UNcommon Sense: Interest rates cost MPS construction funding
This week’s article will be a brief update on our 2022 bond project. As far as the prep work to begin actual construction, we are currently on schedule. If you have driven past
the high school and middle school campus, you have seen the dirt work is close to being completed.
You may have also noticed the grass area east of the administration building has recently been covered with gravel. The construction area at the high school has already taken over 60 parking spaces which made finding replacements a priority. The area had most recently been used by our high school band program for marching practice.
During the high school construction phase, the band program will be having classes at the middle school band room.
Once the high school construction is completed, the band will move into the new Performing Arts Center. Before this occurs, we will develop another area for their marching practices on the high school campus. This example illustrates the give and take process which will be taking place as all our projects move forward.
We are working to finalize architectural drawings on our Performing Arts Center, High School Classrooms, and some of our Outlaw stadium additions (Phase Two). As I shared previously, the historic increase in interest rates lead to our losing $1.7 Million in construction funds. The rate was just increased again, marking the sixth time in 2022
this has occurred. The 1980s is the last time the Federal Reserve has increased rates at these increase amounts.
Additionally, our Phase One bids on the two Saferooms and Wrestling Facility came in $1 million over the estimated budget when the bond was first proposed. This overage was due to the sharp increase in the cost of materials and construction costs. Collectively, the current economic climate has put our overall project budget in a $2.7 million deficit as we start. If our national economy dips into a recession, this will only make our position worse. We must move ahead cautiously.
Put plainly, there is no way we can build all the proposed projects to the scale and finishes as first designed. I know this is not news any of us want to hear, but it is our reality.
So, what are we doing to address this issue? We have been meeting regularly with the construction manager and architects. These meetings have led to our identifying ways we
can create cost savings but not reduce the usability of buildings.
For example, the original design of the two Saferooms had a large glassed-in vestibule on the front. The vestibule area primarily served as an enclosed entry, which in a perfect budget scenario would be great to have. In our budget situation, it was determined these entries added roughly $180,000 cost to each of the Saferooms. By removing these, we were able to save a minimum of $360,000 in construction costs. Even with this change, the Middle School and High School Saferooms will maintain their same occupancy levels and safety rating. The money saved can now be utilized in other areas of our overall project to help get us back on budget. This is the type of approach we are taking to move ahead cautiously and thoughtfully.
What I hope everyone takes from this example is we are doing everything possible to deliver on the original goals of the bond project. At the same time, our approach means some aspects of the project may look or be addressed differently than first planned. Our response to the budget challenge is simple: get quality construction completed which
meets the district’s needs but does so by remaining financially responsible. I believe we are on a pathway with the best chance to get us to that goal. There are certainly more
challenges that lay ahead. While these may prove difficult, they are not impossible to address.
Your trust has always been a vital part of our success as a district. I am committed to be as transparent as possible about our budget realities. In doing so, I hope to
maintain the trust you placed in the school’s leadership back in February 2022 when the bond package passed.
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