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Saturday
March 20, 2010 Since 1922 |
GC bond price tag growing
By Ken Fountain
Baytown Sun Published March 26, 2006 When Goose Creek school district voters approved a $220.5 million bond referendum last April, it was the largest such bond referendum in the district’s history.
But, perhaps because of factors outside the control of either district officials or others who pushed the proposal, there are already indications that many of the bond projects may not be completed within budget.
Voters actually passed, by wide margins, two propositions – one for $120 million for the district’s growth needs, and another for $100.5 million for improvements to existing facilities.
Among the big ticket items on the growth side are the construction of the district’s third high school at a total cost of $71.5 million; the replacement of Highlands Junior School, at $25.7 million; the replacement of Bowie Elementary School, at $14.6 million; and the construction of the district’s 14th elementary school, at $14.7 million.
The district wasted no time getting to work. Based on the recommendation of the committee that developed the 1999 bond proposal, a Citizens Bond Advisory Committee — consisting of representatives from a wide range of stakeholder groups – was formed to oversee implementation of the bond projects.
Last summer, a number of smaller renovation projects were completed, including replacing or repairing roofs and floors at several campuses and the district’s Maintenance-Operations-Transportation-Security (MOTS) facility.
In recent months, the CBAC and the district’s board of trustees have seen the first proposals from architects and contractors on some of the bigger projects, including the high school, the replacement of Highlands Junior and renovations on Stallworth Stadium.
In January, board members learned from Matt Brown, a representative of the SHW Group architectural firm, that the $992,000 stadium renovation would probably go $250,000 over budget. Work was scheduled to begin this month for completion in July.
On March 6, trustees approved the same firm’s final designs for the third high school. Brown told them that the project appears to be right at its $53 million construction budget (the rest of the $71.2 million total costs go to such things as professional service fees, testing and inspection costs and furnishings, fixtures and equipment).
But also this month, members of the bond advisory group learned that competitive sealed proposals from the three contractors that bid on the Highlands Junior project came in at between $25.4 million and $26.7 million –roughly 15 percent over the $21.5 million construction budget called for in the bond referendum. They also heard from district officials that estimates for the Harlem Elementary and the new elementary schools could have a combined overage of $1.6 million.
During the committee’s March 9 meeting, member Don Coffey strenuously questioned why only three contractors offered proposals on the Highlands Junior project and whether such overages so early in the process could be a harbinger of problems that might threaten the entire bond project down the line.
Coffey, who represents the Baytown/West Chambers County Economic Development Foundation on the committee, said in a later interview his primary concern is that if the large projects go well over budget, many of the other items voters were promised might not be completed with the available bond funds.
“Because of things that are not in control of the district, such as Hurricane Katrina and other things, it appears that the budget that was set up may not be sufficient for some of the projects, if not most of the projects,” Coffey said.
The “Kat-Rita” effect
Indeed, district officials and others have cited shortages in construction labor and material created by the reconstruction work in the wake of last fall’s Gulf Coast hurricanes as a primary factor in the overages.
A recent construction market forecast by the Houston chapter of the Associated General Contractors of America identified the “Kat-Rita effect” as the concerning issue on labor and material availability along the Texas Gulf Coast.
“While things are tight in terms of availability for certain materials at this time, it is destined to get worse as mid-2006 actual reconstruction of the Gulf Coast begins,” states the report, cited by an architect during the March 9 CBAC meeting.
“Existing worker shortages in the Houston Gulf Coast area may be exacerbated by the demand for reconstruction on the Louisiana-Mississippi Gulf Coast. Incentives (sign on bonuses, higher wages) may draw more workers from this area. In addition, labor costs are rising, and unemployment is down,” the report states.
The same association projected construction labor costs in the Houston area to increase by 6.9 percent, while the actual increase was 7.04 percent, a difference of 0.14 percent. Likewise, the association projected an 11.9 percent rise in material costs, while the actual increase was 16.2 percent, a 4.3 percent difference.
For 2006, the association is projecting a 5.8 increase in labor costs and a 9.55 increase in material costs.
