School construction project costs increasing

Sat, 08/13/2022 - 2:00pm
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The Chair of the School Committee sought advice from the Town Council on how to handle an unexpected cost increase in its planned school renovation project at the council’s meeting on August 1. School Chair Jessica Willi said she wished to take the opportunity to inform both the Town Council and the public about the funding shortfall from the Rhode Island Department of Education and that the school did not want to proceed with the project without being absolutely transparent about the situation.
In a prepared memo for the meeting, it says: “RIDE expects the Block Island School Committee to sign two Memorandum of Agreements (MOAs) setting the parameter that RIDE SBA will only reimburse up to 45 percent of $9,056,722.”
The project has been estimated at $10,400,000 and includes repairing the building envelope around the gymnasium, the HVAC system for the building, and “education enhancements.” The gym has been leaking for some time, and the inside is water-stained and interior padding has slumped down.
Normally, Willi said, RIDE would reimburse the town for 35 percent of a project, but with the educational enhancements, the rate would increase to 45 percent.
“RIDE said ‘if you hit these key points, you get 45 percent back,’” said Willi, and that the amount that RIDE approved for the project, and therefore eligible for the 45 percent reimbursement, was reduced to $9,056,722.
The difference? The Block Island factor. “We built into the costs the Block Island factor,” Willi explained. “RIDE doesn’t really believe in the Block Island Factor, so [RIDE said] ‘we’ll give you 15 percent.’ We built in 30 percent.” If
the educational enhancements were simply removed from the project to get the cost down, the reimbursement rate would have fallen to 35 percent for the rest of the project.
The difference in the amount of the Block Island Factor will mean taxpayers will have to fund an additional $604,475, plus interest, on the bonds issued to finance the project. RIDE reimburses the town for the project over the course of the bonds, including both principal and interest.
After some discussion and a few math lessons, Town Manager Maryanne Crawford said: “Even at the $10,400,000 I have some concerns. You don’t know until the bids come back.” She added that the current inflation could also change things going forward. “I want everyone to know what we’re getting ourselves into.”
“This is money we need to spend,” said Councilor Keith Stover. “We want to be able to look taxpayers in the face and say that this process, on both the town and the school board’s side was airtight.”
Crawford said: “This does get tighter as we go along,” meaning that once the project is put out to bid, more solid cost estimates will come in. She also said there would be some “value-added engineering” to see where other reductions might be realized.
“It’s not an existential question of whether or not we should do this project. But it is a wake-up call about what RIDE did and the marketplace,” said Stover.
“All we know is the gym is leaking and the air is bad in our school,” said Willi.
“Once they sign it, we’re obligated” to finish the project, said Crawford.
“We’re looking for your advice on what to do,” Willi told the Town Council.
“If we don’t sign this, we have to start the process all over,” said Crawford of the agreement with the state for the building project.
“For what it’s worth, I think [the school] should sign [the agreement], said Stover. “It’s not a Cadillac – it’s stuff we need to do. Go to the gym and go down to the basement,” he advised if anybody had doubts about the condition of the building.