Would a delay in construction lead to lower costs for the Town?

A delayed construction approach is highly unlikely to lead to lower costs.  Much more likely is that it would result in increased costs. Even in non-inflationary times, construction costs tend to increase by 4%-6% annually. In this period of high inflation, costs are increasing much more rapidly. In 2021, for example, construction costs rose by approximately 15%. Even assuming a return to more typical increases, cost increases of more than $650,000 could be expected for each month of delay in construction.  Among the reasons why a delayed construction approach likely would lead to higher costs are the following:

  • All the bids which were received at the end of August and the first part of September, and which have not been awarded – a total of more than 30 separate trades - will expire, and all work contained within those bids would have to be rebid. 
  • Experience shows that construction costs consistently increase, even in non-inflationary times, and current trends point to continuing significant increasing costs. 
  • Continuing inflation, supply chain issues, labor shortages, and the war in Ukraine make the trend towards higher costs very likely.
  • Events like the recent Hurricane Ian have put an even greater strain on the availability of some construction materials and labor.
  • Even if material costs were to decrease, labor costs almost always increase over time and recently have been increasing rapidly due to the current inflation, thus likely offsetting any possible decreases in materials. 
  • The opening of the new schools would be delayed, thus requiring the continued use of the energy inefficient and expensive-to-maintain existing facilities. 
  • The trade work that was awarded in September likely could not be completed given the dependence of that work on the work encompassed by the un-awarded trade and subcontractor bids, thus leading to possible downtime claims and material storage fees by those entities and additional start-up costs when the work resumed, thus further increasing costs.

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1. Did the original budget approved at Town Meeting in June of 2021 anticipate cost increases between that time and when all bids would be received?
2. Why did the Town choose the Construction Manager at Risk process rather than the Design/Bid/Build process?
3. Why did the Building Committee choose to proceed with four early bids (site enabling, structural steel, concrete, and site work) rather than bidding the whole project at the same time?
4. Why are increases to contingencies recommended?
5. Is the deficit the result of mismanagement by the Town or its contractors?
6. Can the deficit be funded within the existing operating budget rather than adding to the budget and thus increasing property taxes?
7. Will construction continue between now and Special Town Meeting?
8. Would a delay in construction lead to lower costs for the Town?
9. What would the educational impacts be of a delay in construction?
10. If the Town Meeting vote is not successful, what are the options for how to proceed?
11. How likely is it that an additional funding request beyond the current request will be required?
12. Will the Town need to borrow all the money that Special Town Meeting approves and, if not, how will that impact the increase in property taxes?
13. What happens if all the money borrowed isn’t needed to complete the project?
14. Can the second elevator in the West El wing or other items removed during earlier Value Engineering be restored?
15. Can funds for the installation of solar panels at the new school be sought as part of the STM funding request?