Other factors
But the “Kat-Rita” effect may not account for all of the overages. During the CBAC meeting, Coffey said he had heard from at least one contractor considering the Highlands Junior project that the architectural drawings by Houston firm Corgan+PBA had been insufficient to make a proposal. Coffey theorized that might be the reason the district received only three proposals on the project.
In an interview last week, David Fluker, director of facilities planning and construction, and Robbie McGowen, assistant superintendent for support services said the district is still negotiating with the contractors who submitted proposals. The district publicly opened the proposals March 1, and by law has 45 days from that date to evaluate and rank the proposals.
McGowen and Fluker said the architectural design for the project did have an unusually high number of addendums, which Fluker said was a result of the “speeded-up process” by which they were drafted. While such a design would normally take about eight months to complete, the Highlands design was done in five.
“I was pushing them pretty hard,” Fluker said.
The project is also more complex than normal since it involves building the new Highlands Junior School on the same site as the original building while keeping the old school open, he said.
McGowen and Fluker said the district’s own stringent construction standards might have dampened contractors’ interest in the project in a construction market now teeming with work.
Fluker said the project was also sent out for proposals in the early part of the year, which is said is the “worst time” to do so, at least from the point of view of the client.
After ranking the proposals based on a variety of criteria, the board (based on recommendations from the district administration and the CBAC) can accept the top-ranked proposal, reject that one and move on to the next, or reject all of them and send the project out again for proposals, McGowen said.
During that process, the designs can be “cleaned up” to make them more useful to contractors, perhaps encouraging more of them to submit proposals, he said.
Both McGowen and Fluker were adamant that while the bond referendum laid out a fairly specific timetable for the completion of all the projects, the district would not “sacrifice” the budget – that is, accept large overages — in order to meet the schedule.
They also said that while district personnel and the hired architects are continually looking for ways to save money on projects, the district would probably not soon be lowering its construction standards, which are approved by the board.
They pointed to savings the district achieved in the renovations work done last summer.
McGowen added that the district is now working on $119 million in construction projects that are either in the design phases or construction. Of 17 sites, three have had cost estimates come back – the Highlands Junior project, the Stallworth stadium renovation and the project to lay artificial turf in the stadium. Two came in over budget, and one – the turf project – came in under project, he said.
“Our goal is to complete every project. Some will be finished on schedule, and some will be behind schedule. Some will be under budget, and some will be over budget,” McGowen said.
He pointed out that every project has a “contingency” for unexpected developments that might cause overages, district personnel and architects and contractors are not allowed by the school board to factor that in during negotiations.
Continuing oversight
But Coffey said he is concerned that the board has not been kept fully apprised of the scope of the overages thus far.
Board member Steve Fischer said he shares Coffey’s concern, after hearing from him and others about the overages.
“I’m uncomfortable with hearing from members of the community, and members of the CBAC, of overruns in the projects. My concern is that we’ve not been hearing similar concerns from the administration,” Fischer said.
“I feel like maybe the administration needs to provide the board with more information, or at least as much information that the CBAC meeting is getting and the information that administration is discussing with the chairman of the CBAC,” he said.
The CBAC chairman is Gilbert Santana, who also facilitated the committee that drew up the bond referendum and was a member of the political action committee that successfully pushed for its approval by voters.
Santana said that while he shares some of Coffey’s concern about the overages so far, he is not yet convinced they are emblematic of a larger problem.
“I’m concerned, but my concern is not validated until we arrive at some final decisions. Once we’ve exhausted all the efforts of negotiations, reviewing the building standards – are there are any areas we can reduce requirements but not impact the reliability of the facility – then I really don’t know if we’re sitting here standing at five problems or just one isolated problem,” he said.
Santana said that as estimates for the larger projects come in and there continue to be large overages, he would begin to worry that many of the other projects might not be able to be completed with available bond funds. But he is not yet at that point.
“We have enough data to say, we’ve got a challenge ahead of us. We’ve got to keep working these bids, we need to keep working with the architects and the construction companies and see what we can do to provide quality facilities for not only the budget we have, but for even less than the budget we have, if at all possible,” he said.
