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Climbing Costs

The Medford School District has been under fire for escalating costs in its $189 million bond construction program — now running $27 million over budget — that could force officials to cut one or more projects promised voters in the November 2006 election.

Critics have blamed district officials for poor planning and lack of attention in controlling costs, particularly during the design process of the 18 projects to rebuild or renovate schools. The Mail Tribune reviewed final costs for one of the district's large-scale renovation projects close to completion — Washington Elementary School — to see where construction costs climbed and why.

District officials acknowledge the problems are repeated in projects across the district, and many could have been foreseen had engineering studies been commissioned beforehand — something the district did not do to avoid debt had the bond measure failed.

The largest cost increases at Washington Elementary resulted from a seismic upgrade that contributed to a $1.2 million overrun in Phase 1 construction and asbestos removal that cost nine times what was allowed in the budget. A long-range facilities planning committee, charged with estimating costs before the bond election, had cut about $6 million for asbestos removal in the total bond package shortly before it was approved to be put on the ballot.

The facilities planning committee in fall 2006 estimated that remodeling Washington, built in about 1931, and adding a new cafeteria would cost about $4.3 million. The unexpected problems and higher-than-anticipated construction prices will bring the final cost to about $6.3 million.

"We didn't add to the size of the project; we stayed true to the intent of the project, but it's costing us more because of issues outside of the architect's and contractor's control," said Mark Button, Medford schools facilities director.

Bids for the Washington project matched updated estimates by professional firms made after the bond measure passed.

Last summer, Medford-based Batzer Inc. replaced roofing and flooring, added air-conditioning, upgraded heating systems, repainted surfaces and reconfigured the administrative office to increase supervision of the main entrance. The contractors also installed an elevator and made the bathrooms accessible to wheelchairs so the school would comply with the federal Americans with Disabilities Act.

At the same time, the district changed out locks and door handles and hired Nuprecon LP, of Milwaukie, to remove asbestos.

Vitus Construction Co. of Gold Hill is building a new cafeteria at Washington and converting the old cafeteria into two classrooms.

Both phases of the project were designed by Opsis Architecture, of Portland, and were put out for competitive bid.

"You can't get it any cheaper than bidding it out," Button said.

The facilities planning committee in fall 2006 allowed $34,293 for asbestos removal, far short of the $120,000 district officials estimated after the bond measure passed. Then contractors found more asbestos than originally thought, raising the final cost to $300,322.

A seismic upgrade at Washington adding another layer of plywood to the roof and tying it into the walls was not included because at the time, the committee didn't know it would be needed.

The cost for the contractor to do the first renovation, including the seismic upgrade, an elevator and mechanical upgrades to install new heating and air-conditioning, went up from the committee's estimate of $1.8 million to $3 million in actual costs.

The cost for installing a new cafeteria and converting the old lunchroom into two classrooms has nearly matched the committee's estimate.

District officials acknowledged planning for the bond package prior to November 2006 could have been better, but they said they've been attentive to controlling costs since then, managing some projects in-house and trimming unneeded work where they can.

"We've spent months figuring out what's working and what's not, and we've learned some lessons from that," said Medford schools Superintendent Phil Long. "You really need to do reasonable building assessments up front, particularly around structural and mechanical needs. The other thing is building more flexibility into the plan as far as inflation and a contingency."

Insiders said the committee was desperate to keep the overall bond package below $200 million, the key amount members thought would be palatable to voters. Many of the seismic upgrades and some of the asbestos removal were crossed out at the last minute as the committee sought to meet election deadlines.

The actual amount of asbestos removal and seismic upgrades that would be needed at all renovation projects in the bond was unknown, as district officials decided prior to the election not to spend any money on engineering studies or architectural drawings to determine the scope of the work.

"They had asbestos in the bond budget, but then, they took most of it out when they scaled the budget down," Button said. "Then, we get in there, and we still have to do the work."

Long said he didn't order engineering studies in advance because he was afraid the bond would fail, leaving the district with the debt for projects that might — or might not — come to fruition.

"It was kind of planning for a hypothetical situation," said architect Ken Ogden, who advised the facilities planning committee.

The committee came up with estimates based on average cost per square foot for new construction or level of renovation for elementary, middle and high schools, Ogden said.

Structural and asbestos evaluations and architect drawings were done after the bond passed, changing the scope and increasing the cost of many of the projects, Button said.

District officials also have said the committee didn't account for enough inflation when it came up with cost estimates and failed to include the expense of selling the bonds.

Ogden said he provided the district with an inflation matrix assuming inflation of 10 percent each year over 10 years, so officials would know how much a project would cost as far out as 2013.

Either the committee or district staff neglected to add that inflation into the total cost estimate presented during the bond measure.

"They really didn't have the hard-nose people with construction experience to critique their numbers," said Steve Plunk, an outspoken critic of the district and parent of a North Medford High School student. "They went in with all these wants they called needs. They were trying to get too much done with too little money."

Projects to build a new South Medford High School and to do a total of about $27 million in renovations and structural upgrades at Jackson and Roosevelt, two nearly 100-year-old elementary schools, have been suggested as possible cuts for balancing the district's bond budget. Scrapping the projects at Jackson and Roosevelt will likely mean the permanent closure of both those schools.

"The district and the committee made decisions in haste and said, 'We'll fix it later,' and they haven't been able to fix it," Plunk said. "Whatever they decide I think voters will end up with less than what they bargained for, and a lot of people will be unhappy."

Reach reporter Paris Achen at 776-4459 or pachen@mailtribune.com.

Luis Martinez builds a frame for the addition to the cafeteria at Washington Elementary School, which is being remodeled as part of a $189 million bond project for the Medford School District approved in November 2006. Substantial cost overruns for a seismic upgrade and asbestos removal at Washington are repeated in projects across the district. - Jamie Lusch