LOWELL — With a $38.5 million construction overrun now clear in the Lowell High School construction project, city council members are looking for answers.
Five representatives from Suffolk Construction and the owner’s project manager Skanska were in front of the council, explaining that the overrun was the result of the COVID-19 pandemic and unforeseen changes in the market.
According to a presentation given by Suffolk Construction and Skanska, tenders for materials for Phases 2-4 began in February 2021 and continued through December 2021.
During the bidding window, steel products increased by 139% on average, lumber and plywood increased by 64%, plastic building products increased by 40% and aluminum profiles increased by 38%. In addition, gypsum products increased by 24%.
Skanska project manager Mary Ann Williams said it was decided to wait for steel, curtain wall and drywall tenders to see if they could bid at a point that was not the top of the bubble.
“We thought we were at the top of the bubble, we were told we were at the top from multiple sources,” Williams said. “We predicted that (costs) would drop and that lumber would drop, not steel. We did not get the relief we were looking for.
Despite the projected costs, Suffolk Construction chief operating officer Sean Edwards said the project schedule had not been changed.
Phase 1 should be on time, the other phases have bought materials, and the importance of buying the last three trades is to make sure they get those materials.
The project has $30.3 million in remaining construction contingencies. Of this money, about $7 million goes to the construction manager, about $21 million to the construction owner, and about $2 million to the project owner.
With $30.3 million remaining in construction contingencies, Councilor Rita Mercier suggested the money be applied to the overrun, reducing the burden on city ratepayers.
The owner’s project manager, Mary Ann Williams, argued that it was good practice on a project of this size to allow for a contingency of this amount. She said it wouldn’t be “prudent” to go with a lesser amount.
“Over 4.5 more years of construction, yes, that’s a responsible contingency for a renovation project of this magnitude,” Williams said.
Mercier dismissed Williams’ comments.
“I don’t buy what you sell,” Mercier said. “I’m trying to protect the taxpayer, that’s what I’m trying to do.”
Councilor Erik Gitschier again insisted that budget expenditures should be turned over to city council and that the school building committee should be kept informed of project expenditures. He also stressed again that the school construction committee be involved.
“You know why the disconnect is there, it’s because this is information that is usually provided to the school building committee for free,” Gitschier said. “I don’t care what Boston does, as it was written in a memo. I don’t care what they say, it’s the town of Lowell.
Gitschier also argued that conversations about potential auction hurdles could have been shared in an executive session, if the rules prevented him from being heard publicly.
“You’ve put us in a pot of gold by looking at the late-game money rather than saying, ‘OK, here’s the position that’s going to be spent and here’s where it’s going,'” Gitschier said.
Mercier asked what the difference was with Arlington High School, as the project was nearly $1 million under budget. Williams replied that the difference was that the Arlington project was tendered from spring to summer 2019.
Mayor Sokhary Chau stressed that he was concerned about the city’s taxpayers and that they would feel the burden, not the businesses that approached the council.
After the presentation, councilors referred a vote on changing the $38.5 million loan order to a public hearing on March 29.
City Manager Eileen Donoghue said the clearance would not preclude the city from exploring other funding options if they were available, however, the remaining trades must be under contract by an unspecified date in April.
Donoghue said two-thirds of the project is under contract, and if the schedule had to be canceled because the city couldn’t sign the final packages, it could impact other contracts.
“If tomorrow the state says we’re going to give you X amount of money, we wouldn’t need to change the loan order to that amount,” Donoghue said.