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McCarthy, DHA come under fire from Mehlville board

Seemingly frustrated with higher-than-anticipated bids for Proposition P projects, at least one Mehlville Board of Education member believes the construction management and architectural firms for the districtwide building improvement program deserve an "F'' for their efforts.

Board members last week discussed bids for renovation work at Blades, Beasley and Point elementary schools — work that if approved would have placed Proposition P $1.2 million over budget.

Board members tabled consideration of the bids until Feb. 10 — after the Call went to press — realizing that if they did not approve the bids that night they would risk construction delays for the work scheduled this summer at the schools.

School board members grilled representatives of the McCarthy Construction Co., the Proposition P construction manager, and Dickinson Hussman Architects, the Proposition P architectural firm, about why estimates presented weeks before the Feb. 2 meeting, originally scheduled for Jan. 27, were so much less than the bids the district received for the projects.

Voters in November 2000 approved a 49-cent tax-rate increase to fund Proposition P, then estimated to cost nearly $68.4 million. However, the Board of Education last September adopted a revised Proposition P budget totaling more than $86.7 million.

The board essentially would deplete certificate of participation contingency funds that currently total $832,760 if it approved the numbers presented Feb. 2.

Despite the $1.2 million overage, the district was able to offset $312,800 of those costs through a Missouri Department of Natural Resources loan, but the district still has to fund $896,440.

Renovation work at Forder, Hagemann and Rogers elementary schools and the construction of a new early childhood center are remaining Proposition P projects that would have no contingency funds to fall back on if those projects went over budget and board members approved the initial bids for Blades, Beasley and Point.

In January, numbers were presented to the board based on McCarthy estimates that indicated Blades, Beasley and Point would go over budget, but only by $264,305.

Blades was estimated during a Jan. 12 meeting to be $127,976 over budget, but actual bids presented last week indicated it would be $555,818 over budget, excluding the $82,000 offset by a DNR loan.

Beasley was estimated in January to be $158,033 over budget, but bids presented Feb. 2 showed that Beasley would be $171,620 over budget, excluding the $66,800 offset by a DNR loan.

Point projections presented in January indicated that the school actually would have been $21,704 under budget, but figures presented last week showed board members Point would be $481,802 over budget, excluding the $164,000 offset by a DNR loan.

Randy Charles, assistant superintendent for finance and the district's chief financial officer, addressed the board, explaining the additional budgetary challenges the final bids now pose for Proposition P.

"If we were to approve these as presented then, obviously the question is, how do you fund that? I think the short answer to that question is, it would require yet another budget revision, an increase of the budget that was approved back on Sept. 15," he said. "The only place where that money would come from is, again, is money being generated by the 49-cent levy, beyond what's needed to make our COP (certificate of participation) payments. But with that money the real challenge would be the timing of that tax money coming in vs. the timing of the expenditures ... We'd have to address two issues."

One of those issues would be the amount of money, Charles said, while the other would be the district's cash flow.

He also presented figures that revealed that Hagemann, Rogers and the early childhood center would come in under budget by $297,523, based on McCarthy estimates. Besides renovations at Forder, which is projected to be $856 over budget and roofing projects, which are projected to be on budget, Charles told board members that total Proposition P work is estimated to be $599,733 over budget.

Despite board members' questions about why the actual bids for the projects were so much higher than the estimates, neither McCarthy Construction nor Dickinson Hussman Architects representatives could state specific reasons for the overages.

"The charge of your contract is to hold to the budget and to complete the project," board member Rita Diekemper said during the Feb. 2 meeting to John Heidbreder of McCarthy. "You know, we're almost to the end and now you say that there are these huge overages. Do you think we're stupid?"

Board member Bill Schornheuser also wanted an explanation.

"At Point (Elementary) in November (during a Proposition P Oversight Committee meeting), I do recall asking the question, how good were these estimates?" he said. "... They stated they were going to be darn good ones ... Because we were looking at all of the rest of the projects trying to figure out how we could put the DNR loans in at the same time. And my concern was there, obviously, how good were the estimates going to be? At that time again, they told us they'd crawled through, they'd looked at things, these were going to be good estimates. I just want some explanation as to why they're so far off."

But Heidbreder said, "I cannot address the bidders choosing to submit bids, sometimes, that have some very major swings from how one bidder looks at the scope of work to where another bidder looks at the scope of work on the same project. Even some of the numbers in front of me today ... there's a 100 percent variation from one contractor to another on a given day ...

"I can't answer — we're working on a variety of things, that would say why the numbers are the way they are versus what you were led to believe only a few short weeks ago,'' he continued. "Certainly that can be addressed by more research discussions ... and we will do that to answer that question for the board."

Diekemper added, "Well, when you do that can you put in how you intend to complete the project and all the things that you promised with the money that we have?"

Heidbreder noted that McCarthy had presented programs, approved by the board, that have enhanced Proposition P projects, such as the replacement of boilers, fire-alarm systems, cable tray enhancements, asbestos abatement with the installation of new ceiling and floor tile and sprinkler systems.

"One of the things that we have to understand is the added things that have been incorporated into the projects, that have actually been billed on prior projects, we can't take those things back out," he said.

But no enhancements had been added in the past three weeks, Schornheuser told Heidbreder.

"I understand," the McCarthy representative responded. "We still have another week to analyze that."

But Diekemper contended that it was McCarthy's responsibility to ensure the district had enough money to finish all of the Proposition P projects.

"This is why we hired you," Diekemper said to Heidbreder. "So that, when we were one year into the project, three years into the project, that we would have enough money to complete all the projects. That's your job, so that we weren't in year four and you were telling us, 'Well, we can't go back and do year two.' I mean, that was the whole reason you were hired, so that we could make sure that at the end, there was going to be enough."

At the beginning of the Blades, Beasley, Point discussion, board President Cindy Christopher expressed her disappointment with the overages, especially, she said, after the board had approved a revised budget in September.

"We, in good faith, approved that budget in September ... three and a half years into a five-year plan and approved a budget that was given to us without any revisions and now five months later, we're $600,000 off?"

Diekemper interjected, "Those were their (McCarthy's) numbers."

"In September, those were your numbers," Diekemper said to Heidbreder. "Nobody in the district said you need to reduce these. No one said: 'You know, we want to see different numbers.' We took your numbers as you presented them to us and we approved them in good faith.

"Have we always, since the beginning of this contract, treated McCarthy and Dickinson Hussman in good faith as partners in this project?" Diekemper added.

Christopher asked, "Who's going to assume the responsibility to the community?''

"And children?" Diekemper added.

Dwight Dickinson of Dickinson Hussman Architects, also was called upon for an explanation as to why the bids were higher than anticipated for Blades, Beasley and Point.

"The only thing that I can tell you is that the designs that were developed for all three schools were put together based upon us sitting down with the district, going through and making sure we had a scope of work that met Prop P," Dickinson said. "That was our charge. And we believe that the design team met that charge."

Schornheuser later noted, "I still cannot comprehend what happened from September of last year to November to January to today. And again, since we are a school district, if we were giving out a grade, obviously McCarthy and Dickinson Hussman would be an 'F' right now ... We revised the budget based on the additional knowledge that your two organizations have built over the last three years and we did that in very good faith. And in the last six months, you tell us you're wrong.''

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