DISTRICT 51 GRAPPLES WITH HIGH BUILDING COSTS

On the Western Slope, $14.5 million will buy School District 51 an elementary school, but in Brandon, S.D., it could almost pay for two buildings.

And considering that Fred Assam Elementary School, under construction now in Brandon, is roughly twice the size of the proposed elementary schools that are part of District 51’s bond package on the November ballot, one could argue money goes four times as far in building a school in South Dakota as it does in Grand Junction.

“That’s just a tiny bit frustrating as a board member,” board of education member Ron Rowley said.

Skyrocketing construction costs on the Western Slope are not new to any school district across the western United States. But District 51 is grappling with a 1 percent increase a month on average in construction costs, so while inflation in South Dakota and Arizona has pushed prices up 5 percent annually, Grand Junction and Casper, Wyo., must budget for an additional 12 percent increase in cost, at minimum, when projecting costs for future projects.

“We’ve done a lot of work in that area, trying to nail down those projected costs,” said Cal Clark, District 51 director of maintenance.

The bond package budgets $84 million for two new high schools and $29 million for two new elementary schools that would open in fall 2010. The new elementary schools would most likely be modeled after Rimrock and Pear Park elementaries, Clark said, to save the district money on design costs.

Those schools, built with money from the 2004 bond, cost $130 to $159 per square foot to build, Clark said. Using those figures, the district is projecting the two new elementary schools, which would be roughly 49,000 square feet each, would cost $295 to $302 per square foot to build, Clark said, by the time they went to bid in August 2009. Square-foot cost for new high schools, at 124,000 to 150,000 square feet, would be a bit lower.

“This wasn’t a shot in the dark,” Clark said. “These figures reflect the true construction costs of our area, unfortunately.”

The Western Slope does not have the same depth of subcontractors as along the Front Range, where construction is slowing down, said Clark Atkinson, director of preconstruction services for the Grand Junction branch of Shaw Construction. His company has had to resort to bringing in work from outside Grand Junction to accommodate that need, he said.

“But the biggest inflation has occurred in products tied to energy,” Atkinson said.

Nationwide, Atkinson said, steel has tripled in price in the past five years and has increased by 55 percent from January to June alone.

Wyoming is experiencing a similar construction boom and lack of subcontractor availability to Grand Junction because of the influx of energy work, Atkinson said. The Natrona County School District in Casper, Wyo., is beginning a 10-year-plan to either replace schools or add new ones in the face of 18 percent annual construction inflation, said Dennis Bay, executive director of facilities planning.

“It continues to go up, but not near what it was six to nine months ago,” Bay said. “It was unreal. No one could figure it out.”

At that time, construction inflation peaked at 1.5 percent a month, Bay said, but that figure is down to 1 percent. The district was able to sneak a $14.5 million bid in for the new Cottonwood
Elementary, under construction now, before the peak and saved about $90,000, he said. Still, competition for contractors is such that a $16 million elementary school that opened this fall was budgeted for $165 per square foot in 2004 and ended up bidding for $238 a square foot in 2006, Bay said.

Growth has not been a problem in Arizona, said John Arnold, executive director of the Arizona School Facilities Board, which funds school construction in the state. In fact, the state legislature put a freeze on all school construction for the 2008-09 school year in part because growth across the state has slowed significantly.

In 2007-08, he said, the average cost of a K-8 school was $110.40 per square feet.

Prior to the freeze, Arnold said, cost increases in construction materials were offset by plummeting labor costs.

“There are plenty of contractors looking for work here,” said Dave Pappone, superintendent of the Brandon Valley School District in Brandon, S.D. “We feel we got a particularly good deal on our building.”

The district is building the Fred Assam Elementary School to stay ahead of projected growth in the area, Pappone said. The district timed its bid with contractors looking for summer work, Pappone said, and secured an even better price because the growth hasn’t happened yet. Thus, the need for the school was not dire.

The Jefferson County School District, Colorado’s largest, is also trying to stay ahead of projected growth with a November bond measure that would fund two new elementary schools, said Pete Doherty, executive director of facilities planning and design.

On one of those, Tamarisk Elementary, would not go to bid until 2011, and it’s completion date would be scheduled for 2014, Doherty said. The district is projecting $200 per square foot, but
Doherty said he isn’t sure that figure will stick because construction costs have spiked and calmed down several times since 2005. Inflation could be anywhere from 0.75 percent to 1.5 percent a quarter, he added.

“Everything is going up,” Doherty said. “It’s just a matter of tracking how fast.”

Atkinson said he thinks the “rampant price inflation” is due for a slowdown. Twenty percent of the escalation in materials cost is tied to price speculation on commodities markets, Atkinson said, and that has stopped in the faltering national economy.

In terms of the District 51 bond, he said, if it passed, bidding for the schools would coincide with the conclusion of construction on St. Mary’s Hospital and other large commercial projects around Grand Junction. That means the district could benefit from contractors looking for work.

“Talk about hitting the market just right,” Atkinson said. “The school district will hit that just right.”


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