The aftermath of the 2005 Gulf Coast hurricane season is reaching as far as Juneau's school construction budget.
The projected budget for the Mendenhall Valley high school has increased by $2.29 million since the last draft was completed in May, at the end of the schematic phase. The new projected budget is $38,246,000 - up from $35,958,000.
Juneau School District and city officials said the budget is a moving target. They said they will not know what the final construction costs will be until bids are completed. Bids will be advertised in February and will likely open in early- to mid-May, project manager Sarah Lewis said.
The increase in the projected budget is largely collateral damage from the 2005 hurricane season, with an increased demand on construction materials and fuel causing price markups virtually across the board.
"All shipping is raised considerably ... but when you look at the fuel being used by the contractor to build the building, that raises too," Lewis said. "So all of that has to be taken into account."
Lewis is not surprised by the increase in the budget because she has seen prices of certain materials rise over the last several years. The natural disasters this year have only created more demand and less supply. She said the bid could be lower or higher than the current projection.
"You really don't know what it will be until the bid comes in," Lewis said. "All we can go by is estimates up to that point."
"It's not a surprise given the current markets for construction after Katrina and the inflation caused by oil prices that the budget estimate came in higher than we had initially planned," Superintendent Peggy Cowan said. "But I'm confident that the project team will have a decision that will enable us to continue with the project and be on schedule."
Cowan said the School Board Facilities Committee will investigate what money might be left over from other projects or generated from interest-bearing accounts. She said the district is waiting for numbers and will examine school project budgets before making proposals to the high school project team.
The design team and project team have discussed reducing the construction contingency from 10 percent to 7.5 percent, which would reduce the projected budget shortfall from $2.29 million to $2.22 when other related costs are factored. The project has multiple contingencies, with money set aside for unforeseen budget costs.
Assembly member Jeff Bush, a member of the high school project team, said the inflated budget projection will not be a burden on the shoulders of the city.
"The shortfall of $2.2 (million) would be subject to state match at 70 percent, so in fact if the city comes up with about $700,000, the rest would be coming from state match," he said. "So really the shortfall from the city's perspective is less than a million dollars right now."
Bush said it is too early to know if the scope of the building will be reduced, or whether the city will have to come up with extra money to fill in the hole in the budget.
"If the bid came in at $2 million or so below projections we would be in good shape, but it's still too early to know," he said.
Lewis said the design of the building has been significantly reduced since the voters rejected $62 million in bonds in May 2004 for a 1,080-student school. In October 2004, Juneau voters authorized $54 million in bonds to build a reduced-sized school with a capacity of 840 students, which falls under the 70 percent reimbursement plan with the state. She said the design has been meticulously combed over and it would be a disservice to the school to reduce it further.
Lewis said the overall projected budget, including furniture and the site preparation, is more than the voters approved in bonds last year.
The site construction, which had a bid at $4,240,092, is on schedule after some initial delays and will be completed by the July 15 goal if progress continues as planned.
Bush said he believes everything will work out.
"I think it's going fine," he said. "Admittedly we have a shortfall that we will have to deal with, but I'm optimistic that there will be a solution found."