LEAD — While not ideal, but considering the current construction market, a $300,000 overage on an elementary school kitchen and cafeteria remodel has proven to be more palatable than a $1 million overage, prompting the Lead-Deadwood School Board to move forward with Phase 3B of the elementary school renovation project, awarding the low base bid at a special meeting Dec. 22.
The district rebid the project after rejecting all bids in November, as the lowest bid of $3,178,000 was approximately $1 million over the $2.1 million engineer’s estimate on the project, which was budgeted at $2.6 million.
With a bid of $2,737,000, the low base bid was awarded to MAC Construction, along with a $28,000 dishwasher alternate, for a total of $2,765,000.
A list of approximately $188,000 in other bid alternates is still being considered for approval by school district officials, if additional cost savings is found on the project.
“Last time we opened bids, if you recall, we were roughly a million dollars off our budget and we did some things to try to thwart that … but we still didn’t meet our budget with the bids,” said Lead-Deadwood School District Superintendent Dr. Erik Person. “But I think we went from being a million dollars off to being $300,000 off.”
Person went on to say that revisiting the project in six months to a year will likely not garner lower bids.
“My recommendation today is that we approve the low base bid and then we go to work on working both sides of the equation,” he said. “Talk about some value engineering options, working on chiseling away, getting some of the costs down, while also working on the funding side, I feel pretty confident we can find that $300,000 … and if we’re successful in finding more than the $300,000, then we look at starting to build back in those alternates.”
School District Business Manager Margie Rantapaa spoke to the financials.
“The base bid is $2,737,000 and if you add back in the mini-splits (AC) of $170.000, that brings us to $2,907,000 and our budget for this project was $2,609,849, so we’re $297,151 over budget and then, the HVAC that was added in, that we just paid last month, that was $14,725 and we also got a bill for the added engineer of $3,500, so that brings us to the $315,376 that we’re over budget on this project.”
Rantapaa said the district’s fund balance through June 2023 is going to be $1.395,000.
“So we do have a little wiggle room in our fund balance, but keep in mind, we’re only generating 2.4% now from capital outlay, where, we were generating a whole lot more before they changed the law,” Rantapaa said.
In Fiscal 21, the Lead-Deadwood School District lost $400,000 in funding.
“This year, we could’ve requested $3.2 million, based on our valuation and we were limited to $2.4 (million), $2.5 (million), so that’s $1.2 million that we lost in capital outlay, just in two years, no fault of our own, it’s just the law changing,” Rantapaa said. “So, with that said, I think we do need to keep a fund balance in our capital outlay because we don’t know what our enrollment’s going to do and that’s how it’s based and we’re transferring $1 million to the general fund. It might not be enough and we’ve got $400,000 in capital outlay certificates, so that leaves $1 million to do other things district-wide. We’ve not been in this position before. We’ve always been very flush in the capital outlay, so it’s rather frustrating.”
School Board Chairman Suzanne Rogers asked Rantapaa what her comfort level was.
Rantapaa said she thinks the project needs to move forward, but that the district needs to be very careful when building budgets for the next four to five years.
School Board Member Amber Vogt said she would like to see the entire project move forward, including alternates.
“I struggle with being over budget that much on a project, when it wasn’t budgeted,” Vogt said.
Person said he is hopeful some of the project will qualify for ESSER funds and that money can be found in next year’s capital outlay budget, as well as cost savings within the current project bid.
School District Building, Maintenance, and Transportation Director Bill Snow said one good thing that came out of the rebid is an improved project time frame.
“If we were able to start this, that we’d be able to go from June to December, so we’d only be going one school year,” Snow said. “I do think we need to move forward with this.”
School Board Member Tim Madsen said that there are cost-saving opportunities in the bid.
“We just have to be conscientious of what we can do,” Madsen said, adding that this will require more involvement in the school district’s role as the owner of the project.
Rogers said she prefers alternate means of finding cost savings, rather than taking the money out of capital outlay.
Senior Project Manager Dustin Schilling of ICS Construction presented the current phase 3 project budget of $4,094,887 to the board, per Rantapaa’s request and potential cost savings were discussed.
Two other base bids were received on the project: $2,785,000 from Complete Construction and $2,769,000 from C Eagle Construction, LLC.
In November 2020, the Board of Education adopted a resolution to finance $3.1 million of the $4.1 million Phase 3 facilities update with capital outlay certificates at an interest rate of 1.44%.
Phase one work involved installation of a high school elevator, tuckpointing at the high school and elementary schools, and two retaining walls at the elementary school at a cost of $1.3 million.
Phase 2A work consisted of renovating third and fourth floor classrooms and bathrooms, as well as the installation of a rooftop air conditioning unit and making the auditorium handicap accessible at a cost of $3.4 million.
Phase 2B entailed renovating the second floor and moving the school offices from second floor at the top of the stairs to the building, to the first floor, just off the lunchroom, at street level, at a cost of $2.1 million.
Phase 3A, a second-floor restroom renovation was budgeted at $218,282.
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