With subcontractor bids in hand, the Selectmen concluded this week they will need to ask the town for more money this fall to complete the renovation of Town Hall that voters approved two years ago.
Chairwoman Marie Sobalvarro told her colleagues Tuesday that the winning bids for major components of the planned revitalization were 25 to 30 percent above estimates. (See the table that accompanies this article, “Winning subcontractor bids versus estimates”) When general contractor bids are opened next Thursday, she said, she expects the project will need another $700,000 before construction can begin. Selectman Leo Blair put the amount closer to $1.2 million to include contingency funds.
Reading the tea leaves
“We wanted to see the tea leaves [before starting construction],” said Sobalvarro. “Now we have some tea leaves. As [Selectman Leo Blair] predicted, costs have gone up.”
“Whatever we do,” said Blair, during the discussion that followed, “we have to go back to the voters,” a sentiment shared by his colleagues as they reacted to the news.
The most likely scenario? A Special Town Meeting (STM) followed by an election at which voters are asked to approve the borrowing of the extra money, first by passing a Town Meeting article and then a ballot measure. Given that another group in town—the Community Solar project— submitted its own petition for an STM just this week (see “Community Solar petitions for a special town meeting,” page 1), the matter is likely to be taken up on or before Oct. 26.
Bids for 10 major components of the project, ranging from masonry to heating, ventilation, and air conditioning, were opened last Thursday, September 5, in Town Hall by members of the project team; and when the results were tallied, the amount was roughly 35 percent higher than estimated by the Town Hall Building Committee (THBC) in its most recent budget.
Estimates overly optimistic
Boston-based Daedelus, which provides cost estimating services for the project, calculated in late July that subcontractor costs would total roughly $1.5 million. Thursday’s result puts the total closer to $2.1 million. According to Amy Lombardo of LLB Architects, who oversaw the opening of the bids, subcontractor expenses typically account for 50 to 60 percent of total project costs. If that relationship holds true, once general contractor bids are in, the final amount needed for construction is likely to exceed $4.2 million, pushing the total budget well beyond the $3.9 million approved by voters.
When they gathered to review the bids two hours later, the THBC members present— Peter Jackson, Chris Cutler, and Town Administrator Tim Bragan—seemed taken aback by the size of the increase and the speed with which it had occurred. The estimates by Daedelus, conceded Lombardo, had been “overly optimistic.” Cutler suggested that contractors were “making up for doing things at cost for the last three years.”
Although the numbers are dramatic, they are not yet final. The town received only a single bid for the two-story elevator planned for the Town Hall addition, and the amount was twice the project estimate. The committee will rebid the work.
Bids for doing miscellaneous metalwork and providing heating, ventilation, and air conditioning also exceeded project estimates by wide margins, leading team members to wonder if the bid documents for those services had been misunderstood. If phone calls to the bidders prove that to be the case, the town will solicit a second round of bids.
A $1.2 million shortfall?
On Tuesday, the Selectmen voiced disappointment at the news, but showed little surprise. “My hunch,” said Blair, is that construction will be $700,000 over budget and that the construction contingency will need to double, from 7 percent to 15 percent. “When you open walls in an old building, there’s never good news,” he said. He added that abandoning the existing design now “would be a bad decision. I see nothing that would warrant our going back to the drawing board,” he said.
At the meeting, Chairwoman Sobalvarro presented her colleagues with 11 options for “addressing the shortfall,” some requiring town meeting approval and a ballot, and others not. (See table at right.)
In the discussion that followed, Blair again took the lead, stating that borrowing was his preferred method for acquiring additional money to complete the project. “I’m not a big fan of debt,” he said, “but it would be a shame to raid [other funds] that are hard to come by when we can borrow money at 2 percent for 20 years.” Whatever the Board decides, he added, “it needs to be really simple. We have some fence mending and explaining to do. The town will expect us to execute flawlessly.”
Other members of the board commented briefly on the options before them, but none seemed to support a strategy that would require assembling the money from the various pots that Sobalvarro had listed or seeking relief through an esoteric ruling by the Department of Revenue or the sale of town land. None objected to the need to take the decision to town meeting.
The big question on everyone’s mind is: What will bids for general contractor services look like when they’re opened at Town Hall on Sept. 19? The Selectmen will meet next on Sept. 24 and are expected to decide then on their next moves.
