Over budget: BV board reviews cost-saving ideas for building project

Friday, October 5, 2018

The Berryville School District’s building project is currently a little more than $1 million over budget.

The Berryville School Board met Wednesday, Oct. 3, with Nabholz Construction, the construction manager, and Lewis Architects Engineers, the architect, at a special meeting to review cost-saving options for the project and discuss strategies for moving forward.

Budget summary

Jeff Gattis, senior project manager with Nabholz Construction, presented the board members with a program budget summary outlining the costs of each section of the project and value engineering (VE) options.

According to the document, construction for the project will cost $25,689,644 in total with the athletic complex costing $6,300,000, the high school costing an estimated $16,102,78, the middle school cafeteria costing an estimated $3,086,846 and the demolition of existing buildings costing an estimated $200,000.

Additionally, the project will cost about $1,541,378.64 in architectural and engineering fees, $10,000 for geotechnical engineering, $1,167,850 for furniture, fixtures and equipment and $100,000 for administrative office renovations.

In total, the summary states, the project will cost about $28,508,873 at this point, exceeding the district’s budget of $27,350,000 by $1,158,873.

On bid day, Gattis said the high school construction came it at about $18,088,974. Nabholz was able to take off $1,986,176 through VE options, he said. The middle school cafeteria came in at $3,518,690, he said, and Nabholz was able to take off $431,844 through VE options.

“We found about $2 million to take out of that scope of work without interfering with the program of requirements (POR) for the state of Arkansas,” he said. “You will still get a good, strong, durable school without doing anything that would have an effect on the longevity of the school.”

Board president Chad Hipps asked how Nabholz was able to reduce the cost by $2 million just by changing materials.

“That sounds like a big chunk for cheaper stuff,” Hipps said.

“Are we talking about things like sheetrock versus masonry?” asked board member Chad Wilson.

Steve Elliott, president of of Lewis Architects Engineers, said one example is switching from copper wiring to aluminum wiring.

“It’s unbelievable, but when copper is higher or aluminum is higher those prices vary,” Elliott said. “In the last few months, copper has gone through the roof.”

“My concern is that 20 years from now we will have a whole new group of people saying ‘If those idiots would have done it right we wouldn’t be sitting here today,’ ” said Hipps.

“Is it still a problem of lugs coming loose and breakers and all that?” asked Wilson. “Aluminum is notorious for having problems.”

“Twenty years ago, we would not have done it because of that reason,” Elliott said. “It’s totally changed, and we can now do it without any problems. In the last year, we’ve changed to aluminum at almost every building we’ve worked on.”

Elliott said Lewis Architects and Nabholz feel as if they did not change anything that the district would regret 10 years from now.

Rising costs

The rising cost of materials is one of the reasons bid prices were higher than expected, he said.

“Besides the cost of materials going up, the market is booming,” Elliott said. “Right now, you still have bidders. When you have five electricians bidding, that’s what makes you a good price. When you get one or two bidding, your price will go up. My last four or five jobs have all been up because of how busy everyone is and material costs.”

Gattis said Nabholz was requesting the board approve the middle school cafeteria contract for $3,086,846 and six bid packages for the high school for a total of $8,222,233: earthwork, steel supply, electric, plumbing, concrete and food services.

“There are major tariffs happening on steel right now,” Gattis said. “It’s not going to get better.”

“We’ve got a good price on that,” Elliott said, “so we hate to let that go.”

“The food service vendors have given us tremendous voluntary deductions by changing brands,” Gattis said, “and they’re still getting you two excellent kitchens on the middle school and high school.”

In order to meet construction deadlines, he said it was important for Nabholz to get started on the middle school cafeteria soon.

“We feel like the middle school cafeteria is as inexpensive as we can get it,” he said. “It’s ready to go to bid, and we’ve got big coverage and great numbers. If delivering it to you in summer of 2019 is important, then we need to get released, and we’ve got to get started.”

Hipps asked if any of the bids Nabholz wanted the board to approve were cutting square footage or switching to cheaper materials.

“For the kitchen, we looked at some different equipment,” Elliott said. “We cut money out of the kitchen by using different manufacturers. For electrical, it was aluminum wiring. They offered some voluntary alternatives. My guys looked at it and felt it was a different manufacturer for the same quality.”

Gattis said no other deductions had been offered up outside of the kitchen and aluminum wiring.

The board voted to release the middle school cafeteria and the six bid packages for the high school.

Cost-saving options

The program budget summary also listed VE options for the board to consider as cost-saving measures. These include replacing exterior insulation finishing system (EIFS) with pre-engineered metal building (PEMB) wall panels for an estimated saving of $54,991, omitting the canopy for an estimated saving of $26,173 and omitting Storefront B, a door from student dining to the corridor, for an estimated saving of $4,632 at the middle school cafeteria and omitting all upper cabinets and display cases at the high school for an estimated saving of $30,308.

Gattis said they could also reduce square footage at the high school by 7,940 square feet and reduce the square footage of the performing arts center by 1,400 square feet. He said the potential savings could be about $1 million, leaving the district about $158,873 over budget.