Baytown Sun Published March 26, 2006 When Goose Creek school district voters approved a $220.5 million bond referendum last April, it was the largest such bond referendum in the district’s history.
But, perhaps because of factors outside the control of either district officials or others who pushed the proposal, there are already indications that many of the bond projects may not be completed within budget.
Voters actually passed, by wide margins, two propositions – one for $120 million for the district’s growth needs, and another for $100.5 million for improvements to existing facilities.
Among the big ticket items on the growth side are the construction of the district’s third high school at a total cost of $71.5 million; the replacement of Highlands Junior School, at $25.7 million; the replacement of Bowie Elementary School, at $14.6 million; and the construction of the district’s 14th elementary school, at $14.7 million.
The district wasted no time getting to work. Based on the recommendation of the committee that developed the 1999 bond proposal, a Citizens Bond Advisory Committee — consisting of representatives from a wide range of stakeholder groups – was formed to oversee implementation of the bond projects.
Last summer, a number of smaller renovation projects were completed, including replacing or repairing roofs and floors at several campuses and the district’s Maintenance-Operations-Transportation-Security (MOTS) facility.
In recent months, the CBAC and the district’s board of trustees have seen the first proposals from architects and contractors on some of the bigger projects, including the high school, the replacement of Highlands Junior and renovations on Stallworth Stadium.
In January, board members learned from Matt Brown, a representative of the SHW Group architectural firm, that the $992,000 stadium renovation would probably go $250,000 over budget. Work was scheduled to begin this month for completion in July.
On March 6, trustees approved the same firm’s final designs for the third high school. Brown told them that the project appears to be right at its $53 million construction budget (the rest of the $71.2 million total costs go to such things as professional service fees, testing and inspection costs and furnishings, fixtures and equipment).
But also this month, members of the bond advisory group learned that competitive sealed proposals from the three contractors that bid on the Highlands Junior project came in at between $25.4 million and $26.7 million –roughly 15 percent over the $21.5 million construction budget called for in the bond referendum. They also heard from district officials that estimates for the Harlem Elementary and the new elementary schools could have a combined overage of $1.6 million.
During the committee’s March 9 meeting, member Don Coffey strenuously questioned why only three contractors offered proposals on the Highlands Junior project and whether such overages so early in the process could be a harbinger of problems that might threaten the entire bond project down the line.
Coffey, who represents the Baytown/West Chambers County Economic Development Foundation on the committee, said in a later interview his primary concern is that if the large projects go well over budget, many of the other items voters were promised might not be completed with the available bond funds.
“Because of things that are not in control of the district, such as Hurricane Katrina and other things, it appears that the budget that was set up may not be sufficient for some of the projects, if not most of the projects,” Coffey said.
The “Kat-Rita” effect
Indeed, district officials and others have cited shortages in construction labor and material created by the reconstruction work in the wake of last fall’s Gulf Coast hurricanes as a primary factor in the overages.
A recent construction market forecast by the Houston chapter of the Associated General Contractors of America identified the “Kat-Rita effect” as the concerning issue on labor and material availability along the Texas Gulf Coast.
“While things are tight in terms of availability for certain materials at this time, it is destined to get worse as mid-2006 actual reconstruction of the Gulf Coast begins,” states the report, cited by an architect during the March 9 CBAC meeting.
“Existing worker shortages in the Houston Gulf Coast area may be exacerbated by the demand for reconstruction on the Louisiana-Mississippi Gulf Coast. Incentives (sign on bonuses, higher wages) may draw more workers from this area. In addition, labor costs are rising, and unemployment is down,” the report states.
The same association projected construction labor costs in the Houston area to increase by 6.9 percent, while the actual increase was 7.04 percent, a difference of 0.14 percent. Likewise, the association projected an 11.9 percent rise in material costs, while the actual increase was 16.2 percent, a 4.3 percent difference.
For 2006, the association is projecting a 5.8 increase in labor costs and a 9.55 increase in material costs.
