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Tonight: Atherton council to discuss budget, civic center costs

Also on the agenda -- committee appointments and San Carlos Airport letter

Atherton's City Council meets tonight, June 21, to discuss adopting a 2017-18 fiscal year budget with $13 million in general fund spending.

Also on the agenda are: how to reduce costs for the new civic center, town committee appointments, and a possible letter to San Mateo County about San Carlos Airport operations.

The meeting starts at 7 p.m. in the town's council chambers at 94 Ashfield Road.

The council has discussed its budget in four study sessions. The $13 million in planned general fund spending would be 5.1 percent more than was spent in the 2016-17 fiscal year. General fund revenues are projected to be $14.3 million.

The council will also discuss ways to reduce the costs of its new civic center. A staff report says that project manager Mack5 has suggested that bids could come in up to 10 percent higher than its most recent estimates.

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The report gives the council a list of ways that costs could be reduced, ranging from delaying the construction of a new council chamber to using asphalt shingles instead of clay tiles on the new office buildings and planting only grass in lieu of other landscaping.

See the meeting agenda and staff reports on the town's website.

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Tonight: Atherton council to discuss budget, civic center costs

Also on the agenda -- committee appointments and San Carlos Airport letter

by Barbara Wood / Almanac

Uploaded: Wed, Jun 21, 2017, 11:59 am

Atherton's City Council meets tonight, June 21, to discuss adopting a 2017-18 fiscal year budget with $13 million in general fund spending.

Also on the agenda are: how to reduce costs for the new civic center, town committee appointments, and a possible letter to San Mateo County about San Carlos Airport operations.

The meeting starts at 7 p.m. in the town's council chambers at 94 Ashfield Road.

The council has discussed its budget in four study sessions. The $13 million in planned general fund spending would be 5.1 percent more than was spent in the 2016-17 fiscal year. General fund revenues are projected to be $14.3 million.

The council will also discuss ways to reduce the costs of its new civic center. A staff report says that project manager Mack5 has suggested that bids could come in up to 10 percent higher than its most recent estimates.

The report gives the council a list of ways that costs could be reduced, ranging from delaying the construction of a new council chamber to using asphalt shingles instead of clay tiles on the new office buildings and planting only grass in lieu of other landscaping.

See the meeting agenda and staff reports on the town's website.

--

Comments

anonymous
Atherton: Lindenwood
on Jun 21, 2017 at 12:26 pm
anonymous, Atherton: Lindenwood
on Jun 21, 2017 at 12:26 pm

Do it once, do it right. Don't keep trying to cut corners on the new Civic Center. Build it so it will last. Putting in lawn defeats the purpose of trying to achieve LEED status. And asphalt shingles on the town hall? Really? Pretty sure Spanish/Santa Barbara style architecture doesn't call for asphalt shingles. Raise the money privately for the cost difference, or take on some debt. In the long run it will be cheaper than having to replace cheap roof tiles or dead lawns.


Coincidence
Atherton: West Atherton
on Jun 21, 2017 at 12:46 pm
Coincidence, Atherton: West Atherton
on Jun 21, 2017 at 12:46 pm

Just after the anemic vote and costs already up 10%. The opposition group was right.


Rocket scientist
Atherton: West Atherton
on Jun 21, 2017 at 1:21 pm
Rocket scientist , Atherton: West Atherton
on Jun 21, 2017 at 1:21 pm

It is totally predictable that costs would be higher than Town Council estimates. Other predictions that will come true are:

1. Actual costs will be higher than the bids.
2. The Town will either take on debt or push out road and drainage maintenance and improvements. Likely both.
3. The high level LEED target will result in excessive spending that will never pay for itself.
4. Town Council will propose increasing the parcel tax once the project is started, citing increased personnel costs as the reason.
5. The Town Council is just putting window dressing on trying to save costs. They will chose to do none of the suggested cost cutting measures.


George Rodericks
Registered user
Atherton: other
on Jun 21, 2017 at 1:34 pm
George Rodericks, Atherton: other
Registered user
on Jun 21, 2017 at 1:34 pm

On June 21, 2017, the City Council is reviewing possible deduct-alternates to be added to the bid documents before the project goes out to public bid in November/December 2017. By adding the possibility of deduct-alternates in the bid documents, the City Council retains the ability to reduce the project scope if bids come in higher than anticipated.

