Lebo Citizens reader and Mt. Lebanon resident Richard Gideon has been keeping meticulous records of the high school project change orders. The list that I have in the sidebar has items that have been moved in and out of the contingency fund and then considered part of a different fund. The list will be corrected in the near future. Thank you, RG, for your update. - Elaine
High School Contingency Fund Accounting
...through March, 2015
Since the beginning of the high school renovation project to 16 March 2015, the Mt. Lebanon School District has spent $5,000,165.57 on change orders (CO's) whilst receiving refunds and/or insurance settlements of $682,131.66, resulting in a net total CO expenditure of $4,318,033.57. CO's are paid, with some exceptions, out of a contingency fund (CF) that was initially established at $4,276,000; however, the fund was theoretically exhausted in March, 2015, at which time the District infused it with $538,000 from other accounts, bringing the CF account total to $4,814,000.00. The following figures have been calculated through the end of March, 2015:
Total spent on CO's: $4,318,033.57
--breakdown--
Average expenditure (includes refunds): $16,544.19
Median expenditure (includes refunds): $10,002.00
Number of CO's & refunds to date: 261
Number of accounting periods (months): 34
Average cost per period: $127,000.99
Number of CO's: 243
Average CO: $20,576.81
Median CO: $10,921.00
Number of refunds/adjustments: 18
Average refund/adjustment: -$37,896.22
Median refund/adjustment: -$7,645.00
Contingency (initially $4,276,000.00 – add $538,000.00): $4,814,000.00
Balance: $495,966.43
% CF used: 89.70%
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The following figures are estimates based on the Construction Update for April*:
Projected April CO's: $47,356.00
Projected April CO total: $4,365,389.57
Projected CF Balance, April: $448,610.43
Projected total CF used, April: 90.68%
*I would caution readers not to assume that the announced CO's for any given month will be paid out of the CF until they are actually paid. The District has been shifting more and more of the costs of the new high school to other funds; such as "soft costs." In addition, it has happened that a particular CO is disputed, and therefore, even though it is "announced," it is not paid until a later date, is negotiated down, or is shifted to a different fund. Only the official list, published in the month following the CO's, shows what CO's were actually paid out of the CF.
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Last year I had predicted that the District would run out of money in its CF in either February or March, which is exactly what happened - although I was certainly not the only person to make such a prediction. With the infusion of new cash into the CF, and at the current rate of expenditure, it is likely the District has purchased four or five additional months of time.
Richard Gideon
18 comments:
I wonder how of these change orders should have been in the original bid but were left out to avoid the referendum vote.
Pretty amazing attention to detail and commitment to his community by Mr. Gideon. Thank you.
10:09 PM There is another referendum requirement in place regarding the cost limitation on the "new construction" portion of the high school project. The other is the "renovation" portion. Without the project documents before me, I recall the cost limitation of the "new construction" portion, above which an electoral referendum would be required, was close to $48 million of the $109 - $113 million total project cost.
I don't know if the change order data can be separated between assignment to "new construction" and "renovation". And, if "new construction" change order additions would cause the cost to exceed the referendum limit. Many project change orders have been questionably reclassified and reassigned to capital projects.
It will be interesting to see if the Board and finance director will release the FINAL cost of the High School project once it is completed.
I set the over/under at $120 million or effectively the amount that got Carol Walton and Rene Garson kicked out of office when they told voters they didn't mind spending that much. Of the incumbents that year, only Sue Rose was re-elected.
With the shenanigans of the capital project funds, I suspect the hard number will be hard to get to.
Do not forget C & A haven't been abated and torn down yet, the tennis courts haven't been built and we will no longer have a rifle range.
For my clarification, the tear down of C & A and the associated costs to remove the material were "not" part of the original bid? Is that what I'm reading here?
Nick M.
