Cost of USD 234 improvement projects could be less than expected

Tuesday, March 31, 2015

This is the second of a two-part series.

USD 234 Superintendent Bob Beckham addressed plans and details for moving forward with the $40.8 million school bond issue voters approved in November 2014.

Beckham said the district has brought in three companies; Terracon, for asbestos abatement, Fellers Fixtures as a food service consultant for planning of kitchen equipment replacement, and Peerbolte Creative, a theatrical consultant, for planning of the auditorium renovation at Fort Scott High School. Work on the two-year school bond projects is scheduled to begin late spring or early summer at the high school.

"Those are what fees have gone to before we start the bidding process," he said.

The plan is to get a majority of the work done at all school sites over the next couple of summers with a plan to have all bond projects completed by the start of the 2017-18 school year. Both elementary schools and the middle school also have a list of projects to be addressed.

Nabholz Construction Services of Olathe is the construction manager that has been chosen for the projects. MKEC Engineering, Inc., an Overland Park-based company, is the engineer for the bond projects. Nabholz will navigate the construction process for the district and also help the district seeks bids with subcontractors in order to obtain the best bid.

Beckham said Nabholz will handle bidding and contracts for work with a goal of getting the best price for the district and possibly saving money.

"Based on their experience with vendors, they can bring the price down," he said. "They're after the best price for the district ... the construction manager chooses the best bid to do the work at the best price."

Board of education members will then approve contracts on a monthly basis, Beckham said.

Local contractors will have an opportunity to work on bond projects, Beckham said.

"Nabholz wants to partner with people in the community," he said, adding Nabholz has a plan to meet with local contractors.

Bids were sent out earlier this month for the stadium improvement package and bids for mechanical replacements and demolition of the Juco wing at the high school are expected to go out in early April. Beckham said the district is currently looking for vendors to complete the asbestos abatement at the high school.

The district is also working with two consortia, the National Joint Powers Alliance, a service cooperative and the TIPS/TAPS cooperative purchasing program. They work with school districts to get the best prices for school districts for purchases, Beckham said.

"They've gone through the markets and done competitive bidding already," he said. "The district can go through them as a source and use them. They've done all the bidding ahead of time, and it's no cost to join. It's one more way to take a look at getting the best vendor price possible. Nabholz can use them if they want to. It saves a step."

Beckham said that fortunately, there is currently "no legislation on the table that would impact our in-place bond projects."

After the sale of the bonds in late 2014, Beckham said the mill levy increase for the bond package was reduced from the original figure, 8.5 to 87 mills, to 7.9 mills. At the time, Beckham also said the estimated interest rate for the bonds was also reduced following the sale of the bonds; from 4.3 percent to 3.8 percent.

Beckham said he doesn't see any problems in the immediate future of making the annual bond payments, which will be over a 25-year period. He also said district officials are "anticipating the whole bond project coming under budget."

"There shouldn't be any cash flow problems," he said.

Beckham also said he has learned there is a possibility that the district could receive 52 percent in state aid for the bond projects; more than the 51 percent in aid anticipated.

"That gives us money at the end to pay down the mill levy," he said. "That's based on local valuations in Fort Scott. They're projecting the local valuations may go down and the state would reimburse us at a higher rate. Then we can talk about 'Are there other projects we'd like to complete with the extra money, or pay the mill levy back down?' We'll know more in the future."

Beckham said bond funds are placed in an account separate from the district's regular expenditures. Funds will pay for any work related to the bond projects.

"We're drawing funds down as bills come due," he said. "We've set up a separate account apart from everyday expenditures for the district. Right now, things we've paid for are consulting fees and survey fees ... there's not much money flowing through yet. That same account will pay for construction projects. It's exciting to watch the process unfold."