A majority of the construction work for Monticello’s school building project has now been awarded after 11 bid packages totaling $19.4 million were approved by the school board on April 30.
Several alternate bids were part of the awarding, including the construction of a 100-seat balcony for the high school auditorium.
Mostly due to an electrical bid that came in $1.1 million higher than estimates, the total project cost is now an estimated $35.5 million, about 7.5 percent more than estimates. Board members leaned toward methods of making up the difference with funding that will not increase tax rates. Those could include purchasing bonds for the full $29.8 million that voters approved for the high school/Washington Elementary work, dedicating additional school facility sales tax to the work, and/or using existing fund reserves.
Until the 11 bid packages came in, architects and construction managers were estimating $33.2 to get the work done, which could be done with borrowing along with sales tax proceeds.
“We were all good until the electrical bid came in,” said School Superintendent Vic Zimmerman.
The $35.5 million cost could come down as district construction managers look at “value engineering” to reduce expenditures. That method was used earlier to bring down construction costs of the project by changing the style of insulation used for the new gym and classroom addition at Washington Elementary, while keeping a similar energy efficiency.
Even after value engineering, there is a gap that will need to be bridged, but Zimmerman said it could be done without an increase to the tax rate, currently around $3.76 per $100 equalized assessed valuation.
A big chunk of the $3.2 million difference could come from levying the total amount voters approved in November of 2017. There is about $2.5 million left in that bonding authority.
Zimmerman said the tax rate could remain the same, but the district would likely see an extra year of payback on the loan, stretching it to 21 years.
There was concern from board member Zach Hillard about an extra payment for a future board to contend with.
“The tax rate is not going up, but it’s still money the district is going to have to pay back over time, and it’s still a large number,” said Hillard. “I think we’ve gotten comfortable because we’re not pushing up the tax rate. I still think we need to consider 20 years down the road, there’s still going to be a big bond payment that needs to be paid off.”
Along with the remaining bond authority, the board also has another $500,000 in its sales tax account that could also go toward the project, and Zimmerman felt comfortable promising another $500,000 from that revenue source in future earnings.
The 11 bids approved on April 30 ranged from a low of $216,363 to M&O Environmental for the demolition of Old Washington school to $4,792,261 to Davis Electric for electrical work.
Decisions on project funding will be discussed further on May 15.
If the three measures are implemented, a total of $35.8 million would be available for the project.
Zimmerman said he also conducted a thought experiment to see if there were other large savings items that could be considered. One – reducing the elementary classroom addition from 14 to eight rooms and keeping Lincoln Elementary open – received a cool reception.
Upon completion of the high school/Washington Elementary project, Lincoln is slated to close.
Other savings items could include placing mechanical equipment outside instead of in its own room, and reducing the gym from 2.5 to 2 courts. But Zimmerman admitted that could compromise the integrity of the project, and no action was taken on those ideas.
Five bid packages are still out, and will likely be approved on May 15. Those are for asphalt, roofing, drywall/framing, flooring, and wood athletic flooring. Project planners estimate those items will cost just under $3 million.
Bringing the project up to the $35.5 million estimate are contingencies, architect and construction manager fees, and soft costs like furnishings.
Zimmerman, who has been involved with building projects in other school districts, said the process Monticello is going through is not unique.
“This is very typical with all school projects, especially so with additions and remodels. So many unknowns versus a brand new facility. An extra factor this time around is the bidding climate. With so much construction work in central Illinois most contractors are booked up. Its a simple supply and demand issue from high school econ class. With higher pricing we had to make decisions to cut pieces out of the project or find a way to pay for them,” he said.
“Our facilities need improvements so we chose to go forward. It will be an interesting two years of construction, but very nice when it is done,” added Zimmerman.