A malfunctioning air conditioning system at the Peabody Building has pushed many city and county staff working there to a new home until the weather cools—the old office building of Henderson Municipal Power & Light at 100 Water St.
Assistant City Manager Buzzy Newman said the air conditioning system at the Peabody Building, located at 1990 Barret Court, is as old as the building, which was built in the early 1980s, and the failure occurred because it is at the end of its life span.
Newman estimated that a new system will cost $3.5 million. The assistant city manager said paying for the system may require the Henderson City Commission to amend its 2026 fiscal year budget.
The 2026 budget’s projected revenues are $41.14 million while its expenses are projected to be $49.7 million, leaving $8.559 that the city will need to pay from its general fund reserves, according to the budget document the city approved in June.
The general fund reserves are currently just shy of $24 million, and after paying the $8.559 to balance the budget, the reserves will sit at $15.3 million. Financial experts recommend that cities keep in place a reserve fund that equals three months of a municipality’s operating expenses. In the city of Henderson’s case, that number is $10.28 million this year.
The city commission will need to determine if paying for the air conditioning system comes from the general fund reserves or a different method.
Newman said it’s going to cause some “belt-tightening,” and some currently budgeted projects may need to be delayed. But that’s still to be determined, he said.
“This is one of the primary reasons to have reserves,” he said.
The multi-million-dollar repair is going to have to be bid out, which Newman said will take six months. He estimated that the entire job won’t be complete for a year.
Meanwhile, an air conditioning support system has been put in place, but that doesn’t keep the building cool enough on really hot days, Newman said. He added that once the weather cools, staff who have chosen to move will be able to return to their offices. The heating system is not affected, he said.
Currently, the Henderson Police Department, Henderson County Office of Emergency Management, Henderson City-County Planning Commission and the Henderson Human Rights Commission have offices in the building. And, I-69 Ohio River Crossing is also leasing offices within the building.
Newman said city and county staff have been given the option to move to the old HMP&L office building and some have chosen to go while others haven’t.
He said the city commission will discuss the issue at a July 15 special called meeting. He said the commission will most likely decide on a plan by early August.
As part of the discussions, the city commission will need to start considering not only the future of the aging Peabody Building and the city’s Municipal Building, which is older than the Peabody and also has systems and facilities that are aging out, Newman said.
