WOODMERE — The Village Hall renovation project will stay on budget, village Engineer Ed Hren told the Finance Committee last week. With three recent change orders, Mr. Hren said that the new guaranteed maximum price, also called GMP, is about $694,000.
“I’m very optimistic that we’ll be under the revised GMP,” Mr. Hren said.
After nearly $50,000 worth of change orders on this renovation, members of the Finance Committee discussed on Sept. 3 how to save money on future projects.
Councilman Craig Wade asked why the language of the contract with Infinity Construction says “guaranteed maximum price” when in reality, the price can increase when there are unexpected issues during the renovation.
Mr. Hren said that the contract is written based on the expected work, and the renovation was designed by Village Architect Calvin Singleton. According to Mr. Hren, a renovation is more challenging in this sense than building a new structure because a vacant lot does not have existing sewers, heating, ventilation and air conditioning or electrical work that could be problematic.
“We take our best guess, that’s just how things are,” he said. “These things were unexpected.”
Mr. Hren added that in the future, the village could write the contract to make the construction company responsible for any problems encountered during the renovation. Mr. Wade asked if contractors might pad their bids to cover unexpected fixes.
Mr. Hren explained that he has a section in every contract that reviews how the village will pay the contractor for unexpected work, either through time and material or working through a cost proposal.
If a contractor “gets burned” financially on a village project, he said, then for the next job others could pad their bids by as much as 15 percent and “you’re basically paying for it whether you use it or not.”
He also clarified that the contractor would not likely reduce the price of the contract if there are no unexpected problems. Mr. Wade asked if it would make sense for the village to add 10 percent to 12 percent to the cost of every project, then determine if the village could afford the project. Mr. Hren agreed and said that it would “make sense from a budgetary perspective.”
Council President Jennifer Mitchell Earley asked how much money the village has for phase two of the renovation, which includes expanding the fire department into the former police department. Treasurer Rhonda Hall explained that the village has $260,000 available for phase two, which is expected to cost $184,279, according to an early estimate from Infinity Construction.
Ms. Earley explained that when something unexpected comes up in the renovation, it is best for the village engineer and architect to discuss this with council.
“I’d rather be informed than you make an assumption that we are going to stay hard-nosed to a dollar figure as opposed to making sure that we have something that’s going to be functional for the department long term,” she said.
The Village Hall renovation is set to be completed by Thanksgiving.