Town of Natick - Selectmen's Minutes

The meeting was called to order by the Chairman Charles M. Hughes at 7:00 p.m.

PRESENT: Charles M. Hughes, Paul R. McKinley, Jeffrey A. Stern, Jay H. Ball, John Ciccariello

ALSO PRESENT: Frederick C. Conley, Town Administrator; Paul E. Cohen, Deputy Town Administrator; Donna Challis, Secretary;

WARRANTS: Payroll warrants were signed by the Board of Selectmen on October 1, 2001 in the amount of $1,304,810.23. This figure was included in total warrants signed by the Board of Selectmen of $2,339,030.27.

While awaiting the arrival of Colonel Kennon from the Natick Army Labs, Mr. Hughes suggested that discussion of the second agenda item begin, but noted that upon Colonel Kennon’s arrival, he would interrupt the discussion.

SCHOOL COMMITTEE: WILSON MIDDLE SCHOOL

Representing the School Committee were the Assistant Superintendent for Fiscal Affairs James Connolly and four members of the School Committee were in the audience.

Mr. Connolly referenced a memo from the Wilson Middle School architect, Scott Dunlap of Architecture Involution 3 analyzing the bid, the process followed in estimating and the general process followed. He noted that Mr. Dunlap was present and would review the documents followed by questions. Then the School Committee will request a special town meeting for the end of October. If Town Meeting were to approve an additional appropriation, it would allow the schools to enter into a contract within 30 days with the general contractor.

Scott Dunlap of Architecture Involution 3 advised that the general contract bids for the Wilson project were received on September 25, 2001. The lowest of the six bids received was from J&J Contractors in the amount of $20,957,000 and the highest was from Peabody Construction in the amount of $22,345,000. Although he was disappointed in the bid amount, the bid opening represented what was determined as an ideal bid in that six general contract bids were received. That number was probably on the high side in the current environment. He believed the bids reflected the current environment in school construction. All these contractors specialized in school construction.

Mr. Dunlap then reviewed the history on the cost estimating of the project. He noted that the Wilson School was a little unusual because the building committee insisted on including three cost estimates in order to insure that if the project moved forward that the project was

on target. An additional 4th cost estimate was added at the building committee’s request and AI3 added a 5th estimate just prior to going out to bid. Five professional estimates were done independent of AI. During the process of cost estimates, there were a number of times where the estimate indicated that the budget design was being exceeded. The building committee asked, and AI3 provided potential cost reduction measures. Those measures were reviewed and applied. Each time a cost estimate was being completed, the building committee halted design and production to allow for appropriate analysis of the cost estimate.

Mr. Dunlap noted that his summary included a brief commentary on the School Building Assistance funding because the question immediately arose (upon opening the bids). This year was an unusual year in that SBA was solicited by a number of towns who were experiencing significant inflation in the market to consider adjusting the SBA cost rates. After a series of meetings, SBA increased the funding level by 7% which results in the SBA recognizing the Wilson Middle School as having a total value of $25,569,675.

SCHOOL COMMITTEE: WILSON MIDDLE SCHOOL (contd)

Mr. Dunlap continued that if the building committee or the Town decided to pursue additional cost reductions, any further reduction would force extreme cuts to program space and quality of the building. Throughout the cost reduction and analysis there were a number of items that were identified as extreme cuts and they would be the kind of cuts that would have to be applied now to reduce the bid price.

Mr. Dunlap pointed out that if education space were reduced and the size of the building reduced, the SBA reimbursement goes down. There would also be some time for the redesign and rebidding which would delay construction start. He noted that four months ago Westford bid an elementary school project and they were 10% high. They made $2 million in cuts in the project and when the bids came back, they were essentially the same price as previously received. The prices in construction were still increasing and he felt there would be no difference in this case (in rebidding with reductions).

Mr. Dunlap reviewed the history of the cost analysis and reductions starting in September 2000 with the 100% schematic design. That cost estimate matched the target budget. In March 2001 the 100% design development cost estimate was complete and the cost estimate exceeded target by $551,979. Some significant reductions were made including the elimination of air conditioning in the classrooms, a redesign of the south and east elevations as well as the overall courtyard utilizing more economical materials. In May 2001 the 50% construction document cost estimate was complete and the cost estimate exceeded the target budget by $927,302. Additional cost reductions were accepted along with a proposed program reduction of 5,200 sf. The final estimate was done in July 2001 with 85% construction document. The cost estimate exceeded the target budget by $107,223, but it was felt that the overage could easily be absorbed by contingent funds.