Elliott said the POR is key with state funding because the Arkansas Department of Education (ADE) requires a certain amount of square footage per classroom based on the number of students in the district for any new building projects.

“We cannot vary that in any way,” he said. “All those are locked into square footages, and we can’t get under those without you potentially losing your funding from the state.”

He said Lewis Architects and Nabholz looked at areas with extra square footage that could be reduced while still meeting the POR.

“We felt like we could reduce 8,000 square feet in the high school without affecting the POR,” he said.

Elliott said Superintendent Owen Powell advised him not to mess with the square footage of the performing arts center if possible.

“Other than that and a couple of other areas, we are at the POR,” he said.

Powell said reducing square footage means getting rid of the student store that some of the high school teachers and administrators had wanted.

“That was above and beyond the POR, so that’s one of the things they took out,” he said. “That was quite a bit of square footage right there because it’s not required. It was a want, not a need. That’s kind of where we’re at now.”

“It’s too bad we couldn’t have gone over the wants and needs earlier,” said board member Kristi Howerton. “Some of the wants overtook the needs. If we’re going to start that now, we’re a little late in the ballgame.”

Powell said he was initially concerned about taking square footage out of the high school cafeteria, but even with the reduced square footage it will be bigger than the existing cafeteria.

“It’s still going to be way bigger than this with half as many kids,” he said. “Right now, we’re feeding over 1,000 kids. The new high school will only feed 575 students. We’ll do two lunches, so we’re talking a maximum of 275 kids in the cafeteria at one time, which never happens because many like to go to the student center or outside.”

Wilson said he fears cutting square footage will be a problem in the long term.

“If Berryville keeps growing, people are going to move here,” he said. “If you cut it to the bare minimum, taxpayers are going to be upset.”

“I don’t want to be like the K-2 building or the Bobcat Arena,” Howerton said, “where they were too small already once they were built.”

Hipps said he was open to cutting square footage on the high school cafeteria since it will still be larger than the existing one. However, he said, he did not want to cut square footage on the performing arts center.

“I want something nice for our fine arts,” he said. “We need to build that program, and these kids need the same opportunity.”

Elliott said they could remove the option of reducing square footage for the fine arts center. By law, he said, the district can only have three alternates for the project after receiving bids.

Other options

Board member Tyler Ashworth asked if the district had any other options for raising money for the project.

“Is millage the only avenue?” he asked.

“There is another option, but I don’t like it,” Powell said. “We can get a loan.”

“We just passed a millage,” Howerton said. “Let’s not say ‘Let’s get a loan.’ There are other ways to get closer.”

Powell said they could also take money out of the operating budget, such as the $100,000 set aside to buy a new bus this year.

“We can go a year without buying a bus,” he said. “There are options in this year’s budget.”

Hipps asked about the building fund, noting that the district has put almost $1 million in the building fund at the end of each school year.

“This year, I have $250,000 budgeted to go in the building fund,” Powell said. “The last two years, we’ve done extremely well with the budget, and right now we’re on track to do extremely well. But I can’t tell you the exact amount we’re going to put in there at the end of the year because I can’t predict if another air-conditioning unit goes down and we have to spend $25,000 or a bus goes down and we have to spend $10,000 to rebuild the motor.”

Board member LeeAnn Ashford said she thought square footage reduction would be an easy fix to save money.

Board member Travis Gregory said he thought getting a loan would be better than reducing square footage on the project.

“We’d have a lot easier time explaining why we had to get a $1.2 million loan,” he said, “because from the time we came up with the projected project cost to the time when we actually got started building materials increased by 40 percent.”

He continued, “It’s a lot easier having to explain why we got a loan than it would be trying to explain why we short-cut everything.”

“That’s true as long as you don’t drive by the sports complex,” Howerton said.

“I’m not apologizing for that sports complex,” Gregory said.

He said the only reason the district had to build it is because local residents did not want to tear the old high school down.

“When people have a problem with that sports complex, point to this building right here because this is why we have that complex,” Gregory said. “We could have built the school right here and saved a ton of money and wouldn’t have had to worry about the sports complex.”

“With the kind of sports complex we just built, if we short-cut this school,” Hipps said, “we’re all going to be run out of town on a rail. We have to find a way to get the taxpayers what we promised them.”

Gattis said the district got a great deal on the sports complex.

“Some bidders came in really inexpensive,” he said. “You couldn’t have bought it any cheaper.”

Wilson told Gattis he would like to see a list of the proposed reductions for the project.

“I want to see a list of possible options for how we can come up with $1.2 million or a good chunk of it, even if it involves getting a loan,” Hipps said.

Powell said a loan or taking money from the operating budget is the only option.

Elliott said the engineers would meet Thursday, Oct. 4, to start potential redraws to reduce the square footage.

The board’s next regular meeting is scheduled for 6 p.m. Monday, Oct. 15, in the Intermediate Cafetorium.

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