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Wednesday, 25 July 2012 13:06

Haywood commissioners ride herd on HCC for building cost overruns

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fr hccbuildingThe Haywood County Board of Commissioners and Haywood Community College continue to butt heads about the school’s new creative arts building, a year after the controversial project was approved.

 

The commissioners have repeatedly questioned whether costly errors made during the project could have been avoided, while a community college official said that many of the problems were unavoidable and not anyone’s fault.

While HCC has already spent more $328,000 in cost overruns so far. But thanks to a contingency fund of $600,000, the project has still remained within its $10.2-million budget.

It’s not terribly out of line with the cost overruns the county has seen on two of its big building projects in the past decade. The county saw more than $300,000 in cost overruns on both the historic courthouse renovations and justice center projects.

Despite this, commissioners have thoroughly grilled Bill Dechant, HCC’s director of campus development, each time he has appeared before the county to get their signature on change orders, allowing him to dip into the project’s contingency fund. While HCC is overseeing the project, the funding comes from a special community college building account held by the county.

With the list of change orders now approaching two dozen, Dechant has become a regular at commissioner meetings, where he is forced to answer whether this or that cost overrun is the result of human error or simply a regular part of the construction business.

With any large building project, a contingency fund is set up to pay for unforeseen costs that inevitably arise.

Commissioner Mark Swanger, a critic of what he sees as excessive change orders by HCC, admits some things cannot be anticipated. During construction of Haywood County’s justice center in the mid-2000s, for example, the contractors found century-old waterlines below ground that had to be excavated and removed, Swanger said. They were not shown on any map of the property, and no one could have known the pipes were there.

With the creative arts building project, however, commissioners feel that some of the change orders could have been easily avoided. Architects had made the door of the electrical room too small for equipment to fit through, or failed to adequately measure water pressure needed for the sprinkler system.

“Those are things that were avoidable,” said Swanger, chair of the Board of Commissioners. “Not all change orders are equal.”

The commissioners have had a less-than-rosy view of the HCC creative arts building since the beginning. Commissioners believed the project was too expensive, too big and too fancy — using up too much of the community college building fund on this single project. They threatened not to approve the project unless the college scaled it down, but in the end,

Commissioner Kevin Ensley was the only commissioner to vote against the project and remains its harshest critic.

“I thought it was too expensive,” said Ensley, who is a surveyor by trade. “Could they have not spent less money on the building?”

HCC could have used some of the money elsewhere, to fund its many other capital projects, he said.

Commissioners have questioned whether the architect team from Raleigh was too far away.

“You wonder if more boots on the ground from the design team would have made a difference,” Swanger said.

It doesn’t help that the county and the architectural firm got off on the wrong foot.

In January, the county was forced to shell out nearly $227,000 for a water pump and an outdoor shed to house the mechanism. Initial surveys failed to account for the loss in water pressure from the main water line at the foot of the hill as it traveled up to the building, so there was insufficient water pressure for the building’s sprinkler system.

“It is always good to have an architect that is familiar with mountain construction,” Ensley said at the time.

One particularly persistent problem-causer is a land survey completed a couple of years before the actual construction began. The survey did not provide sufficient information about the terrain, topography and building site, which has led to a handful of change orders and at least $19,400 in additional costs.

“I don’t think we can blame the surveyor, and I don’t think we can blame the designer,” Dechant said. “We investigated the situation and really felt like we determined that it wasn’t anybody’s fault.”

As a surveyor himself, Commissioner Ensley has criticized the additional costs that have arisen because of the incomplete land survey, however. Ensley said he provides as much information as possible when he conducts a survey.

“I think they should have more information,” Ensley said.

Former HCC Trustee Neal Ensley said the surveyor simply completed the tasks that they were contracted to do and no more.

“The person probably did reasonably what he was asked to do,” said Neal Ensley, who has consulted on county construction projects.

 

Worth the fight?

When an error is clearly caused by the architects, they are responsible for covering the cost of that mistake. If a change order is the result of omitted information, the architects still pay 20 percent in accordance with state regulations, Dechant said.