As to why the general bids did not match the cost estimates, particularly in this case where it seems like all the correct procedures were followed in continuing to analyze and target the budget, Mr. Dunlap noted that it was difficult to know exactly where it exceeded the cost estimate. A general contractor was not required to

submit his detail bid. Unless a contractor voluntarily wants to pass along their detail costs, it is difficult to determine exactly where the difference was. Based on experience, he knew it had to be in five major categories of work: Site work which includes the roadways, fields, curbing, play fields, parking lot. Some of $1.5 million was probably from site work. Another was structural steel. That was about $1.4 million of the project and there must have been a discrepancy there. Other probable areas were the concrete, cabinets and woodwork.

Mr. Dunlap felt that more detail information would be known depending on what transpires in the next few weeks. Contractors at this point were reluctant to release details because they don’t know the situation and whether it will be rebid.

Mr. Ball noted that the question was raised whether the events of September 11 might have affected the building industry and were this to be rebid, did Mr. Dunlap expect any appreciable change up or down.

Mr. Dunlap advised that the impact of September 11 was discussed and in his conversations with the general contractors, they indicated that ultimately they felt it had no significant impact on their final bid price.

Noting that AI3 had used the same estimator, Mr. McKinley questioned if it was reasonable to assume that he (estimator) has been off by 10% throughout the process. Mr. Dunlap responded that this same estimator did two other projects this spring and was less than l/2% off.

When asked by Mr. McKinley what was different about Wilson, Mr. Dunlap replied that there wasn’t anything in particular that was different from other middle schools. He again noted that this same estimator had been very accurate on another middle school just 4-5 months ago. Mr. Dunlap also noted that about a year ago a separate architectural firm with a separate cost estimator offered an opinion of the accuracy of some of the preliminary estimates.

COLONEL KENNON: PRESENTATION OF SETTLEMENT CHECK

Colonel Kennon from the Natick Army Labs arrived and the Board proceeded to the presentation of a check in the amount of $3.1 million in settlement of the cooperative agreement between the Town and the U.S. Army.

Colonel Kennon, Commander of Natick Soldier Center stated that he was here to bring closure to a process that has been going on for several years. The Colonel recognized the partnership between the Town and the Labs and noted that this was the best use of the public money. He recognized the hard work of a lot of individuals in making this happen: EPA officials, EPA project manager, former Deputy Tom Rode, Mass Department of Environmental Protection Robert Campbell, Co-chair of the RAB Marco Kaltofen along with A. Richard Miller, the Town Administrator Frederick Conley and Deputy Town Administrator Paul Cohen, the Chairman of the Board of Selectmen Charles Hughes and the other members of the Board. Also recognized were John McHugh and Peter Tuttle from the Army Labs.

In conclusion Colonel Kennon heralded this as a partnership between the Army and Natick supported by DEP and EPA that serves as a model of restoration. It was refreshing to see a group of citizens who care so much about their community.

An official presentation of a $3.1 million check was presented to Christine Willens of EPA, Marco Kaltofen, Robert Campbell from DEP and Chairman of the Board of Selectmen Charles Hughes.

On behalf of the Board of Selectmen, Mr. Hughes thanked Colonel Kennon and recognized the cooperation between the Town and its neighbors – the Labs and expressed hope that it goes on for many years.

SCHOOL COMMITTEE: WILSON MIDDLE SCHOOL

Discussion resumed on the Wilson Middle School.

Mr. Stern inquired if any alternatives methods of construction or scheduling had been looked at which might go to reduce the time of construction and lessen the overhead.

Mr. Dunlap noted that the comment regarding time was a valid one. Anytime AI3 evaluates construction of a project they attempt to ensure that its construction was fast enough and not any unnecessary overhead, but slow enough so that the owner doesn’t pay for any accelerated construction. In the case of Wilson, the Schools were able to establish an ideal construction schedule because there was no requirement to get the students into the facility at any particular date. Any reduction of that construction time would have resulted in a premium for overtime and weekends and extending the construction would result in prolonging overhead that would be unnecessary.

Mr. Dunlap noted that the Schools were also able to gain a secondary entrance into the site via the Building 19 parking lot and that helped the contractors very much.

In terms of the design of the building, Mr. Dunlap advised that some options were discussed with the building committee regarding ways to simplify the entrance of the building with some resultant cost saving. The building committee voted to change the facades to concrete block for the two facades that weren’t seen – the one facing the Jeep dealership and the one facing west. The only facades remaining in brick would be the ones seen by the public. It was reduced to the point where the building committee thought it was aesthetically pleasing without compromising quality.

