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School construction will require more than bonds

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Carroll looks at cost of Phase III school projects, which will require more than the $15 million in construction bonds.

By Christopher Brooke, Reporter

CLICK ON THE LINK AT THE END OF THE STORY TO READ THE FINANCIAL TEAM'S DOCUMENTS ABOUT THE SCOPE OF THE PHASE III PROJECTS

HILLSVILLE — The construction bid climate remains favorable, but $15 million in bonds won't cover all the work that needs doing at two Carroll County schools, officials discussed at Friday's Phase III Financial Team meeting.
The Qualified School Construction Bonds remain the best deal going — especially since the federal budget impasse probably means that Rural Development won't see any large influx of funds for school projects until the fall.
Pinnacle Architects' Randy Baker said no one knows how the construction market will be six months from now with everything going on in the world — other school projects in the state moving ahead, rebuilding in Japan after the earthquake and even rising gas prices could all make construction prices spike.
Schools Superintendent Greg Smith shared the award of the $15 million in bonds for the projects at the Carroll County high and intermediate schools with the group that included members of the county board and school board, Assistant Administrator Nikki Shank, bond counsel Carolyn Perry and Rural Development's Travis Jackson.
Part of the meeting agenda involved sharing some numbers on construction cost and debt repayment, which the county supervisors had expressed interest in their March 14 meeting.
"Dr. Smith brought you good news," Baker said. "I'll bring you the reality — $15 million is great, but it's not enough to complete the project."
He broke the cost out by base bid and the alternate options for the two projects.
At the high school, the base bid includes the work to build the new wing to house ninth graders, a new administrative and media wing and a new baseball field to replace the one where the 9th grade wing will go. Baker estimated that those elements could cost an estimated $8.1 million.
The alternates — which could be picked from like a menu, depending on project costs — include:
• building the auxiliary gym
• the new automotive and horticultural building and the dining room expansion
• adding to the field house
• replacing water lines, toilets, ductwork for the heating and cooling systems; light fixtures
• refurbishing the auditorium seating
• replacing existing locker room, shower fixtures
• replacing a freezer
• installing a new intercom system with handsets.
Just the expansion of the cafeteria and the new auto and horticulture building could cost about $2 million, Baker said.
The thought behind the auxiliary gym is that the existing gym isn't big enough for 300 new students at the high school, the architects noted. All ninth graders are required to take physical education classes.
At the intermediate school, which will become a true middle school for grades 6-8, has a new classroom wing, media center and administration area in its base bid.
Baker said the base bid is projected at between $4.7 and $5 million.
Plus, there are alternate items like replacing existing bleachers, refurbishing lockers, new baseball and softball fields and concessions, a new fire alarm system and an new intercomm system.
These alternates will give the school board some options on their construction projects, Baker said. Some of them the schools could tackle as a maintenance effort.
Many pressures could drive construction costs up, he noted. "The quicker you guys can go out to bid,” the better.
Shank said she thought the HVAC would have been a must since there's a lot of wear on that system.
If you put all the items into the base bid, then the project grows to $24 million, Baker said — and Carroll doesn't have that. With alternates, you can pick and choose what goes into a project.
School officials have cut this project down in scope significantly, but many of the alternatives need to be done, too, Smith said. He hoped that they could get enough funding for much of the needs and that they hadn't cut the project down to where it was "meaningless."
"I don't think the base bid is going to get us where we need to be," the superintendent said.
Baker advised against prioritizing the alternates, though, because contractors could take a gamble and bid aggressively on those.
He pointed to a recent Mount Airy, N.C., school where that was the case. "A month ago we had a project that the bid budget was $3.4, came in at $1.8 and we had alternates," Baker said. "They got everything plus."
He stressed all estimates are made to the best of their ability while reading the markets.
He'd even revised the estimates up since the last time he and Smith talked, because of the uncertainty in the world right now. Baker added more that 10 percent, boosting projected costs to $24 million. He no longer felt comfortable with the older estimate.
These bonds are a special case, and Carroll County's among the chosen few to benefit from them, Perry said. Nothing like the QSCBs are going to come along again.
"If you want to think of it as a one-time opportunity, I think that's appropriate," she said.
When the subject turned to possible funding from Rural Development, Jackson said it appears that sizable amounts of funding for community facilities projects won't be available until fall, after the federal budget impasse is worked out.
That means that the pot of funding for projects like the Carroll schools has shrunk significantly, he said. "There's no way we could do a project of this magnitude, in my opinion, this year.”
From what he's been told, it's more likely that Rural Development could supply about $1 million per project until that's straightened out. Jackson advised that if Carroll broke the school projects into two, that could mean $2 million in funding from the federal agency.
Washington is in a cutting mood right now, Jackson said.
"I know you guys have to worry about the money, but right now is the richest, ripest, friendliest time you can get," said Golding to the county supervisors present.
From what he's seen, Dickson believes the supervisors basically see the school projects as a positive, but they also have to juggle the entire county budget and the upcoming property reassessment, among other things.
What they're not ready to do on the school construction is make a decision too quickly, he said.
Supervisors' Chairman Tom Littrell indicated he was glad to see the repayment numbers supplied by the school officials.
He wondered if the school board might settle for a little less, should the funding require that.
Smith answered they wanted to look at elements of the projects critically, but also noted that on past projects the reaction he's gotten is that more items should have been taken care of.
He didn't want to do too little and face criticism that the officials should have stepped up to the plate more.
Dickson said that's like leaving the bathrooms in the elementary schools unimproved during the first phase of construction.

CLICK BELOW TO READ THE PHASE III SCHOOL CONSTRUCTION DOCUMENTS: