As officials tally up a multi-million dollar budget deficit in the Bancroft Elementary School construction project, recovery from Hurricane Sandy is likely to put a huge budget strain on all town projects for the coming year.
How and why are not a mystery, especially for those in the insurance industry, like Town Moderator Sheila Doherty.
“The insurance industry, as they’re sitting down right now, they’re looking at the costs of the losses that were incurred because of Hurricane Sandy, the amount of physical property damage that was sustained,” Doherty, president of Doherty Insurance, said. “They’re projecting in their loss projections that the building material costs will be somewhere between 20 and 30 percent higher.”
The budget shortfall facing the School Building Committee could come out around $5 million once the project is done. A year’s delay timed with economic improvement and an improving construction contractor environment are credited for the increase.
But the problem facing that project is just one possible shortfall among many, according to Maria Maggio, acting director of Plant and Facilities.
“Construction is really increasing privately and publicly,” Maggio said. “In the last year or so, it just kind of exploded. The storm’s going to make it even worse.”
The cost explosion will likely last 12 to 18 months, Doherty said.
That may affect these projects:
TOWN YARD: Efforts to rebuild or relocate the town’s municipal facilities are still brewing at nearly every regular Board of Selectmen meeting. This past year, residents narrowly rejected an $18.5 million plan to put the facility on Campanelli Drive.
BALLARDVALE FIRE STATION: The project is “a tenth of the size” of the $44.5 million Bancroft Elementary School project, but it could still be affected by cost increases since it still relies on building materials that are going to be in short supply.
While the projects at the Bancroft Elementary School, Ballardvale Fire Station and Town Yard essentially make up “the big three” in town planning efforts, other smaller projects could also be effected:
DOHERTY MIDDLE SCHOOL: A project that could cost around $3.2 million, before increases are calculated, will replace all paved areas around the school, including sidewalks. The project is slated for 2013 Annual Town Meeting approval.
YOUTH CENTER: Work for the $4.2 million Cormier Youth Center on Bartlet Street is expected to start in June. Fortunately, the building will be modular in nature, which is “where we could probably save some money,” Maggio said.
The town also handles a number of much smaller capital projects every year, and they’re all reliant on materials. To address rising costs, Maggio said, she’s expecting to ask for around 15 to 20 percent more money in next year’s budget.
That’s for work being done by town employees. Larger projects, like those outlined above, will use contractors — and they’re also in short supply as storm repairs are made. That’s before the increased competitiveness of the market is considered.
“The exact same thing happened with Katrina. There were hundreds of thousands of homes that had to be rebuilt,” Doherty said. “There just aren’t enough laborers, there just aren’t enough materials to go at the old price.”
The costs “are only going up,” Selectman Marry Lyman said. Central to her concerns is the Town Yard, which has an added town employee safety aspect to it caused by the condition of the Lewis Street facilities.
“I’m concerned about the fiscal impact as well as the safety impact of prolonging (the project) another year,” she said. “The taxpayers, I think they just want it done — and they want it done cost-efficiently.”