By State law, the public bid process requires that the Town provide all bidders the opportunity to bid on all components of the project in equal fashion in an open and public bid process. Once bids are received, the Town is required to award the bid to the lowest responsible and responsive bidder or reject all bids. The Town cannot amend the project after the public bid period closes and before selecting a contractor based on the cost estimates, unless the potential amendments were included in the bid document and bid upon by all bidders equally. By having deduct-alternates in the base bid, the Town retains the ability to reduce the scope of the project without having to go through the added cost of re-design and re-bid - which would be required by law. If deduct-alternates are not added to the base bid and a bid award was made, to change the scope of the project moving forward, the Town would be required to go through a re-design and change-order process (negotiation with the contractor) which adds to the overall cost of the project.

The estimate for the project has not increased. As of May 25, 2017, the estimated base construction cost for the City Hall/Administration/Police Building is $17,956,000 ($437/SF). Site improvements associated with the new building are estimated at $4,387,000 for a total cost of $22,343,000 ($543.77/SF). The estimated base construction cost for the Library is $9,528,000 ($231.89/SF) and renovation of historic Town Hall (for the Library) is $1,156,000 ($28.13/SF). Site improvements associated with the new Library are estimated at $4,283,000 for a total cost of $14,967,000 ($364.26/SF).

The Cost Model Manager for the project can be found as part of the staff report online: Web Link For more information regarding the Civic Center Project, feel free to contact me directly at [email protected]


Huh?
Atherton: other
on Jun 21, 2017 at 2:31 pm
Huh?, Atherton: other
on Jun 21, 2017 at 2:31 pm

@Rodericks – your post makes it seem very theoretical that costs could go up ("the City Council retains the ability to reduce the project scope if bids come in higher than anticipated", "By having deduct-alternates in the base bid, the Town retains the ability to reduce the scope of the project without having to go through the added cost of re-design and re-bid - which would be required by law.").

Yet, the Almanac's article states (just two weeks after the vote): "project manager Mack5 has suggested that bids could come in up to 10 percent higher than its most recent estimates."

Some questions for you now that you've been responsive enough to post here:

1. Was the fact that bids were likely to come in up to 10% higher than planned known before the vote? If so, why wasn't this disclosed to voters?

2. Yes or no, does it appear to you that costs are going to be higher than originally planned for this town center?

Straight and to-the-point answers are in the best interests of the residents. We don't have time to decipher state law and lengthy analyses of theory.

I must admit, the opposition group probably nailed what was going to happen here. It was predicted. I don't even think they thought it would happen this fast, though. This is why the answer to question #1 is so important.


George Rodericks
Registered user
Atherton: other
on Jun 21, 2017 at 3:10 pm
George Rodericks, Atherton: other
Registered user
on Jun 21, 2017 at 3:10 pm

@Huh?

Thanks for the feedback. Happy to address your questions as much as I can.

1. Was the fact that bids were likely to come in up to 10% higher than planned known before the vote? If so, why wasn't this disclosed to voters?

Short answer is YES and IT WAS. It was anticipated that bids could come in higher and YES - it was disclosed to voters. The "all in" number ($50m+/-) that was discussed publicly in all the articles, on the Town's website, in Staff Reports, and in the opposition argument INCLUDES contingencies for the potential of higher than anticipated bids.

The ultimate bid amounts are largely dependent on the construction market at the time of bid. Since the Town hired Mack5 as one of the project consultants a few years ago, the Town has included contingency amounts in all of the cost estimate documents - all publicly available on the Town's website. These contingency amounts come in varying amounts and categories. Some are related to the potential of cost escalation from the time the original plans were still in design to the time they are estimated to actually go out to bid, some are related to the potential of design change orders, and still others are related to construction itself. Most were incorporated into the overall potential cost using a percentage. In other words, if the estimate for base construction cost was $10,000,000, the cost estimate had the base construction cost plus another 5%, or 7%, or 10% of that cost added for the particular contingency area. All professional estimators will include contingency amounts within their cost estimates since at the end of the day, an estimate is, despite their professional expertise, an estimate - largely dependent on market conditions at the time of bid. So, bottom line is YES. It was known before the vote on Measure A and the cost estimates provided publicly included contingency amounts for potential design changes, cost escalation due to market timing, and change orders post-contract. There is an FAQ on the Town's website that talks to the point of contingencies. Web Link

