Fund covers extra costs

The school district used contingency funds for a soil project at the Lincoln school site.
By AMANDA GARRETT
VINDICATOR TRUMBULL STAFF
WARREN -- Any major building project has unexpected costs, and the Warren city schools' ongoing $153 million construction effort is no different.
The school district and the Ohio School Facilities Commission, however, have a built-in contingency fund to deal with any cost overruns.
The Warren project is part of the Rebuilding Ohio's Schools program sponsored by the commission. It is replacing all 13 old school buildings with five new ones. The project will consist of a new Warren G. Harding High School and four new buildings for kindergarten through eighth grade.
A required component of the program is a construction contingency fund to pay costs for any unforeseen events, senior manager Bill Schurman said.
"It's a safety measure to avoid project overruns," said Schurman, who works for the construction company Carbone, Ozanne and Hammond management team in Canton.
The commission requires the contingency fund to be 5 percent of the construction cost for every new project -- which is the case for all the schools in Warren -- or 8 percent for any renovation.
Warren schools and the commission set aside a total of $5.7 million in contingency funds for the five projects.
How it's divided
The new high school has almost $2.2 million in contingency funds, and the Lincoln (Atlantic Street) and Willard Avenue sites both have $884,931. The two other kindergarten through eighth-grade sites now under design both have $877,009 in contingency funds; locations are not decided.
Contingency funds are often used as part of the change order process during construction, Schurman said. Change orders are usually made when something unforeseen occurs.
Every construction site is unpredictable, said Mark Donnelly, Warren schools' executive director of business operations.
"There are always unknowns," he said. "You can't predict the weather, and you can't predict what the soil will be like."
A good example of a change order is a soil problem at the Lincoln school site off Atlantic Street, Donnelly said.
The building plans called for soil on the site to be used as the foundation under the pad, but it turned out the soil was too wet to use, Schurman said.
Warren schools used $114,000 of the Lincoln site's contingency fund to put a cementlike drying agent on the soil so it could be used, Schurman said.
If one site doesn't use all of its contingency funds, Warren schools can move the money to the contingency funds for other sites, said Frank E. Caputo, the school district's executive director of personnel, professional development and recruitment.
The money can also be used for landscaping the buildings or buying furniture for classrooms, Caputo said.
Details on funds
In Warren schools' case, 81 percent of the contingency fund comes from the state commission, and 19 percent comes from the school district.
If the school district doesn't use all of the contingency funds, 81 percent of any leftover money will be put back into the commission's coffers to fund other Ohio school building projects. Warren schools' 19 percent would then automatically revert to the district.
If all of the contingency funds are used and there are still legitimate parts of the project that require funding, invested earnings from the project fund are to be used, Schurman said.
Similar to the contingency fund, once the project is completed 81 percent of invested earnings will revert to the commission's fund and 19 percent would go to the Warren district's maintenance fund.
If all of the investment earning is used, only then would the project run into a cost over-run, Schurman said.
Warren is on track to complete its massive project by mid-2009, Caputo said.
Warren voters approved a bond issue in November 2003 to provide the local share of the construction money.
The board of education will be deciding on bids submitted by contractors for the new high school construction at its meeting Tuesday.
The district's estimate of costs for Harding was $40 million, but Schurman said several of the bidders gave combined bids for more than one project, which lowers the estimate.
The bids to be acted on Tuesday include general construction, masonry, heating and cooling and electrical.
Schurman said he will make his recommendations on the bids Tuesday and then the board will decide which to choose.
Once the board decides, commission members will then need to award contracts for the project to move forward.
agarrett@vindy.com