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HomeMy WebLinkAbout2002-12-23 Finance Committee MinutesFinance Committee Meeting December 23, 2002 The meeting convened at 7:00 p.m. in the Town Hall Conference Room, 16 Lowell Street, Reading, Massachusetts. Present were Chairman Catherine Martin, Vice Chairman Dick McDonald, FinCom Members Jim Francis, Karen Epstein, Mary Grimmer, Robert LeLacheur, Chuck Robinson, Randy Mason and Andrew Grimes. Also present were Superintendent of Schools Dr. Harry Harutunian, Town Manager Peter Hechenbleikner and the following list of interested parties: Warren Cochrane, Russ Graham, Richard Radville, Dennis LaCroix, William Carroll, Sid Bowen, Peter Dahl, Tim Twomey, Jeffrey Struble, Linda and Gary Phillips, Alex McRae, Nadine Wandzilak from the Advocate and Dennis Anderson from the Chronicle. The purpose of the meeting is to review the Warrant for the January 13, 2003 Special Town Meeting. The timing. is such that FinCom needs to take action this : evening in order for their recommendations to be included in the Warrant Report. The. Town Manager reviewed Article 3 which is an amendment to the Capital Improvements Program. On motion by Francis seconded by McDonald the Finance Committee voted to recommend the subiect matter of Article 3 as presented by a vote of 9-0-0 School Building Committee Chairman Russ Graham reviewed the proposed High School project. Karen Epstein asked what drives the $4 million in cost over and above what would be reimbursable under SBA. Sid Bowen from Flansburg Associates noted that SBA allows a certain dollar per square foot of construction and that amount is not realistic. The program for the project cannot be accomplished within what SBA will reimburse. For example, the Ipswich High School was built in 1997 at a cost of $145 per square foot but the State reimbursement was $130 per square foot. New construction is reimbursed by SBA at $160 per square foot and renovation at $140 per square foot. The projected cost for this project will be $200 per square foot. Jim Francis asked what would happen if the project is approved but SBA does not reimburse what we are expecting. Mr. Bowen noted that before construction, the Town will have a letter indicating approval and the reimbursement rate for the project. Dick McDonald asked whether these are firm estimates. Mr. Bowen noted that last week they gave the project to an independent cost estimator to estimate the cost at the schematic level. The budget includes a 10% design contingency which means that if between now and final bidding there are changes in the design, that should be made up with that 10%. The cost estimates will be available on 1/8/03 before Town Meeting. Dick McDonald noted that he thinks it would be desirable to get the project cost down to $50 million. Mr. Bowen noted that the only way to do that is to cut the program. Finance Committee Meeting - December 23, 2002 - Page 2 Jim Francis asked Mr. Bowen if he ever got statistics as to the accuracy of the cost estimates. Mr. Bowen noted that there are three levels of cost estimates at schematic design (where we are currently), at design and as contract documents are prepared. Historically, cost estimates have been within 1% - 2% at the contract document stage. At that point, the design contingency would be eliminated. He feels comfortable that the current cost estimate is within 10%. Finance Committee Chairman Catherine Martin asked about the design initially the connector between the building and the Field House was not feasible. Why is it now feasible. Mr. Bowen noted that previously, the connector was 2%z times as long and connected at two levels. This is a much simpler and smaller connector. Mary Grimmer asked if we were currently renting space at the High School. Dr. Harutunian noted that the only group not directly connected with the High School program is the Superintendent's Office. The new project will be 273,000 square feet versus the 350,000. It will be less expensive to operate and maintain. The proposed project also has the shortest duration of construction and the easiest staging. Currently, 60% of the space at Reading Memorial High School is utilized directly for school purposes and that will increase to 80+%. The only other known High School students in the facility will be the RISE Program. Andrew Grimes agreed that the Town can't afford to do a project that does not get State reimbursement. Mr. Bowen reiterated that the State reimbursement rate is not an accurate representation of the actual cost. There was additional discussion about the synthetic playing fields. The reconstruction of the football field and the practice field would each cost $650,000 for the synthetic playing surface versus $450,000 if it was done in a conventional manner. With the synthetic surface, there is no fertilizer, herbicides or pesticides; the fields can be used 24 hours a day seven days a week; play can take place right after a rain storm; there is low maintenance; the useful life is 10 years and then the replacement cost is about $200,000 to secure another 10 years of life; it "pays for itself' after seven years. Dick McDonald noted that the Parker Middle School renovations included a first class field and the soccer football field is used for only five games per year. The soccer field at Parker Middle School is used constantly. The artificial turf is "nice to have" but not essential. He suggested that the School Building Committee not cut back on the main parts of the building but cut back on some of the "non-essentials." He also noted that the Police Station had very low contingency and very low change orders. Mr. Bowen noted that the contingency is standard in the cost estimate. Dick McDonald suggested that some other way be used to get more money to do the fields. Dr. Harutunian noted that there were two new programs in the School Department lacrosse programs that will place additional demands on fields. Catherine Martin asked how many companies are manufacturing the artificial turf will we be tied into a single source situation. It was noted that there are at least three competing companies now doing this. Dr. Harutunian noted that there are less injuries on the artificial turf, and Robert LeLacheur suggested that the School Department get information on injury data. Finance Committee Meeting - December 23, 2002 - Page 3 Andrew Grimes asked where we were in the approval process. Dr. Harutunian noted that we've gotten back an initial response that Option 3 is viable. It was due to be officially filed with the SBA on December 1st but we will not get back an official response