Library costs not as bad as expected; Town shuffles funds to pay

Photo Courtesy Neagley and Chase
A drone high above the Pierson Library captured this photo of the ongoing construction project.

By MADELINE HUGHES

There have been some unexpected costs related to the Shelburne’s Town Center Library project, but Town Manager Lee Krohn said it’s not as bad as expected.

In November, Krohn came to the Selectboard with about $200,000 in estimated project cost overruns.

When the Shelburne News sat down with Krohn on Monday for an update, he said the unexpected costs have been refined down to about $100,000.

The municipal project calls for building a new Pierson Library on the site of the former library, renovating the Historic Town Hall, and making some safety improvements on the municipal campus site.

“The first budget estimate was $7.2 million. The town bonded up to $6.5 million,” Krohn said. “There was already a difference of $700,000.”

That’s when value engineering began, he added. Project engineers and the Town Center Project Construction Committee members looked at specific details in order to make adjustments to lower some costs.

“They would tell me this option would save a $1,000 and still be close in quality, I would say yes,” explained Library Trustee Cathy Townsend. “Because $1,000 here and $1,000 there all adds up.”

Ultimately, the town signed a contract with a guaranteed maximum price of $6.85 million, Krohn said. That’s because the project committee said it could raise money to cover the gap and excess money raised would go to lowering the bond.

The committee raised over $1 million since voters approved the bond for the project in November 2017. There was a $500,000 donation from an anonymous donor, and another $500,000 raised by 426 people. 

Most of the donations are being applied to the project to reduce the amount needed from the bond issue by about 10 percent.

Meanwhile some items in the project have been removed from both the bond and the fundraising funding and instead are being earmarked to be paid for from current municipal budget such as a new municipal campus sign, a new fire hydrant, and repaving the parking lot.

“These issues were brought about because of the project, but not directly the project’s fault,” Krohn said.

Other costs such as the increased cost of steel, replacing the Town Hall front stairs and columns, and waterproofing the Town Hall basement, are covered by the $78,000 contingency built into the budget for the town and contractors.

However, the project’s contingency funds cannot cover the cost of dealing with contaminated soils found on site. That leaves $100,000 the town cannot cover with the project’s bond or fundraising money.

So far, the town has not used its entire bonding authority. Project managers have have opted to bond at various points through the project as funds are needed. The project received $2 million in July on a 20-year bond from the Vermont Municipal Bond Bank, according to Director of Finance Peter Frankenberg.

The town plans to bond again in the spring for the remaining costs associated with the project, he said.

“The amount needed for this loan will take into account donations that have been received to help pay for the project,” Frankenberg said.

That means the project will not use its entire bonding authority approved by voters in November 2017.

Townsend was asked why project officials are turning to other funds instead of bonding for the full amount that voters approved.

She explained that it was because of how the ballot item was phrased. The ballot question listed that “other financial resources” could be used to lower the bond, including fundraising. Of the $1 million in donations, $600,000 were given by donors who specified that they be used to “lower the bond.” Therefore, Townsend explained, those donations must be used for that purpose.

Since the unexpected discoveries in November – some soil contamination and deterioration to parts of the Town Hall building not anticipated – costs have stayed in line with the budget, Krohn said.

“We are now building up, so the hopeful and likely outcome is that we are less likely to find issues,” he said.

More soil testing is planned. December tests came back negative for contamination, a good sign, Krohn said. The state may require some monitoring in the future, he added.

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