Update on 10/5/2019
Since I wrote my last article in the paper about the proposed elementary school construction project, the Arcola School District School Board, Administration and Staff have continued to refine the different aspects of the proposed construction project. Because of these on-going meetings, there have been a few changes to the original design. The changes from the original design are in bold below. The proposed project currently includes the following:
- Construction of a new front elementary entrance extending to the north from current entrance. This will include a new reception/waiting area designed with security in mind. It will also include expanding the width of the hallway
- Construction of new main office, several offices for staff, a conference room, and three smaller classroom spaces.
- Renovation of current elementary library.
- Transforming the current office and part of the staff workroom into new boys and girls restrooms.
- Expansion of the nurse area into a larger area with more space.
- Replacement of asphalt by newly renovated preschool playground.
- Floor and ceiling tile replacement in all elementary hallways and current cafeteria area
- Renovation of all hallway and cafeteria wall finishes.
The district has also put a lot of effort into researching the best way to approach actual construction. Since construction on a school building happens only every fifty years or so, the board wants to make sure that the district uses the best possible approach in order to get the most efficient and highest quality facility as possible for the community and our students. This research has centered on comparing the effectiveness of and costs associated with two different approaches to construction: using a traditional architect - general contractor approach or using a construction manager in partnership with the district architect.
Architect – General Contractor
The first approach to construction is a more traditional approach where the district contracts with an architect that designs the building, does all the schematic drawings, develops all specifications, creates the construction schedule and bids the project. The district then approves the design and goes out to bid. General contractors then secure their own subcontractors (such as electrical, plumbing, concrete, etc.) and submit an overall bid for the project. The district conducts a bid opening and chooses the lowest responsible bidder. Following approval, the general contractor then takes all the architect drawings, coordinates the subcontractors, and oversees all construction of the project. The general contractor is responsible for all day-to-day construction with occasional inspections from the district architect.
When general contractors bid a project, they include overhead and profit, general conditions (bonds and insurance) and a percentage mark-up on subcontractors in their bid. When proposing a cost estimate for the elementary school project, the district architect estimated the district would spend between 23% and 25% for the general contractor on a project this size.
Architect - Construction Manager
The second approach is the use of a construction manager (CM). A construction manager performs all the tasks of a general contractor plus more. The biggest advantage to using a construction manager is that they get involved in the design phase of the project and then continue on after bids to coordinate construction. They work closely with the district staff and the architect to ensure constructability, which is a process for identifying obstacles before a project is actually built to reduce or prevent errors, delays, and overspending. They also focus on the long-term sustainability and efficiency of the design. They have a lot of experience with actual construction, more so than even the architect, so that knowledge becomes very valuable in the design phase of a project. In using this approach, the construction manager and architect conduct public bids for all subcontractor work on a project. The district enters into contracts with the various subcontractors and their work is coordinated on a daily basis by the construction manager. The construction management company used by the Arcola School District actually has a quality department. So in addition to having daily on-site supervision by the CM, they send their quality department to do an official inspection of all work completed by subcontractors. This process helps to ensure that all systems are installed correctly up front, which prevents problems from occurring later.
One of the biggest differences between using a general contractor and construction manager is in the approach to fees. When using a general contractor, their fees are built into the overall price of the bid. As discussed earlier, the fees can vary up to 25% and include profit, overhead, general conditions and mark-up on subcontractors. Generally, a district does not even see the exact breakdown of their numbers since they are just rolled up into the overall cost proposed by the general contractor at the time of bid.
On the other hand, construction manager fees are usually proposed separate and up front. The proposal the district received for the elementary school project included the following:
- Pre-construction Fees – this is a lump sum fee for their involvement in the pre-construction design phase.
- General Condition – this is a lump sum fee for management staff needed in order to properly oversee the construction schedule, provide quality control, and ensure project is constructed in a safe manner.
- Professional Management Fee – this is a percentage fee of the overall construction services.
In conducting the analysis of the two different approaches, the school board considered two items: 1. What approach would lead to a better end product and a product that will have long-term sustainability and affordability and 2. The costs associated with each approach.
When looking at cost, the school board used the estimated construction costs proposed by both the architect and construction manager. The construction manager’s estimate included a total of $1,639,400 in construction costs and $344,500 in construction manager fees. On the other hand, the architect estimate included $1,570,095 in construction costs and $392,524 in general contractor fees when using the 25% figure for overhead/profit, etc.