Although he did not have numbers readily available, Dechant said that the architect has paid for portions of the change orders as well as remedied other errors without submitting the bill to the county commissioners.

However, that still leaves about $320,000 in change orders that has come out of the project’s more than $600,000 contingency fund. Although the commissioners had once hoped to recoup some of that money, Dechant said that the college has ceased talks with the architectural firm since it found no one at fault for the incomplete survey.

The commissioners had mixed opinions about the decision.

“The bottom line is it’s taxpayer money,” Ensley said. “They need to go back and get that. That is what we have done in the past.”

Swanger said he tends to agree with Ensley’s point-of-view.

Another commissioner pointed out, however, that it’s up to HCC’s Board of Trustees, not the county board, to determine whether the college should make the effort to recover any funds from the architect.

“At this point, I don’t think it is necessarily our call,” said Commissioner Kirk Kirkpatrick. “If they’ve made that decision, then they have more information then we do.”

Kirkpatrick added that sometimes it is not worth the fight to recoup lost money.

Haywood County ended up in a legal battle with KMD Construction, the contractor that originally was hired to renovate and restore the historic courthouse. The county fired the company and withheld some of its pay after hearing that the contractor was cutting corners to save time and money. The company ended up suing the county for wrongful termination, claiming that the architect was the real problem. KMD Construction won the suit, and the county was forced to pay the contractor more than $734,000.

 

How does it stand up?

In addition to disagreements about the individual change orders and who, if anyone, is at fault, college officials and the commissioners clash over how many changes orders is normal for a project that size. HCC’s creative arts building has had more than 20 change orders so far.

Swanger questioned whether the college had asked critical questions of architects during the design phase or stayed on top of contractors during construction.

“The community college isn’t very experienced with large building projects,” Swanger said.

Both Swanger and Kevin Ensley said they don’t remember having so many change orders on a project in recent history.

However, Dechant has said repeatedly stated that the amount of change orders is not uncommon. And, the project has gone smoother since he started working at HCC, he said.

“I feel like I have a field of expertise that the college hasn’t had in the past,” Dechant said. “At least since I’ve been here, I feel we have a pretty good handle” on the project.

Dechant was hired in November as HCC’s in-house architect, a common position at state universities with nearly constant construction projects but somewhat new at the community college level. By then, the project had already been under construction for a year, and the troublesome survey had been conducted at least a year before that.

Former HCC Trustee Neal Ensley agreed with Dechant.

“It seems to me that the change orders are within the (normal) range,” said Neal Ensley, a retired architect.

Although he disagrees with the commissioners’ stance on the change orders, Neal Ensley said he does not believe the board is being overzealous in its scrutiny of the creative arts building project.

“They have a responsibility to see that the money is spent according to plan,” said Neal Ensley. “I think they are doing their due diligence.”

Last year, the commissioners and college administrators battled for months about the scope of the creative arts building project, before settling on a plan. Commissioners insisted that the college slash the price of its plans, while administrators argued that the building construction and amenities had been whittled down enough already.

The new facility will house studio and classroom space for students studying the creative arts, such as pottery and woodwork.

Money to pay for the new building is coming from a quarter-cent sales tax approved by county voters more than four years ago to fund improvements to HCC’s campus.

 

What’s normal?

Each construction project is different so if can be difficult to gauge what is a normal amount of additions to the project cost. The following is how much recent projects in Haywood County were over or (under) the contracted budget and the contracted budget. The budget does not include contingency.

Haywood County Justice Center: $328,088 in cost overruns on a $16.05 million construction contract

Haywood County Jail: $280,249 under budget on a $10.53 million construction contract

Bethel Elementary School: $45,432 under budget on a $14.85 million construction contract

Historic Courthouse renovations: $306,437 in cost overruns on a $6.70 million construction contract

New DSS building in former Walmart: $74,335 in cost overruns on a $5.40 million construction contract

HCC Creative Arts building: $319,407 in cost overruns on a $8.40 million construction contract

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