2. Yes or no, does it appear to you that costs are going to be higher than originally planned for this town center?

It's really both YES and NO. Based on the current construction climate - yes, some bid areas may be higher than originally planned (that's why there are some built-in contingencies). How much higher (or lower) is dependent on the particular trades (electrical, roofing, concrete, etc.) and the market conditions. Some will be higher and some will be lower. For example, the Town just bid a project for street improvements (asphalt, paving, striping, with some electrical and signal work). That project came in 35-40% higher than anticipated. Two weeks later, we bid another project for street light replacement (poles, electrical, painting, etc.) and that project came in under what was anticipated. Analyzing the detailed results showed a difference in particular trades and the demand based on market timing for those particular trades.


Peter Carpenter
Registered user
Atherton: Lindenwood
on Jun 21, 2017 at 3:16 pm
Peter Carpenter, Atherton: Lindenwood
Registered user
on Jun 21, 2017 at 3:16 pm

George - Thank you for participating in this discussion and for providing important facts.

Social media will kill this project unless you and the Council participate in these exchanges.


Coincidence
Atherton: West Atherton
on Jun 21, 2017 at 3:21 pm
Coincidence, Atherton: West Atherton
on Jun 21, 2017 at 3:21 pm

Correction: social media won't kill this project. Out of control costs and the council not responding to the lack of 2/3 support will.


Huh?
Atherton: other
on Jun 22, 2017 at 10:05 am
Huh?, Atherton: other
on Jun 22, 2017 at 10:05 am

@George Rodericks – thanks for the reply, but despite the many words, you haven't conveyed much information

Yes, we know some estimates will come under, some over. That's going to be true in any large project. The question being asked is whether IN AGGREGATE, this project is going to be more expensive than originally planned. Your project manager Mack5 didn't seem to find the need to equivocate about some bids lower, some bids higher. They're saying overall, it's going to be 10% higher. Just two weeks after the vote.

As city manager, do you believe this project is going to come in at the original bids (in aggregate), or not? If not, how much higher is the ceiling you'd put on where you see this going.

I imagine some council members are putting a lot of pressure on you to tow the line and be an ambassador for this project. But the residents deserve frank disclosure, not political campaigning. You're not a politician.


George Rodericks
Registered user
Atherton: other
on Jun 22, 2017 at 10:14 am
George Rodericks, Atherton: other
Registered user
on Jun 22, 2017 at 10:14 am

@Huh?

The answer is we don't know because it depends on the bid climate 5 to 6 months in the future. Mack5 did not say that the project is going to be 10% higher. Mack5, staff and the Project Management Ad Hoc Subcommittee of the Civic Center Committee advised the Council that we should prepare for the possibility that bids may come in higher than anticipated by including deduct alternates in the project design to allow the Council to scale down or defer items as necessary once the final bids are received and before the project is awarded to the contractor. When asked for a target for those deducts alternates, the group recommended 10% of the project construction estimates.


Peter Carpenter
Registered user
Atherton: Lindenwood
on Jun 22, 2017 at 10:22 am
Peter Carpenter, Atherton: Lindenwood
Registered user
on Jun 22, 2017 at 10:22 am

"I imagine some council members are putting a lot of pressure on you to tow the line and be an ambassador for this project. But the residents deserve frank disclosure, not political campaigning. You're not a politician."

That is an irresponsible comment since you have no evidence to back it up -"I imagine".

Rodericks is providing factual information and is not engaged in political campaigning.

We seldom see public officials posting on this site and it is unwise to discourage them from doing so by posting such irresponsible comments when they do post.


Huh?
Atherton: other
on Jun 22, 2017 at 10:35 am
Huh?, Atherton: other
on Jun 22, 2017 at 10:35 am

@Peter – I'm entitled to draw my conclusions from the responses. I didn't state them as facts. The more salient point here seems to be, after pulling the teeth I was forced to pull, George has (truthfully) admitted we have no way of knowing how large the costs of this project are going to snowball into. Why didn't that go into the packet that was sent to voters?

