On December 11, the Finance Committee and Public Facilities Committee discussed and approved a request for an additional $10 million to fund the NewCAL project (see video). Initially, the City expected to open submitted bids from the second round of bidding on Friday, December 7, but delayed the opening until the day of the meeting. The two bids opened in the second round were:
- $26,390,842 from Colantonio
- $24,207,000 from J&J Contractors
The City had initiated this second round after only one bid was received in the first round, in September, and that bid had been significantly higher than the City’s cost estimates (see Fig City News article).
According to Mayor Ruthanne Fuller’s request to the City Council, this second round resulted in a reduction of $7.5 million in total cost from the bid received in the initial round in September. Citing “inflationary pressures in the building industry,” the Mayor said, “the low bid [in the second round] results in a total project cost of $30.5 million.” Total cost includes the costs of the bid plus financing.
In response to a question from Councilor Julia Malakie, Commissioner Morse explained that the bid opening had been delayed to ensure the contractors had enough time to put together a bid package. He said that the low bid, submitted by J&J Contracting, was the one that came in the day of the Finance and Public Facilities meeting and the one that will be accepted.
During the discussion in Finance, Chief Financial Officer Maureen Lemieux explained that while the bids came in below the bid received in the first round, the revised total cost of $30.5 million is $10 million more than the $20.5 million previously authorized — equivalent to about $600,000 in additional annual cost over the life of 30-year bonds.
Ward 5 Councilor Bill Humphrey asked from where the additional $600,000 per year would come to pay for the project, and he mentioned three potential sources:
- Unanticipated interest income
- Application of Free Cash
- Potentially cannibalizing other budgets as needed across the board.
Chief Financial Office Lemieux responded saying, “The hope and expectation is that cannibalizing department expenditures and other things to add up to the $10 million is not what will happen to the degree that any of you may fear. We have been conservative in our interest-rate projections [for the bonding].”
Ward 7 Councilor Marc Laredo asked about the difference between the original bid and whether there were any changes in the scope of project. Commissioner Morse responded that between the original bid ($29.9 million) and the new bid ($24.2 million), there were some minor technical adjustments made, “but nothing that anyone would see inside or outside of the building.”
The expected completion date is now Spring/Summer of 2025. The Department of Public Words will be working with the General Contractor and will inform the Council and the community of any changes. Councilor Laredo reiterated what other councilors had said — that this is a good project, and while it was unfortunate that the costs have escalated significantly and he is concerned that there is another $600,00 annually that will not be available for other things, it is right to go forward with this.
Public Facilities Chair Alison Leary agreed, adding that she was grateful to everyone involved and acknowledged how long and difficult a road it was.
Ward 4 Councilor Lenny Gentile, picking up on Councilor Humphrey’s suggestion regarding interest income, reported that the City’s Comptroller had shared that in the first quarter (as of October 31) the City has realized interest income of $4.6 million — over $2 million more than the $2.5 million budgeted for the entire year. Councilor Gentile said that if this were to continue over the course of a year, the City could receive interest income “in the $13 – $14 million range …over $10 million higher than what we have budgeted.” He added, “I’m not suggesting that we use the cash … it’s just that it’s a good piece of news that people should have, and it’s a lot of money.”
Because the original docket item did not include the dollar amount, each committee voted to amend the language to include the $10 million request in addition to $19,500,00 previously approved. Each committee voted unanimously to approve. (The $19,500,000 of approved funding mentioned in the docket item does not include an additional $1 million already approved, as noted in the spreadsheet accompanying the Mayor’s request.)
Project information can be found here.