exceeds $1,000,000 for more than 5 business days.

ATTACHMENTS

  1. PPACG Cash Flow Forecast
  2. Estimated 17% Cash Reserve Replenishment Schedule
  3. Summary Month End Cash Flow Forecast for Line of Credit Usage Threshold
  4. Treasury Account Cash Balance for Line of Credit Usage Threshold