In today's Post-Gazette and Almanac, John Ewing submitted this letter to the editor.
ML school directors didn't rebuild homes
Mt. Lebanon school directors live in houses built in 1925, 1926, 1929, 1931, 1935, 1941, 1952 and 1955. Not one destroyed their house to build a new one -- yet the high school Building C, built in 1972, is being destroyed and replaced.
According to an architect's Act 34 testimony, tearing down Building C and replacing it will cost $40 million. The district has a debt limit it can't exceed unless the high school project is put to a referendum.
How much of that $40 million to replace Building C is a cost overrun built into the project bidding documents?
Contractors often study bidding documents carefully to bid projects at cost in order to win construction jobs. Most contractors count on change orders to make profits on building projects.
Considering the Mt. Lebanon contract cost is constrained by referendum limits, how much can contractors count on making when Building C is being destroyed and replaced instead of being remodeled?
JOHN EWING
Mt. Lebanon
The writer is a former member of the facilities committee of the Mt. Lebanon school board and also a former finance committee chairman.
Read more:
http://www.post-gazette.com/pg/11006/1115821-55.stm#ixzz1AHRc04wP
5 comments:
Sounds like this should be called, "C-gate!"
John,
WOW!
It sounds like you are saying that someone is going to make a lot of money from the Lebo taxpayers when the school is built!
Shame on our Board!
Mr. Kendrick, I’m doubtful contractors will make much money on our high school construction. The board put $5,500,000 into the capital projects fund recently. If the Budget can be padded enough to reach $10,000,000 then the projection you wrote to Mr. Franklin of $123,000,000 will probably be close to the actual project cost attainable on the high school without a referendum. So far you are the only person who noticed that possibility. Thank you for the observation.
Beyond that, the Board passed a resolution to put $1,600,000 into the fund for retiree health care. When they did it they only had $1,100,000 to actually put into retiree health care and the other $500,000 was committed for retiree health care.
I’ve never seen the actual total cost of the retiree health care liability, but I have never seen a Board commit $500,000 in future costs before they had the money either. My estimate is the $500,000 is probably padded into this year’s Budget because there was discussion of placing $500,000 of a $1,000,000 Budget overage into a reserve account at the last Audit and Finance Committee meeting, but there was no discussion about removing the remaining $500,000 from the Budget excess.
If we have to commit $500,000 ahead of time to retiree health care, my hunch is the Board has only put their toe in the water on the future total retiree health care obligation. They won’t have the money to approve many change orders on the high school project if they are going to protect their obligation to our retired teachers’ health care. So unless the contractors bid a profit percentage into the high school cost, the retiree health care requirement will keep a lid on change orders for the high school project. Thus, contractors will more than likely have to bid a profit percentage on the project to do better than break-even on the high school. I’m guessing change-order bidding won’t work in our District.
The construction and retiree health care contributions will also keep a lid on funding of sports fields. I’m glad I’m not a contractor applying for a school board position with the hopes of getting turf and lights for a football field. I don't think we have the money.
John,
I stand corrected.
You have made an excellent analysis.
From all of us that are trying to understand and deal with the mess that our RINO School Board Directors have left us, thank you.
-John Kendrick
John,
I looked at your letter to the editor more carefully and examined the budget and I agree with your point.
The problem is the $20,000,000 in site costs.
If the $20MM is site costs is removed, then the building construction costs are in line with current rates, but when you add in the $20MM in site costs it distorts the construction rate.
The root of the problem is accurately pointed out by your editorial. The School District designed a project that replaces a 200,000 square feet facility with two new buildings whose combined square footage is less than 200,000 square feet, and there is extensive site preparation needed to build the new design.
It doesn't appear that this design is a very practical or an efficient use of taxpayer funds.
You've made an excellent analysis and raised a very good point.
Thank you,
John
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