HARVARD -- A couple of years into planning the Town Hall renovation and addition project that Town Meeting approved with a $3.9M price tag, selectmen Tuesday night acknowledged that current cost projections substantially exceed that amount.
The board agreed that the right thing to do now would be to go back and ask voters for more money and possibly for borrowing authority to cover the increase.
The issue came up during discussion sparked by Chairman Marie Sobalvarro, who, as Building Committee liaison, updated the board on the project.
Original cost estimates have been revised and now total $4.1M, she said.
After pouring over the list of design components and project-related expenses to scratch items off, she said the Building Committee seems to have reached the end of its cost-cutting rope.
The question now is, what's next?
General contracting bids are expected in next week, for starters, and 15 contractors have reviewed the job so far, Sobalvarro said. Although she did not predict how many of them were likely to submit bids, the committee is anticipating high numbers.
"Construction costs have gone up," she explained.
"Now we have some tea leaves," and there's likely to be a shortfall, she said. What to do, then? Sobalvarro presented a list of options for the board to consider.
Options to funnel more cash into the project without going back to Town Meeting included transfers from various accounts and funds such as Free Cash, Stabilization or Capital stabilization or the Reserve Fund and/or seeking more Community Preservation Act funding in addition to the $1M already committed from CPA or trust fund transfers.
Options such as tapping the budget or going for an excluded debt would mean going back to Town Meeting and in the latter case a ballot question as well.
Fundraising for "extras" not in the project budget could be expanded, but that's about it, she said.
Continuing to put ideas on the table, Sobalvarro said, "We could go clean slate...on a new site" or re-design the renovation and addition proposal to fit the balance in the current project fund, having spent it down by $1 million already.
But in her view, a design re-do isn't a viable option and with no more corners to cut in this one, the only clear path she can see leads back to Town Meeting.
"For me, there's no way we can do it without a 20-year bond, so it's prudent to ensure the asset outlives the loan," she said. And as the clock ticks forward, costs go up, with a "general trend" of 20 to 30-percent increases.
Wrapping up, she left her colleagues with food for thought they can chew on until the next meeting, at which point, "we'll know more," she said, including what the balances are in the various accounts that could potentially be tapped to cover the project shortfall.
"My hunch is we end up $700,000 over budget," posited Leo Blair, who is in the building business himself and has previously red-flagged the costly nature of old building rehabs. In this instance, the building is 143 years old, with a maintenance deficit of many years.
Blair said the seven-percent contingency fund for unexpected expenses isn't nearly enough. He'd recommend a 15-percent set-aside for the unexpected on a $3-4 million project. "Once you open up those walls, nothing good can happen," he said.
But it would be foolish as well as costly to start over. "People like the design" as presented, despite some layout issues that can be worked out, and it's well-known that municipal projects are always more expensive than residential makeovers, given the requirements of a public building, including compliance with state and federal mandates.
All things considered, public projects typically go over the estimates, he said. But in this case the gap is too wide to bridge without voter approval. "We do need to go back," he said, and to ask for enough this time.
The general consensus seemed to lean toward borrowing, with interest rates as low as two percent right now. Town Administrator Tim Bragan said if it goes that way, it would be best to borrow the entire amount.
Blair concluded that the board must be more involved in the project from here on out if they intend to ask taxpayers for more money. "We have to take ownership" and work closely with the Building Committee, with frequent updates, he said. "This is probably the highest-profile thing we'll do for a long time as selectmen."
With an unrelated citizen's petition before them that calls for a Special Town Meeting in October, the selectmen said the warrant could also include articles they aim to start crafting now for the Town Hall project.