This analysis revealed that using a construction manager would most likely not cost the district a lot more money than using a general contractor and it could even end up being cheaper. There is no way to know for sure which approach would be cheaper for the district but the importance of this financial analysis is that it at least informed the board that the construction management approach would be a financially feasible approach.
When the board discussed which approach would lead to better end product, the general consensus was the use of a construction manager. The board felt these reasons were the most compelling:
- 1.There is a great value in having the on-site construction people involved in the planning phase of the project.
- 2.The district had the ability to research, interview, check references on and select the construction manager. In a straight bid process, the district must accept the lowest responsible bidder for a general contractor. Many times this works out great but sometimes it does not.
- 3.The construction management company will provide not only daily onsite coordination and supervision of the project but will also provide on-going quality inspections to ensure high quality work.
As a result of this analysis, the Arcola Board of Education approved Poettker Construction as the construction manager for the upcoming construction/renovation project. The contract includes a straight fee of $22,000 for pre-construction services, $225,000 in general conditions and a 4.25% fee on subcontract work. In addition, the board also approved a contract with Graham and Hyde Architects. The cost for architect services includes a fee of 9.5% of all construction including construction manager services. This is estimated to be around $200,000.
The architect and construction manager will now work with staff to finalize the design and develop schematic drawings for the project. The hope is that the board can consider approval of the final project plan and release bids around the first of January with construction to occur in April/May. Of course, any construction work that will start with school in session will be done so in a safe and non-invasive manner.
Update on June 20, 2019
A few weeks ago, the Arcola School District announced that the school board was considering the construction of a new front entrance area for the elementary school and the remodeling of the hallways in the elementary and cafeteria area. Since that time, a district committee comprised of administrators, teachers, support staff professionals and building staff have conducted several meetings to discuss what exactly would be needed in the project if it were to move forward. The main message from all parties on the committee was: “We need new bathrooms!” There were many reasons for this suggestion but some of them included: the current bathrooms are
- in desperate need for remodeling
- too small, which leads to a lot of lost instructional time
- not handicapped accessible
As a result of the feedback, the revised proposal does include new boys and girls bathrooms that will be located where the current office is now.
The Arcola School Board building committee recently met to discuss the revisions and they endorsed of the proposed changes. The committee is also recommending that the full board consider approving an agreement with the district architect in July to continue moving forward with preparation for the project. They also strongly recommended that the district superintendent hold some informational community meetings about the proposed project to get input from the community.
Click on this link to see the most up-to-date drawing of the proposed construction.
Initial Article on Proposed School Renovation
One big responsibility for a school district board of education and administration is taking care of the school district facilities. They must ensure that the facilities not only provide safe and comfortable conditions for learning; but that they create an environment that enhances student learning. In addition, having nice facilities also improves the public image of the district along with the community and is part of what draws new families into town. Taking care of the district facilities is a large task that requires a lot of time and planning.
For many years, the Arcola School District was limited in the number of facility-related improvements that could be completed because of financial constraints. But once the 1% sales tax for facility improvements passed in 2013, the number of projects greatly increased. Since the start of the tax (revenue started flowing to the district in April of 2014), the district gets around $500,000 annually in sales tax revenue.
1% Sales Tax for Facility Improvements
As many of you know, the 1% sales tax has made a tremendous impact on the Arcola School District. Revenue from this tax can only be used in two ways: for facility improvements or to pay off debt generated from building projects. Over the past several years, the district has completed a variety of capital improvement projects using sales tax funds. Some projects that have been completed using sales tax funds include: installation of new fire alarm/mass communication system; renovation of both playgrounds; installation of entire new heating and air conditioning system in the 1917 building; elementary gym renovation; two roof replacements; new tile in the entire high school addition; track resurfacing; new football lights; installation of maintenance shed, etc.
Many of these projects were designed to create a safe and comfortable environment, but many were also done to enhance student learning. You may ask how does building a new maintenance shed enhance learning? On the surface, it may not be obvious. The new shed allowed the district maintenance staff to remove all equipment being stored in the agriculture classroom and this, in turn, allowed the agriculture shop to be renovated to include a new classroom area for the Project Lead the Way Engineering courses being offered in 19-20. The impact on student learning becomes more obvious when all the details are understood. This is also a great example of the forward thinking, planning process the staff and board engage in with regard to facility improvements.
