FMCSD facing 21% increase in facility upgrade estimates

BY CHUCK VANDENBERG
PCC EDITOR

FORT MADISON – For the second time in less than nine weeks, the firms leading Fort Madison schools’ facility upgrades have delivered bad news.

In August, representatives with Carl A. Nelson and DLR Group told the board that beginning the facility upgrades at Fort Madison Middle School and Fort Madison High School would have to be delayed by a year.

On Monday the construction and design officials again met with the Fort Madison School Board to tell them that costs on the project have increased almost $6 million or about 21%.

DLR is the company providing architectural services on the improvements and Nelson is the construction manager. Earlier this year the board approved preliminary plans to have all Prek-6th grade students at the Middle School, and all 7th-12th graders at the High School with enhanced learning facilities. The plan also calls for the retirement of the Richardson and Lincoln elementaries.

“We were updating our cost estimates, and the purpose is to make sure things are staying on track with your budget,” said Chris Smith, Vice President of Construction with Carl A. Nelson.

“Not only are we doing cost estimates for the construction, but the overall project costs – the things we call soft costs.”

Smith said the cost estimate of the project has gone up to $33.2 million from an original schematic cost of $28.7 million.

He said value engineering in the original project had brought the cost down by $1.7 million. Value engineering is finding cost savings in smaller priority items in the original design or less expensive materials.

But he said staff wanted to add a Special Education space to the PreK-6 plans. He said that added about $400,000 to the project.

After all that, the total cost was $27,457,000.

“Which obviously means that we’re $5.8 million over budget.”

Smith said the increased costs are not due to design being out of control, but rather the marketplace.

“In the last quarter we have seen the costs absolutely skyrocket in the marketplace,” Smith said. “Construction material costs and availability, as we talked about before, are through the roof. Workforce shortages and everything about it has just jacked the prices way out of sight. That’s the bad news.”

Smith said additional value engineering was reviewed and they found about 80 “nickel and dime” items that could be addressed that wouldn’t be noticed as part of the project, about $473,000 in savings at the PreK-6 building, and at the 7th-12th site they’ve found $740,000, for a total of $1.2 million in savings.

He said that’s not enough to get them back to budget so bidding a portion of the work as a separate project could bring in some lower overall costs.

“Our recommendation is identify a component that will be bid as an alternate bid, separately from the project in hopes the bid will come in low enough to be able to reduce the added costs of the project,” Smith said.

One of the components was eliminating the 1st grade wing or “pod” of the middle school upgrade. That project is estimated at $3.8 million currently. He said that would require finding space for six classrooms and some collaboration space inside the existing middle school building.

Smith said there is space now, but those were intended to be collaborative discovery spaces.

The other idea is switching over to the 7-12th space and bid the proposed locker room and gymnasium as an alternate bid, which represents $4.4 million of the costs.

He said if the bids come in favorably on that, they district could buy that project back, but if they don’t, the district would have to be willing to move ahead without the improvement.

Smith said using both components as alternative projects could jeopardize the number of people who bid on the work. He said their recommendation would be to bid one or the other as an alternative project, not both.

Smith said there could be some wiggle room in the 10% contingency fund that is included in current project estimations. He said that contingency provides insurance against even further cost increases, but said he recommended keeping that contingency in place.

Board member Josh Wykert asked if the board could delay making a decision down the road since the project has been delayed a year due to procurement of materials.

Smith said it would be a gamble to put if off, but they could do that.

HOPE

Board President Dianne Hope said the increase was an “overwhelming number and a disappointment.”

“The board asked great constructive questions and I don’t want to speculate where we’re going to end up. I have no clue where we’re going to end up,” Hope said.

“They’re getting into the details and in my industrial experience, we’re doing exactly what we’ve done in the past and given best estimates. But when you get into the nitty gritty and you start checking the market – it’s a surprise, but not a surprise if you watch the news and see what’s going on in the world.”

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