Mr. Dunlap distributed a document listing items that would have to be cut in order to get to the $1.5 million. Those items included program cuts with the elimination of the auditorium, elimination of the 6th, 7th or 8th grand large group room. Possible architectural cuts would be to replace all interior concrete masonry units with gypsum wallboard and metal stud walls, reduce parking spaces, eliminate all remaining tall storage cabinets from each of the 40 classrooms, eliminate other storage cabinets, simplify exterior appearance of building by deleting all brickwork and traditional precast concrete elements such as window sills, window heads, etc. That had already been done to the east and south elevations which would rarely be seen by the public.

SCHOOL COMMITTEE: WILSON MIDDLE SCHOOL (contd)

In response to a series of questions from Mr. Hughes, Mr. Connolly advised that the authorized $24.6 million was just for Wilson and not Kennedy. The current construction was at $19.438 million and the suggestion was to go before Town Meeting to request $1.5 million on top of the $19.438 for construction bringing Wilson to $26.1 million. Mr. Connolly also noted that the SBA changed reimbursement rates which meant that just over $1 million can be added to the project for reimbursement of 59%. Above and beyond that would be expended at the Town’s risk. The Schools were looking for $1.5 million, but Mr. Connolly said he wanted to make it very clear that only an expenditure up to $1 million would be reimbursed by the state. Asked if he meant that if the Town spent $1.5 million, the reimbursement would only be on the $1 million and nothing on the $500,000, Mr. Connolly responded that that was his understanding.

Mr. Hughes inquired as to why the Kennedy money couldn’t be deferred or make it within the scope of the article that the Kennedy money could be rescinded now and made part of the high school project. Mr. Connolly responded that the Schools wanted to make sure that when Wilson opens, the same types of programs can be offered at Kennedy. The $1 million that will be spent at Kennedy will not address the building needs. The $1 million will make sure that the science classrooms are the same and that the library is the correct size and that the technology education programs offered in the new Wilson can be offered at Kennedy. That would be compromised if the $1 million didn’t go forward.

Mr. Hughes then asked if a cost estimate of the plan for the $1 million at Kennedy was done and if that too was expected to be 10-12% out. Mr. Connolly advised that that work would probably not be done until two summers from now in 2003. He reiterated that the hope for that money was to be able to offer Kennedy the same programs as the new Wilson. They won’t be able to do everything and at some later date do renovations, but this $1 million was to do education programs.

As to technological parody, Mr. Stern noted that $67,000 worth of data devices had been eliminated (from Wilson), and he assumed that related to technology system in the school. Mr. Dunlap explained that that was deleted because it was determined that it could be achieved less expensively by placing it in a technology contracts scope of work to be bid at a later date. When Mr. Stern inquired as to where the money would come from to put it in later, Mr. Dunlap responded that there was a separate budget that applies to technology. Just over $1 million was dedicated to technology.

Mr. McKinley questioned if some of the items previously deleted should be reviewed and consideration given to putting some back in. The difference between $1.5 million and $1.6 million was small and the Town might as well get the appropriate amount so that the school can be utilized for a long time.

Mr. Connolly responded that it appears to be a general consensus that this was as far as you would want to reduce the building and the building committee thought that any further reduction would be difficult to maintain the quality. He didn’t think the reduction of the exterior impedes the quality of the building because the higher quality was facing the public. Everyone was comfortable with those

types of compromises. To go back before Town Meeting for the $1.5 million to bring it up to and slightly above the state reimbursement was prudent and hopefully at the end of the project the full amount will not have been spent because the contingency will not have been spent.

To Mr. McKinley’s comment that the things that were cut out were things that weren’t needed anyway, Mr. Connolly responded that the building was not air-conditioned. Air conditioning was $800,000 and that was one of the first things to go. It could be argued that there should be at least one school that was air-conditioned for summer programs and a middle school would make sense. The piping has been designed in the building so that at a future date it could be air-conditioned. However, he was not sure he was ready to add another $1 million to the project to do that at this time.

Mr. Hughes noted that the $1.5 million doesn’t have to go back to the voters, just Town Meeting. He again raised the possibility of having the scope of the article to allow Town Meeting to debate whether they

SCHOOL COMMITTEE: WILSON MIDDLE SCHOOL (contd)

want to use the Kennedy money. Mr. Connolly responded that his only concern with the Kennedy money was that it was voted as two separate items with two motions. Tonight the Schools would be asking for the Board of Selectmen to call a special town meeting. He (Mr. Connolly) noted that this afternoon he met with the Town Administrator and Town Counsel on an article and if a special town meeting were called, the School Committee would then vote to submit the article and he would be reluctant to propose any other articles. He wasn’t sure how it (using Kennedy money) would affect the bond.

