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Ely school project hit with rising costs

Building renovations may be scaled back

Keith Vandervort
Posted 6/16/21

ELY –No turning back now. Demolition of the Ely school Industrial Arts building started Monday afternoon as the $20 million facility renovation project moves forward for ISD 696.School board …

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Ely school project hit with rising costs

Building renovations may be scaled back


ELY –No turning back now. Demolition of the Ely school Industrial Arts building started Monday afternoon as the $20 million facility renovation project moves forward for ISD 696.
School board members gathered a couple of hours later and were briefed on how they hope to proceed with a project that was bid millions of dollars over budget.
District leaders formally rejected the entire second phase construction bid package that came in last month at more than $8 million, twice the amount that was estimated.
School officials and project managers are now facing the prospect of working through possible major reductions of as much as $ 4 million in renovating the existing school campus buildings when they re-bid that portion of the project later this fall.
While the first phase of the project that includes the construction of a new building between the Washington and Memorial buildings came in at budget earlier this year, the second phase of the project was bid later in the spring just as building material and labor costs took a tremendous spike skyward as the post-COVID world reopened.
According to ISD 696’s project design consultant Scott Sosalla, of Architectural Resources, Inc., the prospects of construction costs “normalizing” anytime soon are dim.
“I don’t realistically think that (construction costs) will drop to what they were pre-COVID,” he said.
He cited two factors in trying to explain why the second phase construction bids were double, from $ 4 million to nearly $9 million, from what was budgeted. The current labor force market and cost of materials is one factor. The other is the scope of work that was developed for the renovation of the two existing school buildings.
“If it was just COVID and we kept with the original scope of work, my gut tells me we would be 30 to 40 percent over (budget), rather than 100 percent over budget,” Sosalla said. “We have to work with the school district to make this timeframe work and get those dollars to where they have to be. We only have so much money in the bucket, and unless we find more money, we have to work backward to see what we can afford and what the priorities are.”
Sosalla said as the details became clear for the second phase of the project, the renovation of the Washington and Memorial buildings, costs kept rising.
“Part of the issue was that everybody dreams and wants more and more,” he said. “The fitness center, locker room area, that started as infilling the pool area, ended up with gutting the whole thing. The same thing happened with the bathrooms. At first we were going to refresh the bathrooms, and we ended up gutting everything and adding new tile, new everything. It is all great but it didn’t fit as far as the original budgets.”
He added that construction material costs have exploded.
“Three years ago you could buy a 2x4 for two bucks and now you pay $12,” he said. Building material availability is a major obstacle for the project.
“The smart thing that was done by the district was getting that first phase bid when you did,” Sosalla said. “If we waited and bid the whole project together, some materials would not have been available until November of 2022. There is that much of a delay in materials now.”
Sosalla’s design group and the project manager, Kraus-Anderson, continue to work on “dialing back” the scope of the second phase to re-bid that portion within budget.
“As we redevelop this package there are things we need to consider, including the air quality improvements and new air handlers, and similarly, we have to do something with the bathrooms to make sure we eliminate the lead in the water.”
He noted that the city is working to get water main replacement and infrastructure funding through the Department of Iron Range Resources and Rehabilitation.
“We don’t know where the market is going to be this fall,” Sosalla said. “We hope to have the project re-bid somewhere between October and January of next year. If we were in budget and moving forward, materials would still be delayed. For instance, if we were to order doors today, delivery is 22 weeks from now.”
The school renovation project is proceeding these days with a minimal staff on campus and a small summer school program. All that changes on the day after Labor Day with the start of the 2021-22 school year and 500-plus kids in the buildings.
The Early Childhood and Family Education program will be looking to occupy its new digs in the former Washington school library space. Also, the Memorial school media center will be demolished this summer to make room for the new building.
Sosalla assured school board members that any missing walls will be replaced before school starts in the fall.
“Those spaces will be able to be utilized, whether for choir or a temporary industrial tech area, when school starts,” he said. “Walls will be up and the building will be secured.”
Mike Dosan, of Kraus-Anderson added, “Our goal is to have the ECFE done for the start of the school year this fall. Also, the demolition of the elevated media center in the Memorial building will be secured.”
He added, “Today, moving forward we will be working with ARI to come up with the budgets (for the second phase re-bid process), and put a list together to bring forward. The number one goal is to create a set of drawings that represent the review and comments from day one, and make sure that we are managing your expectations.”
School board member Darren Visser said the expectation of the school district voters should be kept in mind when considering cost reductions for the project.
“The public voted for something, and we really have to analyze what the priorities are, and also what ways to save money. In the end we have to give them a project they are expecting to get. There is a lot of concern at this time, as there should be,” he said.
Board members hope to use a portion of their study session on Monday, June 28, to discuss options to reduce the scope of the project’s second phase to get back within budget.
Other business
In other business, the board:
• Heard from Superintendent Erik Erie about an appeal filed in the recent book banning request. The appeal will be studied and Erie will make a recommendation to the school board in July.
• Postponed a request from the school principals for additional compensation for COVID-related work so a Memo of Understanding can be developed, reviewed by legal counsel, and approved.
• Postponed discussion of the Q-Comp Annual Report to July.
• Approved Minnesota School Board Association dues of $3,508.
• Approved a quote from Lakes Gas Co. for the tanker propane supply for the 2021-22 school year of $1.05 per gallon, an increase from 76 cents per gallon last year, and a quote from Superior Fuel Co. for the bobtail propane supply for $1.19 per gallon, up from 99.5 cents last year.
• Approved the 2021-22 annual premiums submitted by Vaaler Insurance in the amount of $127,830.32.
• Hired Suzanne Zobitz as a foreign language teacher.
• Approved a bus maintenance diesel mechanic agreement with Jeff Anderson.
• Hired Brittany Baier as a Kindergarten teacher.
• Hired Tracy Johnson as a paraprofessional.
• Accepted the resignation of Janelle Hart as Junior Class Advisor and Junior Banquet.
• Accepted the resignation of Justin Olson from the temporary full-time custodian position.
• Accepted the resignation of James Lah as Youth in Action Advisor and Fall Musical Director effective at the end of the 2020-21 school year.
• Accepted the resignation of David Anderson from his position as paraprofessional.


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