Just two weeks after the vote, the project manager says 10% more. And "I IMAGINE" we're going to keep seeing costs go up as the time to have gone for voter permission is with firm, fixed bids.

I also IMAGINED when the private donations weren't materializing that the committee and council should have disclosed to voters that the donations weren't meeting quota and they would likely need to put a hand out to the public to pay for this, to encourage more public participation. This IMAGINING proved correct.

But no need to IMAGINE that two weeks in, the project manager is saying plan on another $5.3M of taxpayer money to be spent. Whether my IMAGINATION about costs continuing to rise proves true or not is a matter of time playing out, but we can certainly revisit the accuracy of various IMAGINATIONS when and if they do.


Apple
Atherton: other
on Jun 23, 2017 at 7:49 pm
Apple, Atherton: other
on Jun 23, 2017 at 7:49 pm

@Huh

It's pretty clear your questions have an agenda, just trying to troll for ways to fight the town center project. That is my conclusion from your statements. And I IMAGINE we're all entitled to our own conclusion, of course.

Construction costs always go up the longer you wait. It's called inflation. If the construction market gets hotter, prices will go up even more. If it gets cooler, prices will slow their increase or fall. No one ever knows for sure. Even the best economists will have a hard time making an accurate prediction.

With respect to fundraising, there's three years left to raise money. But due to inflation construction costs generally get more expensive over time. What Measure A said is merely general funds will backstop any fundraising shortfall.


Coincidence
Atherton: West Atherton
on Jun 23, 2017 at 9:10 pm
Coincidence, Atherton: West Atherton
on Jun 23, 2017 at 9:10 pm

Apple, everyone posting here and involved with the project has an agenda. The people on the committee, the opposition, the town council and manager. I can't see how the people who oppose it have a conflicted agenda since they have nothing to gain from the project not being built (other than satisfaction that their opinions prevailed; but no monetary or other remuneration).

What seems objectively troubling to me is that just days after the vote, the project manager is saying brace for increased costs. Come on. They didn't know that before the vote took place? What seems to be missing here, at least in the posts (dunno about in people's heads) is the inference that the council/committee is doing a bit of a snow job on the residents. Now that might be considered a conflicted agenda.


Coincidence
Atherton: West Atherton
on Jun 23, 2017 at 9:13 pm
Coincidence, Atherton: West Atherton
on Jun 23, 2017 at 9:13 pm

(Sorry, hit submit before pasting this).

"What Measure A said is merely general funds will backstop any fundraising shortfall."

Yes, but it clearly advocated this in the context of a cost number that residents needed to evaluate in terms of whether or not to support the measure.


Apple
Atherton: other
on Jun 24, 2017 at 11:27 am
Apple, Atherton: other
on Jun 24, 2017 at 11:27 am

@Coincidence

I realize everyone has an agenda. I called out @Huh because impugning character is not necessary. Both sides can advocate what is in the best long term interest of Atherton and its citizens without personal attacks.

What was over the line was Huh's attack on George's and the council's integrity. George answered Huh's questions, which corrected several misconceptions Huh had. Huh then accused George of being nonresponsive. Then, he claimed George only acted politically without integrity, which @Peter also pointed out.

With respect to cost estimates, George said the current $50M+/- estimate include contingencies. It doesn't sound like the project estimating company came out with a newer study right before the election. I'm not surprised. I took a look at the current one and it's loooooong. If there is a newer study, Atherton should publish it.

But what it sounds like is the cost estimator asked the town to prepare for the possibility 10% may actually be needed. I don't know if the cost estimator feels construction costs have risen faster than expected since the estimate or they tell every client this. Better to be safe than sorry, I suppose. The current direct cost estimate is $44.2M. 10% more would make the number $48M.


Name hidden
Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle

on Jul 23, 2017 at 8:43 am
Name hidden, Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle

on Jul 23, 2017 at 8:43 am

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Name hidden
Atherton: West of Alameda

on Sep 26, 2017 at 11:09 am
Name hidden, Atherton: West of Alameda

on Sep 26, 2017 at 11:09 am

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