The budget for the new Tullahoma Police Department has grown by nearly $1 million, while the square footage has decreased, according to city officials.
Despite the city board’s December 2017 approval of a $3.25 million budget for the design and construction of the new police headquarters, City Administrator Jennifer Moody told the board during its Monday night meeting that the original design and budget for the building were now out of date and needed to be revised to reflect current market costs.
According to a memo from Moody to the board, construction cost increases have necessitated both the redesign of the building and a revision of the budget. The currently proposed budget for the project now stands at $4.2 million.
The original plan for the new headquarters was to design a 14,000-square-foot, two-story building for $3.25 million with costs including design, construction and “project contingency.” Funds were borrowed through a Tennessee Municipal Bond Fund loan that was approved in October of 2017.
The loan set up $238,875 for engineering costs, $2,848,625 for construction costs and a “project contingency” fund of $162,000.
The city entered into an agreement with the Crossville-based Upland Design Group for the engineering and design portion of the project. Upland Design Group has worked in the city previously, both for the expansion of the Beechcraft Heritage Museum and the recent expansion of L & H Distributing Company.
According to Moody, there was no mention of “owner costs” in the original budget for the project and that oversight has been corrected. According to the memo Moody sent, owner costs include items such as “furniture, finishings, equipment; IT and telephones, building security related items, state permits or other construction-related fees and the fees for owner representation services.”
Moody states in the memo that owner costs are currently projected at $875,000.
In Moody’s view, the memo states, it would be better to start over at this point in the process – the design phase – instead of having bids come in over the original budget amount.
Moody said at the meeting that the city was nearly ready to go to bid on the project when she realized it would be overbudget.
With that in mind, Moody said she would prefer to hit pause on the proceedings and start again at this stage, rather than wait for too-high bids to come in and have to try to construct a building with smaller confines.
Now the proposed budget is set at $4.2 million, which includes $350,000 for design services, including the complete redesign of the facility; $3 million for construction; $275,000 for additional site work and parking improvements; and $575,000 for owner costs and contingencies.
The proposed facility would also be just 10,000 square feet in size rather than the originally proposed 14,000 square feet.
“The redesign intends to keep many of the same priority features of the design that [the board was] presented with in December 2018 while eliminating some features that would not have been used frequently,” the memo states. The features eliminated in the redesign could also be provided by other city facilities or could be used as add-on features in the future as funding allows, the memo states.
One feature that was worked into the new plans was to increase site work to better address issues with the current public parking area behind the existing police department.
“The proposed additional site work would be designed with retention walls to improve drainage of stormwater from the parking lot and reduce the steep slope of the parking lot,” the memo states.
The higher price tag can still be funded through the TMBF loan approved in October 2017, though there is also the chance that more funds could be pulled from the city’s capital projects fund if necessary, according to Moody.
Alderman Ray Knowis had great concern for both the increase in the budget and the reduction in size of the building when it was brought up on Monday night.
He repeatedly questioned Moody on why the size was reduced, why the budget had increased by almost $1 million and where the previous budget originated.
“The budget was $3,250,000 for a 14,000-square-foot facility. We now are proposing to reduce the size to a 10,000-square-foot building and increase the budget to $4,200,000,” Knowis said. “Just a quick calculation on that says we will reduce the size [of the building] by 28 percent, yet we’ve increased the price of it by 29 percent.”
Knowis said he fully approved of providing local law enforcement with a new facility, but wanted to understand the new numbers Moody was proposing.
“I’d like to know where the first budget came from that we approved, and why it’s so far off,” he said. “There are some things here I don’t understand. I’d just like to have a better understanding.”
Despite raising concerns about the project changes, Knowis said he didn’t want to be construed as an “obstructionist.” Rather, he wanted to make sure the city was using taxpayer money responsibly.
Moody countered by citing the personnel changes the city had gone through since December 2017, the rise of construction materials and labor costs and rough estimates as some contributing factors for the changes.
Moody said she felt the original budget did not properly break down some costs, including “soft costs” like owner contingencies. She credited the original budget with coming from the architect of the project rather than any contractors.
“Architects are notorious – they’re not contractors,” she said, calling the original estimates “just a rough order of magnitude.”
“Until you go to bid, you don’t have actual costs,” Moody said.
Another factor is the age of the figures, she added. In the two years that the city has been working on the design phase of the building, the construction market has exploded, becoming “very competitive right now.”
Additionally, Moody said the change in leadership contributed to the different figures. With her background, Moody said, she wanted to present the board with a more detailed and accurate picture of the scope of the project, which is why the new budget is broken down differently.
Redesigning the building also comes at a price.
“Design services are going to be more because we’re going to have to redesign,” Moody said. “We’re at a full set of plans, but for a building that we can’t afford to build. I’m sure there’s going to be additional design fees related to redesigning the building to a smaller footprint.”
Another additional cost is the hiring of an “owner’s rep,” Moody said. That was a previously unknown expenditure, she said, because it was only a decision made once she had become city administrator.
Having an owner’s rep would be a positive for the city, according to Moody.
“Just having the opportunity hire an owner’s rep … I think will, from a project management standpoint, will save us time and money on the project,” she said.
What about another look?
Knowis asked if Moody had looked into coming to the architects from the point of view of asking what the city could build for $3.25 million, which Moody answered she had.
She and Mayor Lane Curlee had looked over a list of features that the original building included to see which ones they could remove from the project to lower the price, Moody told Knowis. However, neither felt comfortable removing a number of the features that contributed to the larger price tag.
“Some of those items we weren’t comfortable removing, and that’s why we looked at the square footage of the building and reducing the size of the building, but maybe keeping some of the features that we liked in the original plan,” she said.
Any further removal of features, Moody cautioned, would result in a “much smaller building” for TPD.
Moody said she has had multiple meetings with both the owner’s rep, Finance Director Sue Wilson and the architects at Upland Design Group to try to work the numbers back down, but ultimately concluded a complete redesign was necessary. She also said she was willing to speak with Knowis about the particulars on a one-on-one basis.
The resolution to increase the budget from $3.25 million to $4.2 million was approved unanimously.
Erin McCullough may be reached at email@example.com.