until February. Preliminarily, all three options have been said to be acceptable. Robert LeLacheur asked about the funding preference for renovations. Mr. Bowen noted that there is 5% more reimbursement for renovation. The "mixed rate" of reimbursement for the project as proposed is 58%. SBA actually suggested that a new Auditorium should be built rather than trying to renovate the old Auditorium. It would result in a cheaper and better project. Robert LeLacheur asked about the reduction of the building from 350,000 square feet to 270,000 square feet and the increase in occupancy from 60% - 80%. He asked about the High School enrollment projections. Dr. Harutunian noted that the building was designed for just under 1400 students. There are now 1261 students in the High School. Robert LeLacheur asked for a breakdown of the type of space by core, classroom, etc. He asked where we are losing space. It was noted that the corridors and stairways will be much less in the new project. Karen Epstein asked for a chart reconciling the new construction and renovation rates in the amounts being rehabed. Mr. Bowen noted that the current cost estimate is $53.9 million. If the estimate comes in differently, then FinCom could reconsider their recommendation. Linda Phillips of 42 Willow Street asked questions about the SBA application and its timing, and quoted Page 1 of the application. She also questioned the schedule. Karen Epstein asked for the best estimate on the time table for construction. Mr. Bowen noted that architectural work will begin in the Spring of '03. Bids for construction would be done in the Spring of '04. Occupancy of the new areas would be in '06. Demolition of the old parts would then take place. Chuck Robinson asked about the fields not being reimbursable. Mr. Bowen stated that they have never done a project where field and site work were not reimbursed as long as it is within and on the same site. Gary Phillips of 42 Willow Street asked if FinCom will be voting on each Article. He stated that FinCom is suppose to be guarding the Town Treasury. He doesn't see that we have the money to do this project as proposed. The High School is important to the Town. He would hope that we would have a more affordable project or project that could be phased in over 10-15 years. This might be done even without State aid. This is a Cadillac approach. We would have a long wait until we receive any State aid. Jim Francis indicated that he thought the appropriate thing to do is to put this in the hands of the voters to decide. Finance Committee Meeting - December 23, 2002 - Page 4 Dick McDonald indicated that a piece renovation would cost more and we would not have as efficient of a building. He felt that it should be moved forward to let the voters decide. Richard Radville noted that the so-called "$35 million option" would have cost way more - probably in the $45 million range and would not accomplish as much as this proposed project. Russ Graham noted that Strovlasky and Hoyt did not recommend a lesser option. The School Building Committee's role is to give Town Meeting a recommendation as to how to address the problem. Town Meeting has the authority to approve or not approve that. On motion by Francis seconded by Grimmer, the Finance Committee voted to recommend the subject matter of Article 5 as presented by a vote of 9-0-0. Russ Graham expressed appreciation to Andrew Grimes who served as liaison from FinCom to the school building project. Dr. Harutunian presented the background on Article 6. Chuck Robinson asked if the High School and this project would be two separate questions on the ballot and it was noted that it would. Jim Francis asked what happens if the ballot question on Article 6 fails. Dr. Harutunian noted - that he will meet with the School Committee but would suggest that we try again until the project is successful. Pete Dahl noted that we would need to try again because this is a 66% reimbursement project along with the Barrows' project. It is critical to preserve that funding rate. Jim Francis asked if the project could be done without a debt exclusion. The Town Manager noted that the Town could not afford it - it would require an increase of about $500,000 per year in debt service. FinCom's policy is to seek debt exclusions on any projects of this magnitude. Bob LeLacheur asked about how sure we are on the cost estimate. Mr. Bowen noted that it had been bid once and the project came in about $1.5 million over budget. There has been some inflation since that time. Mr. Bowen also noted that once the State approves the money for the project which is probably two to three years away, the Town has one year to break ground. Andrew Grimes asked if we could consider a debt exclusion for the existing debt on this project. Linda Phillips noted that the SBA process because of category A and B projects, has lost ground on projects like this - they are not advancing. She felt that the Barrows' project has nothing to do with this project - that they are completely separate. She also noted that the administration of the School Department has tried to put the projects together. If Barrows was expanded as a project, we could avoid doing this project. Finance Committee Meeting - December 23. 2002 - Page 5 Dr. Harutunian reviewed a letter from Brad Jones. The SBA has indicated that we can do the Barrows and new school project in any order that we want but both have to be done. Mr. Bowen noted that the categories A and B are different, and there is no affect on these projects. Andrew Grimes noted that he had called SBA and reiterated what the Superintendent has just told the FinCom. Linda Phillips felt that we should get all of the facts on these projects. On motion by McDonald seconded by Mason, the Finance Committee voted to recommend the subject matter of Article 6 as presented by a vote of 9-0-0. The Finance Committee reviewed Article 4 - debt authorization for the PWED grant. On motion by Grimmer seconded by McDonald, the Finance Committee voted to recommend the subject matter of Article 4 as presented by a vote of 9-0-0. Article 7 would add $13,500 to the budget for a Special Election if Articles 5 and or 6 are approved at Town Meeting. The source of funding would be from free cash. On motion by Grimmer seconded by Francis, the Finance Committee recommended the subject of Article 7 as presented by a vote of 9-0-0. On motion by Grimes seconded by Francis, the Finance Committee voted to adjourn their ( 1 meeting of December 23, 2002 at 8:50 p.m. by a vote of 9-0-0. R s ctfu y miffed, Secretary r-.3 O W M > CD:; o::!-:~ M w aM c~ m -0 3rn Duo N , :O