Other factors
But the “Kat-Rita” effect may not account for all of the overages. During the CBAC meeting, Coffey said he had heard from at least one contractor considering the Highlands Junior project that the architectural drawings by Houston firm Corgan+PBA had been insufficient to make a proposal. Coffey theorized that might be the reason the district received only three proposals on the project.
In an interview last week, David Fluker, director of facilities planning and construction, and Robbie McGowen, assistant superintendent for support services said the district is still negotiating with the contractors who submitted proposals. The district publicly opened the proposals March 1, and by law has 45 days from that date to evaluate and rank the proposals.
McGowen and Fluker said the architectural design for the project did have an unusually high number of addendums, which Fluker said was a result of the “speeded-up process” by which they were drafted. While such a design would normally take about eight months to complete, the Highlands design was done in five.
“I was pushing them pretty hard,” Fluker said.
The project is also more complex than normal since it involves building the new Highlands Junior School on the same site as the original building while keeping the old school open, he said.
McGowen and Fluker said the district’s own stringent construction standards might have dampened contractors’ interest in the project in a construction market now teeming with work.
Fluker said the project was also sent out for proposals in the early part of the year, which is said is the “worst time” to do so, at least from the point of view of the client.
After ranking the proposals based on a variety of criteria, the board (based on recommendations from the district administration and the CBAC) can accept the top-ranked proposal, reject that one and move on to the next, or reject all of them and send the project out again for proposals, McGowen said.
During that process, the designs can be “cleaned up” to make them more useful to contractors, perhaps encouraging more of them to submit proposals, he said.
Both McGowen and Fluker were adamant that while the bond referendum laid out a fairly specific timetable for the completion of all the projects, the district would not “sacrifice” the budget – that is, accept large overages — in order to meet the schedule.
They also said that while district personnel and the hired architects are continually looking for ways to save money on projects, the district would probably not soon be lowering its construction standards, which are approved by the board.
They pointed to savings the district achieved in the renovations work done last summer.
McGowen added that the district is now working on $119 million in construction projects that are either in the design phases or construction. Of 17 sites, three have had cost estimates come back – the Highlands Junior project, the Stallworth stadium renovation and the project to lay artificial turf in the stadium. Two came in over budget, and one – the turf project – came in under project, he said.
“Our goal is to complete every project. Some will be finished on schedule, and some will be behind schedule. Some will be under budget, and some will be over budget,” McGowen said.
He pointed out that every project has a “contingency” for unexpected developments that might cause overages, district personnel and architects and contractors are not allowed by the school board to factor that in during negotiations.
Continuing oversight
But Coffey said he is concerned that the board has not been kept fully apprised of the scope of the overages thus far.
Board member Steve Fischer said he shares Coffey’s concern, after hearing from him and others about the overages.
“I’m uncomfortable with hearing from members of the community, and members of the CBAC, of overruns in the projects. My concern is that we’ve not been hearing similar concerns from the administration,” Fischer said.
“I feel like maybe the administration needs to provide the board with more information, or at least as much information that the CBAC meeting is getting and the information that administration is discussing with the chairman of the CBAC,” he said.
The CBAC chairman is Gilbert Santana, who also facilitated the committee that drew up the bond referendum and was a member of the political action committee that successfully pushed for its approval by voters.
Santana said that while he shares some of Coffey’s concern about the overages so far, he is not yet convinced they are emblematic of a larger problem.
“I’m concerned, but my concern is not validated until we arrive at some final decisions. Once we’ve exhausted all the efforts of negotiations, reviewing the building standards – are there are any areas we can reduce requirements but not impact the reliability of the facility – then I really don’t know if we’re sitting here standing at five problems or just one isolated problem,” he said.
Santana said that as estimates for the larger projects come in and there continue to be large overages, he would begin to worry that many of the other projects might not be able to be completed with available bond funds. But he is not yet at that point.
“We have enough data to say, we’ve got a challenge ahead of us. We’ve got to keep working these bids, we need to keep working with the architects and the construction companies and see what we can do to provide quality facilities for not only the budget we have, but for even less than the budget we have, if at all possible,” he said.