ANALYSIS: Amount being spent on LEC and courthouse project has been known since Sept. 2019

By Bob Steenson, bsteenson@charlescitypress.com

Based on comments at the Floyd County budget protest hearing held Monday evening, and at least two budget-related hearings in the past couple of months, there is an impression by many people that the county law enforcement center construction and courthouse update project costs have been rising significantly because of mismanagement by the county supervisors.

People have commented at public meetings that if a project they were involved in came in at 40% over budget, someone would be fired, and that the prices have gotten “out of control” with no one knowing where the money is going.

But that’s not a complete picture of what happened.

To use an example, if you had a project that you and your contractor agreed was going to cost $100, and your contractor came back after it was almost finished and said it was going to cost $140, you would have a right to be very upset and to demand to know what happened.

But if you had a project you thought would cost $100 and your contractor said, “Sorry, I can’t do it for less than $140,” and then you decided to go ahead with it anyway, the final bill for $140 should not come as a surprise.

In the case of the Floyd County law enforcement center and courthouse update project, it is true that the project’s total cost is very much more than the original architects’ estimates.

If you think the county supervisors should not have gone ahead with the project once they knew it would cost much more than the $13.5 million that was approved at a bond referendum, then you would say they made the wrong decision and many people in the county would agree with you.

But what is not true is that the project cost has increased dramatically from what was approved by the supervisors, or that those higher numbers are a surprise.

The supervisors began learning in early 2019 that the project might cost significantly more than the original estimates.

Their new project management company, the Samuels Group, estimated the cost at a couple of million dollars higher than the architects’ estimates. All of those developments were reported in the Press, usually on the front page.

When the bids from 20 different companies were opened on Sept. 5, 2019, the total cost of the lowest bids came in $4.6 million higher than the architects’ estimate. Again, reported in the Press, with a big page 1 headline.

After months of looking at options, the county supervisors decided that they should go ahead with the higher-priced project, and came up with a plan to cover the additional costs without increasing the project indebtedness beyond the $13.5 million voters had approved.

Supervisors approved nine contracts with nine companies for a total cost of $14,426,811.

Those contracts went to:

• Dean Snyder Construction of Clear Lake for general construction carpentry, for $6.4 million.

• Young Plumbing & Heating of Waterloo for plumbing and HVAC, for $2,725,400.

• MPC Enterprises Inc. of Mount Pleasant for structural precast, for $1,339,400.

• Sweeper Metal Fabricators Corp. of Drumwright, Oklahoma, for detention equipment, for $1,271,218.

• Paulson Electric of Waterloo for electrical, for $1,036,800.

• Wicks Construction Inc. of Decorah for concrete, for $840,000.

• Continental Fire Sprinkler Co. of Omaha, for fire protection (sprinklers), for $347,560.

• Mid-West Roofing Co. of Mason City for roofing, for $234,403.

• Schindler Elevator Corp. of Des Moines for elevators, for $232,130.

Additional expenses were $1,096,454 for general requirements (overhead including fees, inspections, documentation, permits, etc.); $298,099 for the construction manager, the Samuels Group; and a 5% contingency of $596,199, for a total construction cost of $16,417,563.

In addition, the architects, Prochaska and Associates of Omaha, have a contract to be paid 10% of the construction costs, or about $1.6 million if the county is unsuccessful in getting that amount reduced.

That brings the total project cost to more than $18 million — a figure that has been public information essentially since bids were opened in September 2019.

Since then, “value engineering” — a term used to describe ways to cut costs without reducing the value, such as switching to different materials or construction methods — and other cuts have reduced the cost of the project by a total of $585,382.

Various change orders — some additional costs, some reductions — have added $242,288 (less than 1½ percent of the total project cost) to the project, for a net reduction in the bid cost of the project of $343,094 or $16,074,469, plus the architect’s fees and a few other expenses.

So, yes, the project is costing much more than the estimate that was provided voters when they approved the $13.5 million bond referendum.

But it’s not going to cost significantly more than the figures that the supervisors approved more than a year and a half ago, and that have been public knowledge and reported since then.

Now, whether they should have approved those higher figures in the first place, is still a matter of opinion.