When Mr. Hughes asked if Mr. Connolly would agree (to the scope of the article including the Kennedy money) assuming an article could be drafted, Mr. Connolly responded that it would end up with Wilson being built and the Schools won’t be able to offer the same programs at Kennedy. He would be against it (using Kennedy money).

Looking through the list of accepted cost reductions, Mr. Ball said he saw an emergency generator that was wiped out, and he would urge the Schools to look at this list again. Going for $1.6 million won’t hurt any more than going for $1.5 million. Mr. Connolly advised that he could bring it back before the building committee and School Committee.

When asked to comment, Finance Director Robert Palmer referred to a handout showing the borrowing cost for the Wilson Middle School. He noted that when the projections on Wilson were made, the calculations were made on a 4-l/2% temporary and 6% permanent rate. The Town has recently sold temporary bonds at slightly less than 2.6% and were now looking at permanent at less than 5%. Following a conservative path and reducing the rates for the project to 3.5% on temporary and 5-l/2% on permanent, the impact (of the $1.5M) was about $2.00 per year on the average tax bill. This was assuming the state reimbursement on $1 million and no state reimbursement on the $500,000.

Going back to the question raised about adding items, Mr. Connolly noted that the project has been bid and if the bid were awarded the award would be on what the documents say. Things can be added through change orders, but generally if you reduce something through a change

order, you get 50 on the $1.00 and if you add, you pay $1.50 per the dollar.

Regarding the $500,000 being non-reimbursable, Mr. Dunlap noted that the SBA has policies and procedures. Assuming the Town spent the $500,000, there was a waiver process. One thing eligible (under waiver process) was extreme site costs and because the public school construction cost has gone up so significantly, there are a number of towns spending will above the state reimbursement level with the impression that they will apply for a waiver and some portion may be reimbursed. It is eligible but requires a waiver.

Mr. Ciccariello advised that he talked to one of the bidders on the project with whom he has a relationship and tried to get a feel for where the numbers were. All indications were that the estimate on the site work was significantly low - $800,000-850,000. The other significant increase was the mechanical, electrical, plumbing trades. That was running $2.00 higher per square foot than seen in recent projects and that reflects about another $800,000. As to putting it back out to bid, Mr. Ciccariello pointed out that when looking at the bid market with less than a 6% spread between bidders, the Town got good bids. To go out to bid again, a lot of dollars would have to be trimmed off. In order to save $1.00, $1.50 would have to be knocked off. That would probably mean cutting $2 million and he wasn’t sure where in this design another $2 million could be cut. He also noted that putting it out for rebid allows some bidders the opportunity to increase their numbers. Mr. Ciccariello noted that the bidder to whom he had talked had a very difficult time getting more than one bid on a line item which reflects the school market now. They are so busy that most of the subtrades are pretty tied up on other projects. In conclusion Mr. Ciccariello stated that in his opinion going out to rebid would not be in the best interest of the Town.

When asked by Mr. Hughes if there was any reason that the low bid would not be taken, Mr. Connolly’s response was, “no”.

Former School Committee member Jeffrey Phillips felt that the average person would wonder why $1.5 million worth of items was not just

SCHOOL COMMITTEE: WILSON MIDDLE SCHOOL (contd)

subtracted, and he thought it had to be made clear why that was not possible.

Mr. Dunlap explained that because of the Mass General Laws regarding public bidding, municipalities don’t have the opportunity to enter into a contract and reduce the contract by $1.5 million. A municipality has to either sign a contract by law with the low bidder unless the low bidder is not qualified or reject the bids. There were provisions for change orders, but the law strictly prohibits signing a contract and attempting to reduce it by $1.5 million.

Mr. Hughes asked about the October 23rd date for a special town meeting, and Mr. Connolly advised that that was the date discussed with the Town Administrator. Town Meeting needs to start on a Tuesday and any action of Town Meeting can be challenged for 7 days after Town Meeting and that date would allow the Schools to stay within the bid acceptance period.

A motion was made by Mr. Ball to call a special town meeting for October 23, 2001 with the warrant to close on October 4, 2001 at 5:00 p.m. Seconded by Mr. Stern and unanimously voted.

The meeting was adjourned at 8:00 p.m.

______________________________

Jeffrey A. Stern, Clerk