Algonquin Regional High School Building Project, presented to:

  Prepared By:

  Northborough-Southborough Regional School Committee

  November 13, 2000

 

Executive Summary

  The Northborough-Southborough Regional School Committee proposes that a new approximately 290,000 square foot high school be built on land adjacent to the existing high school.  The purpose of this report is to provide information to aid in the evaluation of the proposal. 

   

Summary of Important Decision Factors    

• Current capacity of approximately 1,200 students will be exceeded in September 2003

     

• Any alternative course of action will cause at least a one-two year delay in project implementation due to the need for additional construction time and the need to re-submit the project to School Building Assistance for the FY2001 cycle.

     

• An Addition/Renovation has comparable costs and several substantial educational disadvantages.

     

• Dissolution of the Region would be a very time consuming process with many unknown factors which would have a substantial impact on the ultimate cost to the two communities.

   

• If the project is not funded the needs will not go away.  Additional costs for portable classrooms will be incurred which will not address the need for a permanent solution.  In the meantime construction costs will continue to rise as we wait to implement the ultimate solution to our high school enrollment needs.

   

•   A building project that occurs once every 40 years or so can reasonably be termed an extraordinary event under Northborough’s long-term debt policy.

 

Project Description

 

Design, construct and equip an approximate 290,000 square foot high school on land adjacent to the existing high school.  The design services are to include design of the necessary project and the preparation of necessary documents to enable project to be put to bid.

 

Project Costs

 

Design Fees $2,580,000

Construction $45,225,300

 

Construction costs include site development, sewer tie-in, furnishings & equipment, technology, parking and field construction, demolition and hazmat abatement of existing high school excluding the 1969 addition.

 

Project Need

 

The Northborough-Southborough Regional School Committee engaged the services of both NESDEC and H.C. Planning to calculate enrollment projections for Algonquin Regional High School.  Based upon the H.C. Planning report the peak population is expected to be 1,661 students.  As such, the project will be designed to accommodate 1600 students.  Further, the capacity of the current building is between 1,134 and 1,193 students (the latter being the temporary  acceptance of larger class size ratios averaging 22 students.) [1]  According to the enrollment projections, with either class size ratio assumption, this capacity will be met in the school year commencing September 2002 and exceeded in the school year commencing September 2003.

 

Priority Category Ranking

 

This project is a priority category ranking #1.

 

Due to the timing of the projected enrollment increases outlined above, this project cannot be reasonably postponed.  In addition, it addresses a problem that impacts the ability of the towns of Northborough and Southborough to provide a critically needed town program. If the project gains all necessary town and state approvals by June 30, 2001, the project is expected to be completed for the start of the 2003-2004 school year, just in time to meet the enrollment needs.  Any delays will require temporary solutions such as portable classrooms until a permanent solution is found resulting in unnecessary additional costs without any corresponding benefit.  Such temporary solutions would not address crowding in the core facilities such as cafeteria, gymnasium, fine arts facilities, and corridors.

 

Schedule of Implementation

 

Design Phase Begins-- December 2000  

Construction Begins -- August/September 2001

Construction Completed -- August 2003

 

Operating Costs

 

The impact on operating costs will not be affected by whether the project is approved or not.  The high school will still need to be staffed based on each year’s enrollment levels regardless of the solution that is chosen.  There is potential for operating cost savings in an entirely new building due to the energy efficiency found in new construction.  Further, when compared to a two-school solution, the operating costs for the new build option would be lower due to the duplication of fixed costs required in operating two separate facilities.

 

Extraordinary Nature of the Project

 

According to “The American Heritage Dictionary of the English Language”, extraordinary is that which is “beyond what is ordinary, usual or commonplace”. [2] The towns of Northborough and Southborough, as well as neighboring communities, have experienced tremendous growth in population in recent years.  This growth has resulted in numerous school construction projects to meet the needs of the communities.  Once these needs are met it will no longer be necessary to engage in additional school construction projects for many years to come.  Although this recent surge in school construction makes it seem that it is an ordinary occurrence, in the long range view it is something that occurs only once every 40 years or so.

