School to cost millions more than budgeted for
At the earliest, new facility could open by 2009
BY JANE MEGGITT
Staff Writer

Even though a shovel has not yet been put into the ground, the new Upper Freehold Regional School District's middle school project is $10.7 million over budget.

Paul D'Alto, the preconstruction manager for the project, provided the Board of Education with a project status report at the board's Jan. 17 meeting. D'Alto works for the Marlton-based company Hill International, which the board hired late last year to oversee the school's construction.

In December 2004, Allentown and Upper Freehold voters approved a $38.9 million referendum, of which $36.8 million would go toward building a new middle school on 46 acres on Ellisdale Road.

The referendum was site-specific, meaning that the money would only go toward building a new middle school on the chosen Ellisdale Road property.

Bidding on the project was supposed to start in summer 2006, and the school was to have been completed by September of this year. However, the project was delayed by unforeseen conditions.

The unforeseen conditions included having to remediate soil at the site that tested positive for the historic pesticide dieldrin, trying to get sewer service to the site, which is outside a sewer service area, and trying to amend the township's Wastewater Management Plan (WMP) with the state Department of Environmental Protection (DEP) so that the school could be built on the chosen site.

D'Alto said the project's delay has contributed to its cost escalation. He also said the unprecedented escalation of construction costs since 2004 has inflated building costs.

D'Alto, who has worked on school projects in the state for a decade, said he has never seen anything like the construction cost spikes of the past few years.

He presented the board with a chart that compared the original project budget to the current one. While the total construction budget was $27.7 million, it has now increased by $12.7 million to total about $40.4 million. However, while land acquisition costs were originally budgeted at $3.2 million, the Ellisdale Road property is actually under contract for $2.6 million, or $555,000 less than what was budgeted.

With other costs such as furniture, fixtures and equipment, unchanged at $988,000, the total hard costs have grown from an original budget of $31.9 million to $44 million. Design and management fees have also increased by more than $843,000, from $2.6 million to $3.4 million. Application fees, however, remain the same at $105,993.

The project had a contingency of about $2.2 million, which subtracted from the $12.9 million change in budget totals a referendum budget deficit of a little more than $10.7 million.

D'Alto explained that cost escalation would amount to 21 percent over a 3 1/2-year period until the construction is complete, contrasted with an estimated 6 percent over the two years assumed in the original budget. Overall, the difference in building construction is just under $7.5 million if alternate bid items totaling $1.5 million and value engineering items of the same amount are deducted.

D'Alto said the budget contains about 70 value engineering items, which are items that add worth to the school but can be removed from its design. He said the school district could also opt to change building materials for a cost savings, such as using stucco rather than brick.

Board member Chris Shaw said the previous construction manager for the project had provided a report in June that the project is only $3 million over budget. In response, D'Alto said his company itemized each component, which should have been done all along.

Architect David Fraytak said that while he thinks Hill International's numbers are conservative, he generally agrees with the company's analysis of the project. He also said he believes there are fewer cost overruns than those cited by the company.

D'Alto said the project could be recovered, but that it would be at additional cost and time. While costs could be reduced, taking $10.7 million out of the project would eliminate half of the building, he said.

According to D'Alto, it would take at least another six to eight months before school construction could start due to DEP reviews. The design documents for the project are 99 percent complete, he said, but the state has not provided any assurance to the board that it could build the school on the Ellisdale Road property with the WMP review.

If the DEP finishes its reviews by November, he said, the project could go out to bid in January 2008 and be finished by December 2009.

D'Alto said site remediation would take three months and require a Remedial Action Work Plan (RAWP), which the board would have to send to the DEP. The DEP would then have 60 days to review and accept or deny the work plan.