Letter to the Editor: High School Renovation Accounting

Here are the latest figures for the Mt. Lebanon High School renovation (or reconstruction) project:
Total project hardware cost through the end of July, 2015: $86,390,431
Total project cost, including "soft costs," through the end of July, 2015: $102,375,450
(To put this in perspective, the total project cost through July, 2015, represents $3,089.46 for every man, woman, and child in Mt. Lebanon)

During the "Construction Update" of 10 August 2015 it was announced that there were no change orders (CO) in the pipeline for August, 2015. However, that does not mean the end of additional charges. We will likely see more change orders coming next month. Here is the latest accounting of change orders through the end of July, 2015:
Total Spent: $4,545,383.57 (includes refunds)
Average Transaction: $16,772.63 (includes refunds)
Median Transaction: $10,081.00 (includes refunds)
Count: 271 Transactions (total CO's and refunds)

The following table breaks out expenses and refunds separately
Average CO: $20,809.03
Average refund: -$36,762.79
Median CO: $11,064.50
Median refund: -$7,774.00
Total spent on CO's: $5,243,876.57
Total refunds: -$698,493.00
BALANCE: $4,545,383.57
Contingency Fund (FORMERLY $4,276,000.00 – add $538,000.00): $4,814,000.00
Available Balance: $268,616.43
% used: 94.42%

There have been 38 months of change orders, averaging $119,615.36 per month. For the first seven months of 2015 the monthly average is $73,773.57. The District spent all of its original contingency amount as of February of 2015, requiring an infusion of over a half-million dollars of additional cash. While it is true that the amount of money spent on change orders per month is decreasing, the project is not over and there are many unknowns associated with the upcoming building demolition. Despite assurances at the beginning of this project - oft repeated, at least until the late Fall of 2014 - the original contingency fund amount of $4,276,000 was not sufficient to cover the expected additional costs of construction. It remains to be seen whether the additional infusion of $538,000 will see the project through to the end.

Stay tuned.

Richard Gideon