Demolition is indeed part of the project. This is one of the reasons why some school board members have been questioning all of these change orders. No one knows what the "demolishers" will run into. Mr. Goldman, when he was on the board, was particularly concerned. The MLSD website, on the page titled "About The Project," states the following: "At the January 18, 2010, Regular School Board meeting, the School Board voted 6-3 to approve the Act 34 document that set the maximum total project cost of $113,274,765. The cost of the project is still fluid. The maximum it could cost would be $113, 274,765." At the Construction Update meeting of 7 April 2015 the total costs incurred to date were adverted to be $98,622,570, which includes "soft costs." That figure was stated to be 91% of the budget (as of the end of March, 2015). Based on those figures the project would come in under the maximum. Whether it does or not remains to be seen.
Does the $98,622,570 include the change orders of $4,318,033.57, or is that separate?
Nick M.
Yes, the CO's are included in the $98,622,570 figure.
Thanks for answering my questions. Between all the high school spending and the municipal spending, sometimes it can be all one big blur (or nightmare).
Nick M.
The $113,274,765 total all in maximum was based on the original design for which construction bids alone came in over $100 million vs. a target construction max of $86 million. That's when the infamous list of 197 potential cost reductions came to light two weeks later, and the project redesigned incorporating a number of those options. One of the more notable adopted design changes was the 20,000 S.F. reduction or elimination in "new construction" area, which must have reduced "new construction" cost by at least $3 million.
Bids on the redesign brought the total project cost down to the $109 million maximum level. Question is, did the redesign and lowered project cost have any legal effect on the Act 34 stipulations, and what are the resultant PLANCON standards on which to judge the project costs today ?
12:36 PM Richard, just to clarify cause there are so many numbers out there, the 91% is based on the final and current $109 million project budget, not the original Act 34 $113 million maximum.
The $113,274,765 total all in maximum was indeed the original amount, and the 91% figure is based on the revised $109 million figure. Part of the problem with trying to follow numbers from the District is that of "stale" information posted on the District's website. However, I am remiss in not indicating the genesis of the $113 million figure.
Having said that, one might also question the 91% figure in light of the $98,622,570 said to have been spent on the project so far. If that sum represents 91%, then the budgeted amount must be $108,376,451 (rounded) - although I suppose this is close enough for government work.
So in a couple of months when all the money is gone then what? Of course there is a ZERO chance that construction will stop. The School Board knew this as they also knew that they had to keep it off the ballot. Will the State allow them to double school taxes? Mt Lebanon needs a Snowden so we get the truth.
I believe there are state regulations in how money is transferred across different accounts in the school budget in regards to school construction. I'm wondering if all the guidelines have been legally met when it appears to me that the money seems to be mixed up in paying the contractor, change orders,etc... And how are these changes are set forth in transferring money from Contingency Accounts to Capital Projects, etc....
9:25 the problem is with the issue of who will enforce whether guidelines aren't met... the super violates numerous guidelines, restrictions, tax and educational laws, ethical standards... we are surrounded by #$%%@
Unknowns include the future cost of completing the tennis courts and the rock pile work. How much was spent on remodeling the field house to accommodate the offices recently moved out of C building? More info is needed.
12:02 AM the 2013 approved budget for the 2014 field house conversion to maintenance department offices and equipment storage was $98,000. That conversion violated Lebo zoning ordinances for a pre-existing non conforming building (building located entirely within the rear yard 75 ft. set back) and a pre-existing non conforming use (field houses are not an allowable secondary building use. The zoning ordinance prohibits both the conversion and the converted use, the Muni was so notified and reminded , but issued a building permit anyway in the "good old boy" tradition.
This Conversion was not in the official high school project because to have done so would have required addition of the stadium complex into the lot coverage and off street parking provisions of the zoning ordinance which would have threatened the project. The District via the high school Master Design Team discussions, later revealed in a RTK, had planned this conversion early on, to be done separately but late in the project using District labor instead of outside contractors - a violation of a State Public Education statute which prohibits use of District employees in construction projects costing more than $5,000. This $98,000 cost will not be included in or be part of the official high school project by virtue of what some would consider to be fraudulent intent, trickery and chicanery. But this should be of no surprise to those in the public who have closely followed our communities disgraceful governance over time.
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