The Grand Island school board on Thursday evening approved awarding Lacy Construction the contract to add onto Barr Middle School and renovate portions of the existing school for a price of $12.073 million.
Lacy had submitted a base bid of $12.425 million to do the work, but Dan Petsch, GIPS buildings and grounds director, said that cost was reduced by deciding not to do some of the improvements that school officials had hoped to do. The biggest deduction was $262,000 for not resurfacing the east parking lot and making it into a concrete lot.
Petsch said there were two small-cost add-ons to the project: a 1962 switchgear for the building’s electrical system at a cost of $12,500 and spending $34,000 to redo underfloor plumbing that needs nearly constant repairs and maintenance.
Business manager Virgil Harden said that the cost of redoing the plumbing now will probably be saved 10 times over in future repair and maintenance expenses.
Despite lowering the cost to $12.073 million, the school district really needed the construction contract to come in closer to $10 million because of the nearly $1 million in architectural and engineering fees that are part of the Barr project, Harden said.
The Barr improvements are part of a $69.9 million bond issue approved by school district voters last year. So far, the school district has actually issued just a little more than $51 million of those bonds.
Harden noted that the district was able to issue those bonds at a premium because its coupon/interest rate was higher than prevailing interest rates. As a result, the district received an additional $5 million in bond proceeds.
Some of that bond premium also already has been used to help finance the cost of building Starr Elementary.
Harden told the board that to finance the Barr project, the district should use another $1 million from the bond premium to underwrite the cost of building improvements. The district would also invest bond proceeds to earn another $1 million in interest income to finance the Barr improvements.
Despite that additional income, school officials must still find another $645,000 in savings. Harden said they will do that by “value engineering” the remainder of the project. After the meeting, he gave an example of how this would work. For example, school officials would have liked to put LED lighting in the building additions and retrofitted the rest of Barr with LED lighting. It could save $55,000 by forgoing that work.
“You do that 10 times and you’ve just about saved the money you need,” he said after the meeting.
Petsch told school board members that the possibility of reducing the number of square feet to be added to Barr was considered. However, a reduction of 4,500 square feet would only save $300,000.
Even worse, he said, taking that much square footage would likely mean that Barr would return to its overcrowded conditions in just four or five years.
Petsch said all the bids submitted for the Barr project were very close to one another. That means the district had a good set of plans, with contractors all seeing the same thing when it came to the work the school district wanted done at Barr.
Petsch, Harden and architect Jim Brisnehan all said contractors and subcontractors are so busy that it is extremely difficult to get projects bid at the desired price. A number of other Nebraska school districts have run into the same problem of having bids come in higher than anticipated.
Petsch said that a contractor with five other projects already underway is only going to submit a bid for a price that he feels will guarantee a profit. He said that includes the possibility of needing to pay employees overtime to get the work done on deadline.
Brisnehan noted that contractors are not just busy with school bond projects, but many other large construction projects. He has been told that what is happening in Nebraska right now is nearly unprecedented.
Harden noted that GIPS still has $3 million in bond premiums to complete the new Stolley Park Elementary, new Jefferson Elementary and renovation of the 100 wing at Grand Island Senior High.
Brisnehan said work for contractors should slow down a little as some school bond projects are completed.
Petsch noted the district will also have a little more flexibility when it comes to the timing of future bid openings. He hopes the district can time those bid openings for a period when more contractors are looking for work.
In other action Thursday, the board approved buying a home at 614 N. Jefferson. That home will be razed to provide a construction staging area when the new Jefferson Elementary is being built. Eventually, that property will be turned into parking for Jefferson.