Project delay could be costly
Labor, material expenses expected to rise during interval
A successful motion by Altoona Area School Board member Dave Francis has paused an $88 million building project for two months, but construction proponents say the delay could potentially be a year and the cost could be much greater.
At $88 million, the plan is to build a new B building across Sixth Avenue, renovate the A building and demolish the 90-year-old B building. Renovation of the B building is cheaper, but KCBA Architect Mike Kelly compared it to throwing on a few coats of paint but having no real change.
Two firms — Tower Engineers of Pittsburgh and VEBH Architects — recommended the plan. “If you can afford it, build a new building. It’s a better long-term solution for the community,” architect Dan Engen said in December 2016.
Francis said the voters who elected him in November didn’t want an $88 million high school project.
His motion for a two-month delay was supported by other newcomers Kelly Irwin Adams and Ed Kreuz along with Ron Johnston and Sharon Bream.
“We want to do something, but not at $90 million,” Francis said Friday, rounding the cost up by a couple million. The two-month delay allows new board members to hear other options from different architects.
Enrollment projections forecast a decline across the next 10-year period, but despite the decline, it’s projected to be relatively steady, according to a feasibility study by KCBA.
The previous board determined additional space was needed. The high school setting was also designed to provide learning opportunities in science, technology, engineering and math subjects including robotics, computer-assisted design, graphic design, advanced computer programming and web design. The building design includes spaces for applied engineering, maker-spaces and creation labs for cross-curricular opportunities.
Board President Dutch Brennan said the $88 million plan is the best value for the district’s taxpayers. And the longer the project is delayed, the more expensive it may get.
“I really think that once the new board members review the same materials we have, more of them will see the wisdom in why the building project has come as far as it has,” he said.
A vote to put the project out to bid had been scheduled for February with vote to award a contract in April and construction slated in the summer with completion in fall of 2020.
However, the delay pushes the project out of the summer construction window, Superintendent Charles Prijatelj said Monday. It’s not known whether that means the board would have to wait until the summer of 2019 to start construction, pushing the opening date back to 2021.
Francis did not believe the delay means the project has to wait for a year if the board ultimately decides it’s the right choice.
Impact of delay looms large
But Brennan said the two-month delay has a big impact.
“If you’re a contractor, most of your building takes place when the weather is nice — the spring and summer. You bid on all of your projects and have them lined up for when the nice weather hits. Under this scenario, the (request for proposals) goes out in April, and we accept a bid in June — when most of these contractors already have their large projects lined up for the summer,” he said. “That means there are less bidders, provoking one of two scenarios for us. We could start the project with a contractor who wasn’t able to line up enough business for the summer, costing us in the quality of work or in the proposed cost. We could alternatively wait until the following year to effectively include more contractors in the bid process.”
Brennan said the board does not have the luxury to wait.
KCBA’s Kelly and Damion Spahr of the district’s construction management company, Reynold’s Construction, said in October that costs on average increase 3.5 percent every year a project is delayed. With hurricane damage in Texas and Florida increasing costs of labor and materials nationwide, the increase per year could be even higher, Kelly said.
“Coming out of a recession, coming out of back to back hurricanes, we would predict it could be higher every year you wait,” Kelly said.
The district’s bond counsel Boenning & Scattergood’s current repayment schedule assumes equal annual payments over 30 years at current interest rate levels.
The proposal is to pay $25 million from the district’s fund balance and then borrow $63 million through two series of bonds. The district also is to get $14 million in reimbursement from the state.
Financing the $63 million requires a tax increase totaling 0.61 mills gradually added in over 10 years, according to the plan.
That increase is estimated to cost $70 or less for about three-quarters of the roughly 28,000 commercial and residential properties in the district or ones with an assessed value of up to $115,000.
John McShane of Boenning & Scattergood was not available to comment on whether delaying the project for a year could mean higher interest rates.
“The longer we wait, four things happen,” Brennan said. “One, our current high school continues to deteriorate, costing us even more money and raising the potential for a catastrophe. Two, elementary children’s education continues to suffer due to congested conditions. Three, high school education continues to suffer due to our inability to keep up with evolving technology. Four, we will pay more per square foot of facility. With Donald President Trump’s tax changes, the amount of disposable income individuals have will rise and costs will go up.”
Brennan also worries about higher interest rates for borrowing money if Trump’s tax cuts lead to explosive economic growth as he predicted.
In 2015, Windber Area School District’s project was delayed by planning hurdles. Renovations to classrooms and other existing space ended up $2 million over budget, the Johnstown Tribune-Democrat reported. Board members speculated their schedule for the project might be partly to blame for the higher costs. Initial plans to seek bids earlier in the spring were delayed. It left them with a somewhat short construction schedule that would require contractors to deal with both winter and school days, the paper reported.
Mirror Staff Writer Russ O’Reilly is at 946-7435.