The Garden City Telegram
Email this story | Add Your Comment
| Read (0) Comments
Escalating costs figured into bond
Published 10/24/2008 in News : Education
By EMILY BEHLMANN
What's it cost to build a high school?
About $104 per square foot -- in 1995. Last year, though, the national average cost per square foot for new high school construction was $171.43, according to the School Planning and Management industry magazine's 2008 Annual School Construction Report, published in February.
"The one-year increase from schools completed in 2006 ($151.52) to those completed in 2007 ($171.43) was a whopping 13 percent!" wrote Paul Abramson, education industry analyst for School Planning and Management.
It's not getting any better. Last month, the third quarter 2008 Turner Building Cost Index, which projects domestic commercial building construction costs, increased by 1.77 percent over the second quarter and 6.49 percent over the third quarter of 2007.
The rapidly escalating cost of construction -- which is outpacing the Consumer Price Index and the Producer Price Index -- makes it hard for architects and other capital project planners to determine what it will cost to complete a major project, said Garden City architect Stuart Nelson, of the firm Gibson, Mancini, Carmichael & Nelson.
That's especially the case when the project is expected to take as long as it would to carry out all the work proposed in Garden City USD 457's bond issue, on the Nov. 4 ballot. Nelson is the principal architect on the project and is working with DLR Group, of Overland Park.
The bond issue would fund construction of a new, larger high school to replace the current one, conversion of the main Garden City High School building into a middle school, conversion of Abe Hubert Middle School into an elementary school and expansion of Garfield Elementary School into a centralized early childhood center for a total price of $97.5 million.
The high school, if voters approve the issue next month, wouldn't be open until August 2012. For the most part, the remainder of the projects would have to start afterward, once high schoolers are in a new location.
Nelson said he and other architects use past experience in working with a certain type of facility and the materials involved to develop a starting point for estimating costs. Then, they rely on a variety of industry publications and newsletters that show price trends and projections for the near future. They factor in materials costs, labor costs, fuel costs and more, but it's still difficult to determine how bids will come in months or years later.
That's part of the reason for the 5-percent contingency built into USD 457's bond project, he said. The more than $4 million, a part of the total $97.5 million bond issue, would partly cover inflation beyond what's already anticipated.
"We hope that covers any unforeseen items or costs that might accelerate more than we think," he said.
Superintendent Rick Atha said there's "significant inflation" built into the bond proposal because the project's architects know construction costs are escalating.
"They seem confident the prices are accurate, and we can fulfill the project for that amount," he said.
Still, he said, the district is exploring other options that could help make it more certain that the school district's plans would be completed on budget. If the bond passes, the Board of Education will have to decide how to manage the project -- bidding out straight to contractors or hiring a construction manager.
A new option available to public agencies, thanks to a recently approved state statute, would allow the board to use the construction manager at risk process, under which a construction manager, rather than the school district, would assume the risk of the project coming in above cost.
That's something that has happened recently in some other Kansas school districts.
In Copeland, a project to replace most of South Gray Junior High School is being delayed, and likely scaled back, after bids came in about $300,000 above the $4 million budget. The project is to be funded by a $4 million bond issue approved in April. Superintendent Jay Zehr said he expected a revised plan with slightly smaller classrooms, a reduction in offices and a few other changes would allow the district to achieve its goal with the funds available.
When Hutchinson USD 308's plan for a $29.6 million high school project, approved as part of a $78.8 million bond issue two years ago, came in 23 percent over budget, it prompted the district to take a different approach. The district is now seeking a firm to work within the construction management at risk process, according to the Hutchinson News.
Atha said if USD 457's bond issue passes, the district will decide at that time whether to go through the construction management at risk process, too.
Get the latest news about Garden City USD 457's bond issue and share your thoughts on the "Up to the Minute" blog at http://gctbond.wordpress.com.
Found 0 comment(s)!
Twitter Updates
