The latest estimate for construction of the Dimond Park high school is $1.7 million over the budget.
Estimators cited a possible 5 percent rise in labor and material costs, due to inflation, between now and the opening of construction bids in January 2006.
Before deciding how to balance the budget, planners will wait for bids on the site work in May and a more refined construction budget in June.
"It's an early estimate for an early design," said Sarah Lewis, a city project architect. "It lets us know we need to be very, very cost-conscious as we design the school further."
On Thursday, city and school district officials planning the school approved a total budget of $54 million, the amount of bonds granted by local voters last fall. The state is expected to reimburse 70 percent of that.
The 166,000-square-foot school in the Mendenhall Valley would serve about 840 students at capacity. It is scheduled to open in August 2008.
The construction budget is $38 million, of which $33.2 million is for the building and $4.6 million is for preparing the ground. About $200,000 goes toward permits and utility fees.
The latest building-construction estimate, which the city presented to the planning team Thursday, was for about $35 million.
The estimate is based on what's called conceptual design, a stage in which space is allotted by function, such as gyms, administrative offices and different types of classrooms.
The next stage, schematic design, contains more details and should be completed in early May, said architect Paul Voelckers of Minch Ritter Voelckers of Juneau.
The next cost estimate should be available in early June, Lewis said.
Planners also will know by then the cost of preparing the site. Bids are scheduled to be opened May 9 and work would take place this summer.
If the project is still over budget in June, planners will have to look at saving money by cutting space or finding more funds.
Sometimes the city reallocates leftover money from one school construction or renovation project, once it's nearly completed, to another one.
The Valley high school's budget also includes $5 million in contingency funds, intended to cover unexpected expenses. The estimating firm itself included another $2 million as a contingency.
But it's unlikely the planners would commit those funds to cover a high cost estimate in June, Lewis said, "because it's still so far out until we bid it" in January 2006.
The planning team meets again at noon on May 12 at the downtown fire hall.
Eric Fry can be reached at firstname.lastname@example.org.