School district looks to local experts for elementary project

Baxter Construction President, Tony Baxter, pitches the Fort Madison School Board on the construction management services his company provides. The district is looking at hiring a construction management firm for its next bond referendum. Photo by Chuck Vandenberg/PCC


FORT MADISON – Fort Madison school officials are turning to one of two local construction firms with storied legacies in southeast Iowa to help get a new elementary school built.

At a workshop on Monday evening, the Fort Madison School District Board of Directors heard pitches from Baxter Construction of Fort Madison and Carl A. Nelson & Company out of Burlington. The two firms are vying to be a construction management agency for the district’s third shot at a referendum to build a new elementary school.

Officials haven’t set a date for another referendum, but Board President Tim Wondra said the district will in all likelihood select one of the two firms based on the information that was presented to the board at the meeting. After selecting the firm as the construction management agency, then the district would consult with that agency on when best to put the referendum back out for a vote.

“After the last failed attempt, we sat down with a couple different groups and asked what did we do wrong last time and what did we do right,” Wondra said after the meeting. “They kept saying construction management-construction management. So our bond subcommittee met with three architect firms and two construction management firms last week to look at what a CMA does vs what an architect firm does and what are the pros and cons.”

A board bond subcommittee made up of Wondra and board members Dianne Hope and Carol Ross had been meeting in previous weeks to discuss the options for the next attempt. Wondra said the subcommittee met with a preferred provider from a list of construction management agencies provided by the Iowa Association of School Boards, to see how a CMA could help get the referendum passed and the school built.

He said DLR Group, the architect firm that handled both the last two referendum attempts, was not asked to be part of the process.

Wondra said after looking at what a CMA does and hearing from the firm off the IASB list, the committee realized they had two really good firms here in southeast Iowa that could do the same thing, which would help reduce the costs of the project.

“Going through that is why we recommended a construction management firm,” Wondra said. “And we had two great ones right here locally. We saw that was the same thing these local companies did and they would have that local ownership and buy in. The thought to starting with a clean slate is to try and bring the cost down and get that bond passed. Get it done.”

Carl A. Nelson presented first to the board and outlined how they would see the project through from pre-bond planning, preconstruction, construction, and closing out the processes. The construction management group manages the whole project from forming committees to helping facilitate information to the community through working with contractors, sub contractors, and vendors. Their fee comes in the way of a percentage of the project cost at different phases.

Dan Culp of Fort Madison, a co-owner of Nelson, outlined the scope of the firm’s services, with the help of several other specialists and owners at the company. The company would charge approximately a half percent of the construction costs in the pre-bonding phases. However Culp said the firm would waive that fee if the bond failed.

Carl A. Nelson would then be paid 3.25% of the total construction cost plus what project specialist Chris Smith called “general conditions” which would include any Carl A. Nelson staff labor charges on site and any equipment costs for trucks or trailers on the site. Smith said a project superintendent would be on site at all times and other staff may be on site at various times during a work week, and the project would take roughly a year to complete.

Figuring the pre-bonding and construction percentages at 3.75%, on the projected cost of the 2018 new elementary school, Nelson would stand to make about $1.13 million, not including the general condition charges. However, both Smith and Culp showed where construction management agencies have a track record of reducing construction costs, as well as duplication of service fees by subcontractors. Smith showed several sides of educational construction and renovation projects where costs came in several million dollars under budget.

Tony Baxter, President of Baxter Construction, along with Vice President Michael Baxter, Jeremy Butts, vice president of preconstruction and Rob Knight a project executive, outlined very similar services. Tony Baxter emphasized with the board that they had information about what did and didn’t work with the last election and had some ideas on not just passing the referendum, but passing it by a large margin.

Michael Baxter presented two different options for fees for their services which included a 1% waiveable pre-construction service fee and a 4% construction fee, both off the total project cost, and then general conditions, plus a 50% split in any savings in the contingency fund, which Baxter said typically carries about 5% to 6% of the total cost. Using the same 2018 figure of $30 million that would generate at $1.5 million management fee,  plus contingencies, and the bonus structure.

Baxter then offered an option where the district and Baxter’s negotiate a lump sum fee for the entire project and then split the savings in the contingency fund.

“It incentivizes the contractor not to increase the contract price. We lock in our general conditions and lock in our fee, add a set amount, and that’s what it will be throughout the project,” Michael Baxter said. “Our fee doesn’t increase. We take the risk from the owner and put it on our shoulders.”

Tony Baxter said the firm actually prefers to the do the lump sum arrangement.

Wondra said he wasn’t surprised by the costs associated with hiring the management firm.

“It’s kind of what we expected. It’s about the same as the architecture firm was, actually. It’s kind of one of those things that you have to pay for the service, but these could help bring the cost down.”

Wondra said the board isn’t favorable to another bond effort in April.

“Last time we learned April is probably not a good time to do this. I’ve heard through the grapevine that Central Lee may be looking at doing theirs in April and we want to try not to, like last time, compete against each other and people get misinformation.”

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