Mount Greylock Building Project Continues to See Favorable Bid Numbers
Owner's project manager Trip Elmore, left, and Hugh Daley discussed the ramifications of the cost savings realized in the project to date.
The district's owner's project manager reported that as of now, the construction budget is running about half-million dollars below the budget agreed to with the Massachusetts School Building Authority.
But there still a lot of costs out there to be determined, and even if that underage holds up, it does not mean any money will be "going back" to the regional school district's member towns.
It could, however, mean that the district would need to borrow less for a "cleanup" bond at the end of the project, which would lower the "mortgage" for the $64 million addition-renovation project.
"The bottom line is that right now, even adding some things in, we're coming in under," Trip Elmore of Dore & Whittier Management Partners, the owner's project manager, told the committee. "I will caution: Some of the things we have put back into play, like site work, are not going to be reimbursable items. I'm not sure how that affects the reimbursement rate, but on the global budget, we're coming in roughly $500,000 under that number."
The MSBA would not reimburse the district if the School Building Committee adds items like the parking lot and a modest outdoor amphitheater back into the project, as it took steps to do last month. The advantage of bringing those elements back into the project is that they could be built using money the district already has borrowed at a 2.96 percent interest rate.
Everyone associated with the project agrees that the parking lot sorely needs resurfacing, and it originally was part of the scope of the project. The building committee voted last year to drop it from the addition/renovation in order to lower the total cost.
The School Committee had been moving ahead with a plan to use part of a $5 million gift from Williams College to address the pavement issue. But the School Building Committee Thursday evening asked its architect develop drawings and specifications for a new 200-space lot that could be built as part of the building project itself, assuming no unforeseen cost overruns.
In addition to not knowing how added spending will affect the reimbursement from the MSBA, the project's base reimbursement will not be known until the work is done, if for no other reason than the fact that the project is aiming for LEED Silver certification. If it hits that "green building" mark, there is addition reimbursement available from the commonwealth's school building authority, but certifications are not awarded until projects are completed.
The other "bottom line" from Elmore is that the district really will not know the total out-of-pocket cost of the project for some time.
"At 95 percent of the way through, the MSBA stops reimbursing the last 5 percent," he said. "They make the burden of the last 5 percent a burden on the local share — temporarily. This is where you get short-term bonding for 12 months.
"Twelve months later, you close out with MSBA, and they give you the final reimbursement, which pays the short-term note. Then you will know your final cost. You won't know the final cost of the project until probably a year after you're in the building."
Elmore said the district will have three rounds of borrowing for the project: the initial bond, which was the largest chunk, the short-term borrowing and the close-out bond, after the final cost to the district is known.
The final piece, the close-out bond, could be smaller than anticipated if bids continue to come in favorably, SBC members said.
The district has told member towns Williamstown and Lanesborough to expect anywhere up to $4 million to be borrowed under the close-out bond. If that number comes in lower, the annual cost of the 30-year bond will be reduced.
"Right now, our stabilized debt service is $1.8 million to the towns," said Williamstown Selectman Hugh Daley, who serves on the School Building Committee's finance working group.
At the time of the bond exclusion vote, the School Building Committee estimated the final debt service cost split between the towns would settle at between $2 million and $2.2 million, after the close-out bond at the end of the project.
"If we only have to pull $2 million more [for the close-out bond], it could take $100,000 off that debt service," Daley said.
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