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High bids put high school additions at risk

Posted 5/03/16 (Tue)

By Jody Michael
Divide County School Board members have agreed to considerably watered-down HVAC upgrades after subcontracting bids came in at double the estimated cost.
“It’s extremely disheartening to see this,” Board Member Melissa Nystuen said. 
“Now we have to tell people, ‘We showed you a video of how uncomfortable our classrooms are, but we can only afford to do the mechanical work, and we don’t know why,’” said Nystuen.
The price for replacing each school building’s heating and ventilation system -- with the addition of a geothermal energy field, backup electric boilers and air conditioning -- has soared to almost $6.8 million despite an initial estimate of $3.4 million.
An evaluation of the bids found that the geothermal costs were in line with their estimate, but the other mechanical work, estimated at $23 per square foot based on Grenora’s 2015 school project, is now going for an astronomical $58 per square foot.
After three-and-a-half hours of discussion and deliberation at a special meeting Thursday morning, the board decided to reject bids for the high school and accept an elementary school project with cost reductions.
The primary savings will come from forgoing, at least for now, the addition of geothermal heat. Instead, the proposed backup electric boilers will now become the primary heat source.
Mowbray and Son of Minot was the low bidder for the HVAC work.
The board also voted Thursday to begin design of the additions to the elementary building, with the aim to break ground this fall.
But many of the proposed additions at the high school, which include a few classrooms, are also now at risk, although some board members questioned whether they should make the reductions equal in both the elementary and high schools instead of entirely from one.
No answers
The board was unanimous in its great frustration, to put it mildly, with this dilemma, and that it is at the mercy of subcontractors who are under no obligation to explain why their prices have increased so greatly.
“We feel taken advantage of up here,” Board Member Stephanie Reistad said. “The cost has gone up in other parts of the state too, but it hasn’t doubled.”
Sean Sugden of EAPC, the firm that prepared the initial cost estimates, said the discrepancy shocked him as well.
“We’ve been working with you guys for two years now, so it’s certainly not our intent to come up here with a number that means you can’t do anything,” he said.
EAPC largely based its HVAC cost estimate on similar work the firm did with the Grenora School last year, Sugden said.
“All the work came in at $23 a square foot,” Sugden said. “We felt we were pretty secure with this number.”
That was the cost for Grenora, as part of its school expansion, to completely gut and replace its HVAC system -- work that will now cost Divide County $58 per square foot.
“The numbers we got for Grenora are real numbers, not estimates,” Sugden said. “The only difference we can see is just the market value of the work.”
This explanation did not comfort the board.
“I just want something that slaps me in the face and says, “Here it is, here’s what the $4 million difference is,’” Board Member Holly Krecklau said.
“I’m not looking for someone to blame,” Reistad said. “I’m just looking for this to make sense.”
Adjusting the plan
Pouring $6.8 million into HVAC would leave just $3.1 million for other renovations and additions out of the $9.9 million voters approved in February.
Omitting the geothermal fields will save more than $500,000, but since geothermal’s appeal is in the lower yearly costs, which would save more money in the long run, some board members said they would still like to find a way to fund a geothermal system in the future.
The board also voted to shave at least a few hundred thousand dollars by deleting nonessential items like energy recovery units, air handlers and additional rooftop HVAC units from each building.
Since the savings are more significant in the high school, Matt Lierz of construction contractor FCI said he recommended rebidding the high school work next year in hopes the rate will come down.
But heating upgrades in the elementary school will continue as planned.
“When you look at the elementary school, I feel like there’s not as much fat to cut,” Lierz said. “Maybe we could gain a little bit to rebid it, but I think we’d be taking a chance there.”
Some board members were afraid to completely hold off on everything until next year in case those bids just get worse.
“If we put this off another year, what do they do?” Board Member Steve Feil asked. “Do they add another 30 percent to the Bakken surcharge?”