Mehlville's Proposition P budget could be increased by $1 million
Mehlville School District administrators soon could recommend up to a $1 million increase to the Proposition P districtwide building improvement program budget so enough money will be available to fund the remaining projects, according to Superintendent Tim Ricker.
No final numbers have been presented to the Board of Education, Ricker told the Call, but administrators estimate an increase ranging from $750,000 to $1 million will be necessary to solve the Proposition P budget's cash-flow problem — much of which has stemmed from project overages.
Voters in November 2000 approved a districtwide building improvement program then estimated to cost nearly $68.4 million that would be funded by a 49-cent tax-rate increase. However, the Board of Education last September adopted a revised Proposition P budget totaling more than $86.7 million.
District officials predict the district will have to dip into a Proposition P contingency fund by about $784,864 to cover higher-than-anticipated bids for renovation work at Blades, Beasley and Point elementary schools. Board members were told Jan. 12 that the schools would come in $264,305 over budget, based on estimates from McCarthy Construction, the Proposition P construction manager.
The Proposition P construction contingency fund, according to Feb. 10 district documents, totals $832,760. With the $784,864 in unanticipated costs from Blades, Beasley and Point, $47,896 would be left to buffer any overages for Proposition P's three remaining projects.
Renovation work remains at Forder and Hagemann Elementary School and construction of a new early childhood center has not yet started.
Nearly every Proposition P project has gone over budget by some amount, according to Ricker.
Board members twice had postponed final consideration of bids at the three schools so that cost-saving measures could be found to prevent the district from going $1.189 million over the Proposition P construction budget, but last week voted unanimously to award the bids.
The bids that were approved Feb. 24 will send Proposition P $1,245,151 over its construction budget, based on changes from incorrect pricing and an incomplete bid.
Board member Bill Schornheuser requested that McCarthy officials explain why the bids came in so much higher than what was expected and reported to the board Jan. 12.
Kevin Kuntz of McCarthy said it was premature to report figures to the board Jan. 12. If McCarthy had waited a few more days, it would have had more accurate estimates for board members. He also attributed the high bids to the nation's economy and the rising cost of metal and steel, but he noted that was a small factor.
"What happened, basically as you all know, when we took the bids they were about $600,000 over our estimates ...," he said, noting that McCarthy based the estimates on 75-percent complete documents, which has been standard practice during McCarthy's involvement at Mehlville.
Not doing a second estimate, he told board members, on 100-percent complete or final documents saved the district about $200,000 in pre-construction costs.
"To date, our bids are about 6 percent under all of the (75-percent) estimates that we've done. Unfortunately on this last one, we had a different situation where, of course, the bids came in over the estimates," Kuntz said.
Upon investigation, he said he discovered estimates were given based on documents that were "less than 75-percent complete.''
"My estimators were really concerned at that time that they didn't have enough information to give a good estimate. Based on schedule constraints and us trying to get the documents out to you, we went ahead ... What I found is there were some significant changes in the final documents,'' he said.
He discovered various inconsistencies between the final documents and the 75-percent documents on which the estimates were based, such as the amount of outlets and exterior lighting at the schools and the oversight of an underground electrical line at Beasley and a number of unanticipated markups from the individual contractors.
Kuntz told board members McCarthy Construction would discount the district and absorb $65,000 in pre-construction costs because of its bad estimates and to help negotiate a final contract.
Board member Rich Huddleston made the motion to approve the bids for Blades, Beasley and Point.
"If any of you have ever taken an accounting class or anything in business, you outline your problems in a T with a good side and a bad side," Huddleston said. "We've got some bad points here. We don't maybe like the bids, maybe we don't like the way things were overlooked ... You line up all those bad points, you move over to the good points.
"We're at a point in time I think where we simply have got to move on. We can probably discuss this all night. The figures probably ... are not going to change a whole lot. I think McCarthy and Dickinson Hussman, we've had a long relationship. We've come a long way. I don't think we want to change horses in the middle of the stream ... And you kind of have to overlook what's happened and let's just move on,'' Huddleston added.
About $312,800 of the $1.245 million overage has been offset through a Missouri Department of Natural Resources loan that will be awarded to the district for installing energy-efficient chillers.
McCarthy Construction and Dickinson Hussman Architects, the Proposition P architectural firm, also have identified $172,487 in savings that contractors will credit back to the district through change orders once work on the schools begins. The majority of the construction, which primarily involves air conditioning upgrades at the schools, will take place this summer.
However, through the district's value-engineering process, additional costs have been discovered, which offset some of the savings. Numbers reported to board members and the public last Friday changed as a result of the additional costs.
Blades, according to the bids approved by board members Feb. 24, is $582,787 over its $1,226,029 construction budget. The DNR loan offset $82,000 of those costs and McCarthy and Dickinson Hussman discovered an additional $145,289 in savings. However, district documents indicate Air Master, the mechanical contractor, did not include plumbing pricing in its original bid — costing the district an extra $31,079. Also, an increased capacity chiller will cost the district an extra $34,054 because the Trane Co. incorrectly had priced a smaller capacity chiller.
District officials predict they will need $380,498 in contingency funds for the project, up from the $320,035 reported to board members and the public Feb. 19.
Beasley, according to the bids approved by board members Feb. 24, is $185,976 over its $1,001,877 construction budget, of which $66,800 was offset by a DNR loan. McCarthy Construction and Dickinson Hussman have found at least $4,398 in savings for the project that will be credited back to the district through change orders throughout the course of the work on Beasley this summer.
However, the Trane Co. also incorrectly priced a small chiller for the school and an additional $18,367 will be needed for a larger capacity chiller.
District documents indicate that unanticipated costs for Beasley total $114,778, up from the $113,492 in unanticipated costs reported to the board and public Feb. 19.
Bids approved by the board last week for Point send the school $476,388 over its $1,060,554 construction budget. A DNR loan will offset those costs by $164,000.
Additional savings in the amount of $22,800 also was discovered by McCarthy Construction and Dickinson Hussman for the school.
District documents indicate that once change orders are credited back to the district after construction begins, $289,588 will need to be taken out of the construction contingency fund to cover the overage.
Board Vice President Matthew Chellis questioned McCarthy representatives about a separate matter related to the bids, wanting to know why Johnson Controls consistently has been the sole bidder for control work on all the Proposition P projects.
"I know there are other firms that do control work," Chellis asked Jim Ulkus of McCarthy. "Would those other firms be able to provide compatible equipment? Why aren't we getting any other bids?"
Ricker told Chellis the decision to make Johnson the sole contractor for controls work was made four years ago so the district easily could evaluate heat inefficiencies.
Ulkus added, "The decision was made at the onset of Prop P projects by the district and specifically by, well with the input of Rick Platz (the district's director of operations/maintenance) who deals with controls in the entire district (who) wanted a single source for a control system for the entire district. So, the district already had Johnson Controls in some of the buildings ..."
He also said that Johnson's bids have been scrutinized, negotiated and lowered, just as bids for other work categories have been.