1% Sales Tax for Paying Off Debt
In addition to building projects, the district has used some of the sales tax proceeds annually to abate (pay off) part of the district bond payments; thereby lowering the property tax burden to taxpayers. This was especially true when the district refinanced the building bonds from the high school addition in 2014. The district front loaded the principal payments for two years and used over $200,000 a year of sales tax revenue to abate part of the bond portion of the tax levy. In all, the bond refinancing saved district taxpayers over $460,000 in interest and shortened the length of the payoff from ten years down to seven. This savings was made possible because of the ability to pay off a portion of the bond principal with sales tax proceeds.
Long Term Facility Planning
About a year ago, the Arcola School Board requested that the district superintendent, with support from the building and grounds director, develop a long-term plan for facility improvements. After engaging staff in the process, the long-term plan was presented to the school board building committee in January of 2019. The building committee worked with district administration to complete several tasks including: (1) determining which projects can be completed by district staff and which projects must be outsourced; (2) determining estimated completion dates for various projects; (3) determining estimated project costs; (4) determining which larger scale projects should take priority; and (5) researching the possibility of selling alternative revenue bonds to complete larger scale projects now rather than waiting for the district to save enough money to be able to complete the project.
Building Committee Recommendation
Based on that work, the superintendent and building committee made the following recommendations:
1. Continue using a portion of annual sales tax proceeds to pay off a portion of the building bond payment annually until the full bond is paid off. The last building bond payment is November 2020 during the 2020-2021 school year.
2. Spend between $100,000 - $200,000 of sales tax revenue annually on smaller scale projects that are outlined in the long-term capital improvement plan.
3. Ensure that there is a sufficient capital fund balance (of around $400,000 - $500,000) in case of an unforeseen building emergency.
4. Move forward with significant upgrades to Arcola Elementary School, which will include a new front entrance/office/classroom space and renovation of hallways. This will be explained in more detail in a later section.
5. Fund the elementary project through selling alternate revenue bonds or debt certificates that will be paid off annually with sales tax revenue. This will NOT IMPACT DISTRICT PROPERTY TAXES. This will also be explained in more detail in a following section
Elementary Building Project
Of all the larger scale building projects discussed, upgrading the elementary was chosen to be the priority. A portion of the elementary school was built in 1955 and another section was built in 1960. The hallway flooring and wall finishes are still the original design. The proposed construction/renovation would include:
1. Construction of a new front elementary entrance extending to the north from current entrance. This will include a new reception/waiting area designed with security in mind. It will also include expanding the width of the hallway
2. Construction of new main office, several offices for staff, a conference room, and two smaller classroom spaces.
3. Renovation of current elementary library.
4. Renovation of current office into a larger, more functional area for the nurse.
5. Replacement of asphalt by newly renovated preschool playground.
6. Floor and ceiling tile replacement in all elementary hallways and current cafeteria area
7. Renovation of all hallway wall finishes.
The proposed timeline for the project includes the following:
1. Further staff discussion/input on proposed project (May – September, 2019)
2. Community Input on project (June – July, 2019)
3. Board decision on final scope of project (August 9, 2019)
4. Staff involvement in final specifications (August 9 – October, 2019)
5. Architect finalize specifications, drawings and bid documents (August – December, 2019)
6. Board approves project for Bid (December 2019/January 2020)
7. Board approves project bid (February 2020)
8. Project begins (May 2020)
9. Hallway and inside renovation completed (August 2020)
10. New construction completed (December 2020)
Financing the Project
The estimated cost for the entire proposed project is around $2,000,000. If the board decides to move forward with the project, the plan will be to sell alternate revenue bonds or debt certificates and pay the annual bond principal and interest payment with sales tax revenue. Again, this will not increase or even impact the district taxpayers’ property taxes.
The board has discussed not going over an annual payment of $250,000 a year. That means, the district would be looking at a 10-year payment schedule. Remember, the district gets around $500,000 annually in sales tax revenue so this will take about half of that revenue. The remaining revenue will go towards bond abatement (until 2020 when the building bond is paid off) and for other annual capital improvement projects on the long-term plan.
If the timeline above is followed, the first payment will not be due until November 2020. The 2020-2021 school year is the only year the district would have both a building bond abatement and the payment for the new bonds. Starting in the 2021-2022 school year, the district will have around $250,000 annually to complete other capital improvement projects.