 

Options

 

Option 1 --Revised New Build (Proposed Option)

 

Design & Construction Cost  $47,805,300

 

	@ 65%
Northborough Share	$17,966,933
Southborough Share	$11,230,154

 

Responding to feedback received from the communities, the Regional School Committee, requested that its architect, Keyes Associates, LLP review the project to determine if there were any cost savings that could be achieved by altering the plan without compromising the academic program provided at ARHS.  In addition, the Committee asked that the firm evaluate what if any portion of the existing building could remain without compromising field space and parking needs. Keyes reviewed the space in the current facility and determined the number of classrooms needed to provide the same program for a 1600 student population.  From the number of classrooms, square footage required was calculated based on State requirements for square footage per classroom and square footage per student for such areas as cafeteria, library etc.  This calculation results in the net square footage required.  Keyes determined that by moving to a three-story structure, and moving the District Offices out of the new building, the layout could be built more efficiently thereby reducing the gross square footage to 290,720 from 305,000.  Construction costs were determined based on current industry standards for cost per square foot for new construction.

To evaluate what portions of the existing building could remain, Keyes met with the High School principal and members of the Regional School Committee Building Sub-Committee.  The principal after consulting with the athletic director indicated that ideally the High School would need 15 fields in order to meet the needs of a 1600 student population.  However, 11 or 12 fields with several of them lighted for night use, would be manageable.  Based on this information, the Regional School Committee decided that the 1969 addition was the only portion of the building that could remain and provide the necessary field and parking space.   In addition, Keyes had indicated that the addition was in very good condition.  It would require some work on the plumbing and HVAC systems to make it a stand-alone building, however.  The architect has estimated that the cost to complete this work would be in the range of $200,000-$300,000.  During the design phase a more thorough evaluation of the needs of the 1969 addition will be undertaken in order to better evaluate the costs associated with keeping the addition intact. It has been suggested that the Central Administration could be housed on one floor with the remaining two floors available for use by outside entities on a fee basis.  Any costs incurred to put the building into service, as well as operating costs, would be factored into the determination of the fee.

 

Option 2 – Add/Renovate

 

Design & Construction Cost	$44,165,000
+ Portable Classrooms	+ $600,000
Total Cost	$44,765,000

 

 

	@ 65%	@ 60%
Northborough Share     Design & Construction     Portable Classrooms   Total Northborough	$17,614,503   + $454,316   $18,068,819	$19,845,316   + $454,316   $20,299,632
Southborough Share     Design & Construction     Portable Classrooms   Total Southborough	$11,084,071 $10,866,387   + $217,684   $11,084,071	$12,709,627 $12,491,944   + $217,684   $12,709,628

 

 

The costs for the add/renovate option were determined first by assessing the space requirements to provide the current program to a 1600 student population.  In addition, a thorough evaluation of the condition of the current facility was conducted to determine the extent of renovation needed for the existing facility.  These renovations were categorized as major or minor and an average cost per square foot was determined based on the mix of the needed repairs.  Costs for the new construction portion were based on industry standards for cost per square foot of new construction.  The add/renovate option will take longer to complete than Option 1, therefore it will not be finished in time to meet the capacity needs of the high school.  In addition, the SBA has advised all school districts that  “there is no longer an expectation or commitment that applications will receive final approval in the same year in which they are submitted.”  It went on to say “This will be particularly true in FY2001, as we have 78 project applications pending from FY2000.  Our limited staff resources, our need to complete work on these carryover applications, and our need to fully implement all of the new provisions of the SBA reform legislation, will have a significant impact on our ability to process newly-filed FY2001 applications in a timely manner.”[3]  A minimum two-year delay in project completion is anticipated with this option.  As a result, the need for temporary classrooms is anticipated.  Based on a review of anticipated space needs of the high school, it was determined that six portable classrooms at a total cost of $600,000 would be needed.  This cost was added to the cost of the Add/Renovate option.

Further, there are certain limitations inherent in a renovation and addition project which could be avoided with new construction.  According to the architect the limitations are the following:

 

• Inefficiencies in the layout of the current building would continue to exist and possibly exacerbated by adding to the sprawl of the high school.
• Because it would be the second addition to the original structure, it would effectively eliminate the possibility of any further expansion.
• While the administration and contractor can work to limit disruption to the educational process during the course of construction, a significant level of disruption would be anticipated as unavoidable.
• The cost predictability of a renovation project is much more difficult than with new construction.

 

While these limitations can be managed if this option was chosen, it is not the optimum solution.  In the unlikely event the project could be completed without the use of portable classrooms, the cost difference is so minimal that it is questionable that in the end it will in fact be less expensive than the revised new build given the lower cost predictability of a renovation.  Even if the costs were to hold true, one must ask if the slight savings achieved is worth enduring the limitations inherent with this option.

 

The uncertainty surrounding the state reimbursement rate is also a consideration of pursuing this plan.  The base rate for the Northborough-Southborough Regional District will be lowered to 49.9% for projects that are not grand-fathered under the existing rate.  It is possible that the rate will be increased through incentive points back to 65%.  For this to happen, however, the project would have to receive 15 of a possible 20 incentive points.  Note: the 20 points excludes points that would not be achievable.

