But lower costs in other areas keep overall price tag in
check
GILROY
Steel prices for the new Christopher High School have increased more than 50 percent since estimates were projected in June, but the gap between available funds and project cost still hovers around $15 million.
Gilroy Unified School District Board of Trustees awarded the CHS steel bid to Roswell, Ga.-based Cives Steel, at $4.4 million over the original estimated budget of $8.5 million.
Lee Sullivan, an estimator for the project’s general contractor Gilbane Building Co., said steel prices have increased due to a number of market factors. The district’s estimates were projected during a period of relative calm, after an early 2007 spike in steel prices leveled off. However, the global demand for steel is expanding and China, once a major exporter of steel, is now importing steel to meet its own high demand. The estimated cost for the CHS steel bid reflects the local effects of a diminished supply of low-cost Asian steel. Rising fuel prices also contribute toward the higher-than-expected cost for the project’s steel, Sullivan reported.
Due to the “extremely volatile price” of steel, Steve Brinkman, assistant superintendent of administrative services, expressed the need to “get moving on” this specific bid package.
Now that 90 percent of the 24 bid packages have been awarded, the remaining few will be settled at the Dec. 6 board meeting. Despite increasing costs, the design of the $391-per-square-foot high school has not been compromised, said Henry Amigable, Gilbane’s vice president.
The project team, consisting of the architect, district staff, and Gilbane, has attempted to close the gap between identified funding sources and estimated project costs. While project estimates continue to increase, additional state funding has kept the amount of the funding gap at about $15 million. Additionally, the board of trustees approved the borrowing of up to $18 million in the form of certificates of participation as a means of closing the gap. Also, the district managed to drive down costs on other bid packages, bidding out the high school’s site work at $3.5 million below the allotted $11.1 million.
Board members expressed concern over the rising costs.
“As a taxpayer and a boardmember, I’m very alarmed … where does it end?” Trustee Denise Apuzzo asked of the project team. “It’s creeping up on $400 per square foot. My head is spinning every time I look at these numbers.”
Amigable assured the board that, with only four packages left to bid, the project team didn’t expect any more major hits to the project’s budget.
