Windermere OKs construction agreements

Windermere Town Council members have approved two guaranteed maximum-price contracts for the new town facilities and public works shed area.

Both contracts discussed during the Town Council meeting Tuesday, Jan. 12, set a limit that the town will have to pay its contractor or subcontractor — regardless of the actual costs incurred. A guaranteed maximum-price contract puts a cap on the contract price. Any costs that go beyond the guaranteed maximum may need to be covered by the contractor or subcontractor.

For the new town facilities, the guaranteed maximum price has been set at $4,768,662. The maximum price for the new public works shed is capped at $394,327. The town spent several months negotiating the contracts with H.J. High Construction, Town Manager Robert Smith said. 

With the new town facilities, the guaranteed maximum price exceeds the original estimate of $4,484,645 by $352,534. Much of this is because of built-in contingencies and increase of construction costs in recent years.

“The price did come back over what was originally anticipated and budgeted for,” Smith said. “ A lot of that was due to the fact that the price that was originally estimated was 3 years old. … There is $100,000 in contingency for the vendor and $55,000 for the contingency for the town of Windermere. In addition to that, two things that did add to the cost was ballistics for the admin lobby — that was $15,000 — and then the upgrades for the HVAC system was about $40,000.” 

Smith said he has worked with the town’s finance department to determine that the town can absorb the overage between the Fiscal Year 2020-21 and 2021-22 budgets.

“We have no problems with not only the price but also no problems with recommending that we go with H.J. High,” he said.

Council Member Chris Sapp said he appreciated town engineers John Fitzgibbon and Stephen Withers, as well as Smith, for their roles in helping facilitate the projects at hand.

“Being in real-estate business and dealing in construction and everything, we verified that prices have gone up significantly in the past 24 months or so, so I do really appreciate their efforts,” Sapp said.

Council Member Bob McKinley clarified that the $5.2 million residents approved borrowing to pay for the new government buildings will not be exceeded, saying that anything that goes over will be handled in-house.

“There’s not going to be an increase to any assessments by taxes,” Smith added. “Everything will be absorbed in this fiscal year and next fiscal year’s budgets.”

Regarding the public works shed, Smith said, the original assessment and budget estimate for new facilities did not include reconstruction of the shed. Staff decided it made both logistical and financial sense to construct both at the same time.

“That’s the area where we store the vehicles and we also have the shop, so on and so forth,” he said. “When we found this out and found out that it wasn’t part of the bond, as well, we wanted to make sure that we kept everything separate because you can’t tie in other costs into the bond itself. That’s why needed to do an addendum to the first agreement to make sure that we technically have two agreements — one’s for town facilities, and this second is for the actual public works shed.”

By doing this, the bond issued to the town for its facilities is split from costs for the public works shed, which was not originally included. This makes it cleaner for auditing purposes. 

Smith said he and the town’s finance department budgeted half of the $394,327 construction cost in the Fiscal Year 2020-21 budget, with the remaining cost to be budgeted in the Fiscal Year 2021-22 budget. The balance between what was budgeted and negotiated is less than $10,000, according to town documents.