In November 2008, we submitted an article to the Kenmore Reporter titled “Delving into the excessive costs of a new Kenmore city hall.” The article examined the building process and its funding. Since then, circumstances have changed in the building industry with an impact on the Kenmore city-hall project. The ensuing delay allowed the City Council to place the project into an open bidding process, even though it is in conflict with the existing contract. The escalating economic crisis provided a highly competitive environment resulting in about $5 million cost reduction. This came about due to a deteriorating economy and not by any individual or group decision. The result is a positive benefit for the citizens of Kenmore.
In examining the changes resulting from the bidding process, our concerns are as follows:
1. Although the overall city building costs have been reduced from the estimated $12.9 million to $7.8 million (lowest bid), we see no evidence of any non-essential building features eliminated as previously recommended. Our suggestions included downsizing the square footage of the building, removing the underground parking garage and other less costly items such as the “green roof,” a water fountain and glass requirements. At some point, the “green roof” was removed, but later reinstated in the bidding process. The underground parking garage was estimated to cost $2 million-$3 million, which is now 30-40 percent of the total building cost. This is seriously out of scale in the project.
2. We note the cost reduction for the “soft package” (furnishings, design, and consultants, taxes, fees, permits and contingencies) has not been addressed. The estimated $7 million should be proportionately reduced with the building structure cost creating a much lower overall cost. This requires a careful scrutiny of items to comply with reduced building costs. An itemized breakdown list for evaluation purposes should be made public by the council.
3. The open bidding process was a beneficial decision by the city; however, a contractual conflict remains with BN Builders, resulting in litigation, which could potentially have an adverse result on city-hall financing. The litigation could negate much of the lower costs gained in the bidding process.
4. Funding for the city hall has been discussed in recent months using bonds as the most favored vehicle. We believe the favorable bidding combined with reduced other options will allow the city to avoid the need for a bond and pay all costs from reserve funds. We emphasize no bond for this project. The financing costs need to be transparent and open to the public.
5. In view of an expected long-term economic recovery, it may be prudent to delay the city-hall project, which could result in further cost reductions. We understand this is unpredictable, but we urge the council to seriously consider this option.
6. At earlier meetings, we noted comments about the need for an operating cost budget for the new city hall. This is an ideal time to establish such a budget that corresponds to the reductions in the total construction costs. These anticipated savings would come from such items as thermal walls, roofs and glass, as well as the new high-efficiency heating and cooling equipment. In addition, consideration is recommended to replace the “green roof” concept with a solar energy system that provides improved heating costs.
In conclusion, we are encouraged that building costs have been substantially reduced due to prevailing economic and bidding factors. However, we believe it is important to further reduce the size of the project and eliminate some of the non-essential features. The purpose of a city hall is to accommodate city employees and provide services to citizens. It should not become a luxurious, social structure at the expense of taxpayers.
Hugh Wiese, Don Williams, Wayne Fu and Jim Palm, Kenmore
