Just as the Jackson Town Council was about to close the books on its budgets, a surprise $735,000 expense caught councilors off guard.
“I don’t believe we can absorb a $735,000 bill,” Councilor Jim Stanford said Monday during a final review of the budget, which the council planned to approve hours later.
“We’re not at the eleventh hour or even the eleventh and a half hour,” he added. “It’s a few minutes to midnight before we adopt this.”
The $735,000 was the town’s portion of a bill for a joint project: the Teton County/Jackson Parks and Recreation employee housing and maintenance facility at 400 Snow King Ave., the boxy building that now sits across from the Teton County Fairgrounds.
Part of that sum, Parks and Recreation Director Steve Ashworth said, was for previously approved expenditures that had not made it into the town’s budget, about $435,000.
The remaining $300,000 or so was the town’s share of cost overruns for the project that were only booked in the past few weeks.
An $8.4 million or so budget had been approved for the project, a figure that included $7.52 million for the building at $309 per square foot, $565,140 for furniture, fencing and the like and $350,000 for an equipment lift.
The overruns, clocking in at $665,794, amount to an unexpected 7.9% increase in the total cost.
“Five percent is normal,” Ashworth said. “This one is 3% higher than what I’d like to see.”
Those figures led the Jackson Town Council, Teton County Board of County Commissioners and their staff to question whether the two government agencies are set up well enough to execute such big ticket items, including some that are now coming down the pipeline.
After reviewing the problems with commissioners Tuesday, Ashworth made a recommendation similar to one he made to town councilors the night before: reject all bids for the $22 million Specific Purpose Excise Tax or SPET-approved expansion of the Rec Center to come up with a plan to better manage SPET projects by the end of the year.
Parks and Rec had been poised to choose contractors for the expansion of the Rec Center, a committee decision that was hotly contested with local applicants questioning the bidding process.
That’s not the only major SPET construction on the horizon. Voters also approved an $18.5 million vehicle maintenance facility for storing and repairing government fleets.
Town and county officials discussed also evaluating town and county construction processes in general. On Monday, Town Manager Larry Pardee laid out why that could be important for upcoming projects.
An 8% overrun on a $22 million project is just north of $1.75 million. On an $18.5 million project like the vehicle maintenance facility a similar overrun would be about $1.5 million.
“So it’s real money,” Pardee said. “I mean, these projects are big.”
The Snow King project has been on the docket for years. It’s intended both to expand Parks and Rec’s maintenance facilities and to offer 20-plus units of housing for town and county employees, START bus drivers in particular.
Parks and Rec has expanded significantly since 1979, when the maintenance shop it still uses was built. Then the department managed only a few parks. Among other things, it now manages 19, Ashworth said, maintains close to 60 miles of pathways and oversees school athletic fields. Housing is also a bogeyman for valley employers and the town and county are no exception.
“This is a really good project,” Ashworth said and, over the past few days, he’s said all of the overrun may not be gone.
Some he hopes to recoup from project delays. The contractor could be on the hook for paying $1,000 a day past deadline, which was April 13. If the project is finished on July 19, as Ashworth said it’s on track to be, those funds could amount to $97,000.
He also hopes to get $119,650 back from the last-minute change orders through insurance for errors and omissions that he contended were the responsibility of the project architect.
But while Councilor Arne Jorgensen echoed that the Snow King facility was a good project, he said the overruns had an opportunity cost. The $735,000 bill will be paid primarily from a capital reserve fund and a fund for employee housing.
“We’re going to be unable to provide additional employee housing for additional units and I don’t want us to lose track of that,” Jorgensen said. “Yes — we’re finding a way to make the money work and to balance it out, but it’s coming at an incredibly lost opportunity.”
The town and county expressed interest in finding out what went wrong and better managing construction programs going forward.
Concerns were raised about issues with the Snow King project’s contractor, Record Steel and Construction Inc. of Boise, Idaho, and the architect, Dubbe Moulder Architects of Jackson. Omissions in the bid, and the complexity of the project, which balances industrial, residential and commercial elements, were two.
But discussion also pointed towards issues on the government’s side.
One was who was managing the project. Ashworth was playing a bit of double duty. Going forward, he recommended hiring an owner’s representative and construction manager.
“Trying to be your Parks and Rec director and trying to be a construction manager, is that necessarily in the best interest of the town, county or myself?” Ashworth asked Monday.
Cost was also an issue. The Snow King project contract went to the lowest bidder.
“We seem so committed to the notion that we have to accept the lowest bid,” Commissioner Mark Newcomb said during Tuesday’s meeting. “Maybe the higher bid knew better.”
The town ultimately approved paying its $735,000 and tacked the expense onto a budget amendment for the 2020 fiscal year that was approved later that night.
Stanford was the lone dissenting vote but others weren’t happy about giving the bill a yea.
“This is a good project, and I want to see it finished and come to fruition,” Vice Mayor Hailey Morton Levinson said, adding “I’m very annoyed by the situation. We really do need to come back and figure out how this won’t happen again.”
The county also approved the additional expense as commissioners began making other plans.
“I kind of think we need to have a review — two electeds from the county, two electeds from the town, necessary staff — to drill into these two projects and really understand what didn’t go right,” Commissioner Mark Barron said.
The other project on Barron’s radar was Fire Station No. 1, where demolition turned up a costly surprise — parts of the original structure at 60 E. Pearl that designers and carpenters had planned on keeping were missing vital steel and rebar.
The rebuild of the main fire station will now take longer than planned and cost significantly more.