With construction ahead of schedule, the school's project architects and building consultants believe a first-rate addition will be completed on budget, despite the recent discovery of an accounting error that made the project's budget even tighter.A project report to the school board on Tuesday, Aug. 29, started with the ahead-of-schedule progress in construction. While it hasn't been great weather for farming this summer, it has been perfect for masonry, which has put construction ahead of schedule.
The budget is a different story. Construction manager Kevin Becker and architect Tory Miller reported that miscommunication led them to assume that the school district had paid the fees for levying the bonds with other funds. So, since the start of the project, they have assumed $3.4 million was available for construction, but an extra $83,000 in expenses needs to be subtracted.
The school board also intends to install air conditioning in the new addition, at a cost of $75,000. These two expenses leave the project $157,000 over budget.
"In plain English," school board member Deb Glenz asked Becker at one point during the budget briefing, "are we $150,000 short?"
The school is at this point, Becker said, in a worst-case scenario.
Board chairman Pat Flanders wasn't willing to accept an $83,000 accounting error as a "miscommunication." "I'm sorry," he said, "that's a little hard for me to swallow."
Flanders called it a "pretty amazing, obvious error,"Êand Becker told the board that "we're certainly not proud of it."
Flanders told the professionals that he thought their companies should help make up that difference if the project does not get back on budget. Becker said that was not fair, but both he and Miller sounded optimistic that the project would still be completed on budget.
"I know the numbers look big on paper, but they're not insurmountable," Miller told the board.
The project started on a tight budget, according to Miller. "This just makes it a whole lot tighter. Without that, we're sitting great,"Êhe said.
Through hard work in maintaining the construction schedule and keeping expenses down, Miller said the project was delivering more building than was budgeted for. His message to the board was: "It's a great project. It's more than we expected. We're going to get it done for your community."
Flanders agreed that construction was going well, but also noted that the window of opportunity to get the project back on budget was getting smaller as things progressed. And he warned that if things didn't get back on track, he would bring up the issue of who pays for the $83,000 again.
The school board could also look again at some items that could be cut to save money: like display cases in the lobby and the type of partitions in the new bathrooms. These decisions, Miller said, don't need to be made for a couple months.
Getting back on budget
The school's construction fund still has money in it. In addition to money for bricks and mortar, they still have $42,000 in contingency funds, $70,000 for construction support, $75,000 for fitness equipment, and $260,000 in professional fees.
The best solution for getting the project done on budget is for construction to continue to go smoothly.
Obviously, if things go as planned and no change orders are needed from the contingency fund, that money will be left when the project is done. So far, the biggest amounts of contingency money have been used to build better tennis courts ($20,000) and to build a drainfield to get moisture out of the school basement ($7,000).
The construction support money is meant to pay for things to keep construction going in the winter. As the weather gets colder, masonry becomes more difficult.
Becker told the board that they were pricing propane last week, which will be needed to provide heat this winter. How long the weather holds, how much work can be done this fall, and how cold it is this winter will affect the amount spent on propane. Miller said he was praying for the weather to stay warm this fall, which it did a year ago.
Construction goes well
So far, the construction has gone extremely well, on-site supervisor Steve DiLallo reported to the board before the budget discussion.
He said the below-ground masonry was 95 percent done and the above-ground masonry was 50 percent done. The plumbing is all done, only eight percent of the footings are left, and only 12 percent of the slabs are left to pour. "There are a lot of things we're way ahead of schedule on," he said.
For safety as school starts, a perimeter fence has been installed around the work area. Lights were set up last week in the project area.
In the basement, DiLallo said work was almost done, and the few remaining items would not affect any students.
Later, Miller said the contractors have been great and that work was sailing. The masons fixed the exterior wall of the high school gymnasium at not cost because things were going so smoothly, Miller reported. "The emphasis has not always been on the budget,"ÊBecker told the board. "The emphasis has been on doing a quality project."
"Let's keep it ahead of schedule," Flanders urged, "and save some money on construction support."
Saving $40,000 in the contingency fund and $60,000 from construction support would go a long way to erasing the current budget problem.
Extra revenue
On top of that, the school district is still looking for extra revenue sources.
At the board meeting, the budget projections called for the project to cost $3.642 million to complete. With the bond levy fees excluded, the school has $3.316 million from the bonds.
From the bond money, the district expects to earn at least $120,000 in interest income. Rising interest rates help, but getting the project done quickly doesn't.
The district also is utilizing two additional levies.
The first is for health and safety items. Work to alleviate the moisture problems in the high school basement and locker rooms qualifies for this. So far, the board has approved $68,000 for this levy. Becker and Miller reported last week that an additional $10,000 could be submitted to the state in this levy.
The state does provide matching funding for this levy.
The other levy is for compliance with the American with Disabilities Act. The cost for installing an elevator shaft ($25,000) can be recovered with this levy.
The school district has also received $20,250 in donations towards the project. An anonymous $20,000 donation was given towards the sound system and lighting in the auditorium, and $250 was given for equipment in the fitness center by Community First National Bank.
Superintendent Howard Caldwell said donations are appreciated, but the district can't promise to spend the money in a particular way. "We would certainly make every attempt to accommodate (a donor's) request," he said.
Other business
•The board approved two-year contracts with its building principals: John Janotta at the high school; Deb Gillman at the middle school; and Todd Burlingame at the elementary school. Their raises ranged from almost five percent to over six percent in the first year. In the second year, each got a raise of over four percent.
•The board approved an agreement with the Stearns County Collaborative for a chemical dependency consultant from the St. Cloud Hospital for the next school year. At no expense to the district, this consultant will spend one day a week in the school system.
Janotta helped select the consultant who will be coming to Paynesville, and Caldwell told the board that the consultant's experience and credentials were impressive.
Students can be referred to the consultant by other students, parents, staff, administration, or seek help themselves. The consultant could also help in cases of Minnesota State High School League violations.
•Caldwell informed the board that the school district has been warned about the Equal Employment Opportunity Com-mission (EEOC), which has initiated age discrimination lawsuits against some school districts for sliding pay scales on early retirement. At the advice of the state, for more than a decade the school offered diminishing bonuses to take early retirement to teachers once they reached the age of 55.
One potential remedy might be to make up the difference to teachers who got a diminished amount as a result. According to Caldwell's estimates, this could amount to $50,000.
The offending clause, which also caused tax problems to the recipients, was taken out of the teacher's contracts when negotiations were done a year ago.
•The board approved hiring Jill Lahr for two hours per day as an instructional assistant, and Jeanne Heineman and Gloria Dahlke for three hours per day as food service workers.
•The board terminated the services of Hilary Larson, Gail Rooney, and Margaret Weber, all instructional assistants, and Beverly Stowell, special education driver, because the specific students they worked with no longer need their service.
•The board approved Schedule "D" or sixth class assignments for the upcoming school year: Darrel Carstens (full year); James Hahn (full year); Todd Knudsvig (half year).
•The board approved six weeks of maternity leave for elementary music teacher Charlene Strand, starting in October.