060918-adh-nws-SA Fencing-my (copy)

Bond-related work at South Albany High School will cost more than expected, but will move forward as designed for now, the Albany School Board decided Monday.

Bond-related work at South Albany High School will cost more than expected, but will move forward as designed for now, the Albany School Board decided this week.

Gerding Builders is the construction manager/general manager for work at South Albany, which includes campus fencing, renovated restrooms, upgrades to the school's theater and surrounding spaces, addition of a multipurpose gym space, and expansions and improvements to vocational labs.

The budget for the work was $10.8 million, but bids from subcontractors came in at $2.4 million above that. Board members spent an earlier work session discussing ways to get around the shortfall, but in the end voted unanimously to award a guaranteed maximum price contract to Gerding in an amount not to exceed $13,175,409.

Work at South had been scheduled to begin this summer, but board members postponed a vote on contracts several months ago because bids also came in high at that time. They postponed action in hopes prices would drop.

Russ Allen, the district's director of business, said following the meeting the district had felt relatively confident in its earlier estimate because bids for two other major projects — the building of the new elementary school, Meadow Ridge, and the reconstruction of Oak Grove Elementary School — came in at or below expectations.

Construction costs have gone up in the time since the other two projects began, however. "It's a supply and demand question, and we are on the wrong side of the curve," Allen said. 

West Albany High School, which will undergo the first phase of a total reconstruction starting next year, is also over budget by about $8.6 million. That figure also could rise, board members learned Monday, but that won't be known until bids come in late next month.

Board members did not make any decisions at their Monday meeting on how to cover the deficit at either high school. Options include reducing the scope of the work, using some $5 million in bond interest money, pulling $1 million to $2 million from the district's Construction Excise Tax fund, selling the remaining $6.9 million in general obligation funds, diverting $1 million in state career-technical education funds, cutting back on the number of other upgrades and repairs districtwide, and depending on as-yet-unknown savings from other bond projects.

David McKay of HMK Co., program manager for work being completed through Albany's $159 million bond measure, said board members have final authority on what will be done at South Albany, but few changes can be made at this point without essentially having to start over.

McKay said Gerding had told the district it would hold its price for 30 days from the date the bids came in, which was Nov. 13. That timeline expires this week.

Changes could be made to the scope of the work, such as eliminating the second gym or the two expanded vocational classrooms, but those projects affect other projects and would complicate the bid as received. "We won't get our best value," McKay said. 

Allen agreed. "If we can't award tonight, we'll have to rebid South Albany at some point, and we're fairly confident the number would come in higher than what we have now," he said.

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