Schools say no to design/build
By Phyllis Moore
Published in News on February 23, 2014 1:50 AM
The design/build method of construction is not the best way to build new schools, and the county commissioners who voted Tuesday ordering that method used to build new schools at Grantham and Spring Creek, need to rethink the issue, the Wayne County Board of Education said Friday.
At a special called meeting, the school board drafted a resolution asking the commission to reconsider its stance on design/build.
Board members said they were willing to make a minimum $5 million down payment on the schools, proceed with the lease purchase agreement and commit to paying $2.9 million annually for the terms of the note. The board also voted to request $700,000 a year from the commission to reduce the note in exchange for the district absorbing the operating costs for the two new schools.
The school board's course of action would require cutting some corners, such as new ball fields at both schools. It was determined that they can always be added later, when more funding is available. Auditoriums at the two schools, as well as the solar components to make them energy efficient, remain in the plans.
The purpose of Friday afternoon's meeting was originally to consider and take any action necessary and appropriate to proceed with the construction of the two new schools "by the design/build process as approved by the Wayne County Board of Commissioners." From the outset, however, it was evident the choice was not popular.
"I have done several projects design/build," school board Chairman John Grantham, himself a contractor, said. "I have also done several working as a client's representative administering design/build. These contracts are not meant to save money. They're meant to save time.
"You can't save time doing design/build where we're at now. In fact, you can pretty much guarantee where we are now, we won't be open by 2015."
Grantham also raised questions about the commission's authority to make such a decision.
"There has been some discussion about whether or not the commissioners have the authority to determine what delivery method we use," he said. "Based on our legal counsel research, they really don't have the authority."
But Grantham added. "We're not here to debate that. We need schools and we're willing to do whatever it takes."
Robbie Ferris, CEO and president of SfL+a, outlined the advantages and disadvantages of the design/build method. The option for schools is relatively new, he said, having just been passed by the state Legislature in its most recent session.
He explained the two types of design/build options -- QBS, or qualification-based selection, and bridging, which is price-based selection.
QBS is good for large projects without a budget, where the scope of the project is not known, he said, perhaps something like a warehouse. The disadvantages include "paying high mark-ups on everything," no incentive to keep the costs down and it may take longer, not to mention rising construction costs and interest rates.
Bridging, he said, involves hiring an architect and writing an RFP (request for proposal). In the district's case, they already have documents but the down side in the design/build statute is there is no price given for the total project.
"At what point do you know how much you're spending on a project?" Grantham asked.
"Under this model, you don't know. You're looking at eight months down the road before you know how much you're going to spend. It's very wasteful. It's an incredible wasteful process," Ferris said. "Design/build is more expensive. We have got a lot more risks -- construction inflation and interest rates.
"Once again we're at a crossroads. We know that the benefits of design/build would be very difficult to show. My recommendation is to reduce costs of these buildings and go back to the commissioners and ask them to reconsider the motion they made the other day."
Ferris said the new statute for design/build is fraught with potential problems, which he feels will be challenged in court at some point.
In his research, he said, it all boils down to one thing -- design/build is not the best way to go.
"That's the challenge with the statute as I see it," he said. "The state says you have to do the analysis. It doesn't say that it has to be better for you to go that way."
Jack Edwards, attorney to the school board, agreed.
"As I recall, you make the analysis as to the benefits and going through this particular process, but as Robbie is saying, I don't think there's anything in there that this is the best, most cost efficient way to go," he said. "As Mr. Grantham said, I think it's totally up to the board to decide your method of delivery.
"Look at the information that's presented to you and make the decision that is the best way to go."
Board member Rick Pridgen said, "I have had some concerns about (whether the commission) being able to force us to go design/build is even legal or not. I understand that they can say, 'No, we're not going to fund this,' but if we were to go to do another try and we get turned down, we may very well be sacrificing a school."
Board member Dr. Dwight Cannon said the situation with the commission has been confusing.
"If their motive was to reduce the costs, how did they contrast the costs that they presented in another session with what they're proposing?" he asked. "I'm really trying to understand the relationship with the board."
Cannon asked why the district couldn't just go out and borrow money from a financial institution. Edwards said that the funding must come through the commission.
"It just seems like we don't need a Board of Education if the commissioners have to sign off on everything," Cannon said. "I don't know, it's just 'we want to cut costs' or 'we want to take care of everything in the county' and use the Board of Education as ..."
"I would say, whipping post," Pridgen injected.
"This is not to berate them, but I think it's a little more than to cut the costs," Cannon said. "If they're going to help us, we welcome it. It seems like big brother is saying that little brother doesn't know what they're doing and I reject that. We have done our homework."
Edwards said the role of the commission is to receive the school board's request and then determine if the financial reserves are there.
"The selection of the project, the carrying out of the project is all in the per view of the Board of Education," he said. "In this situation, we're suggesting to them that we have got lottery and sales tax funding in a sufficient amount to make the down payment plus assuming that we continue to have those funds, to continue to make the payment.
"If we say that we can't predict that so we won't do a project, we won't ever do a project."
The board voted to send the resolution over to the commission, with plans to attend Monday's session of the commission meeting.