 

Option 3 – Henries/Halloran Plan

 

Total Cost -- approx. $30,000,000

 

Northborough Share  -- approx $18,600,000 plus interest

Southborough Share  -- approx  $11,400,000 plus interest

 

The Regional School Committee asked Keyes Associates, LLP to evaluate the viability of the Henries/Halloran Plan.  According to the Architect, “The Henries/Halloran Plan proposes to create an expanded Algonquin facility by a process of selective additions, demolition and renovation to the existing building.  Essentially there is no difference between this concept and the concept developed by OMR three years ago.”  The original OMR plan analyzed by Keyes Associates, provides for the educational program for 1500 students (not 1600) using the required number of spaces, each space meeting the space requirements of SBAB.  When fully developed for 1600 students, this plan would utilize approximately 315,000 square feet of floor area combining both new and existing space at a total project cost of $43,565,000.  The Architect further states, “The design proposed by Mr. Henries and Mr. Halloran gains an apparent cost advantage by providing significantly less space.  However, there is no reason to believe that this solution could provide the required number and area of educational spaces utilizing much less square footage.  Fewer and/or smaller spaces would not meet SBAB requirements and would jeopardize State-assisted funding for the project.”[4] Based on this assessment that the Henries/Halloran plan would not provide for sufficient program space and that State Funding would be in question, the Regional School Committee rejected this option as a viable solution. The costs to Northborough and Southborough above do not include state reimbursement.

 

Option 4 – Dissolution of the Region

 

Total Cost – unknown

 

The ABPC estimated the total cost of renovating the existing high school to be $22,567,000.[5]  The estimate was based on the average cost per square foot for renovation used in Option Two.  As described under Option 2, this average cost was based on a detailed review of the condition of the school.  The Northborough High School Study Committee updated this estimate to include the cost of sewer hook-up resulting in an estimated cost of $23,267,000.[6]  The cost of construction for a new 700-pupil high school in Southborough was estimated to be $21,101,850.[7]  However, these numbers exclude the costs associated with many important factors.  Questions that would need to be answered are:

 

• What is the cost to acquire land in Southborough?
• What is the cost for septic/sewerage treatment plant in Southborough?
• What will the payment be from Northborough to Southborough for the value of the assets of the region?
• What reimbursement rate from the state will Northborough and Southborough receive?
• When will Northborough receive its State Reimbursement for a renovation that does not add capacity?
• How long will it take to resolve the issues and complete construction projects? 
• What will be the cost of temporary classrooms during the transition?
• How will interim costs such as temporary classrooms and improvements to the existing facility be shared between the towns while these questions are resolved?  Particularly, while the question of asset allocation is unresolved.

 

The process of dissolution is likely to be a lengthy one.  It could quite likely span the entire high school career of at least one or two classes.  In the absence of clear compelling evidence of the obvious benefits of a non-regional versus a regional solution, is it fair to sacrifice the high school experience, academic and otherwise, of one set of students for benefits that may or may not be realized by another?

 

Debt Schedule

 

The debt payment schedule will follow the current municipal financing practice of constant principal payment with a declining total payment.  This methodology results in significantly lower interest costs.  In addition, state reimbursement limits reimbursement of interest costs to the interest that would be paid using the constant principal method of financing.  Any additional interest costs attributable to an alternative financing method is non-reimbursable. See attachments 1 & 2 for the debt schedule for the design fees and construction costs.

 

Impact of Not Proceeding With Project

 

If the project is not funded, then the Regional School Committee would need to continue to work with both communities to come to a permanent solution that will be acceptable. In the interim, a five-year plan has been established to provide the necessary classroom space through the use of portable classrooms. In addition repairs that have been delayed due to the anticipated permanent solution, will now need to be addressed. The total cost of the five-year plan is $4,120,000. Portable classrooms account for $1,600,000 of the total cost and are non-reimbursable in this scenario, whereby they will not eliminate the need for additional space, but only postpone the eventual building project. See attachment 3 for the details of the Five Year Plan. In addition, to these tangible dollar costs is the threat to the High School’s accreditation status. The High School is scheduled for its review during the school year commencing September 2003. This timeframe coincides with when the student population will exceed the capacity of the current facility. If a permanent solution is not in place at that time the High School’s accreditation status be in jeopardy. Not only would this have an adverse affect on the students attending Algonquin but also on the property values of the two towns. According to Mary Carney, the financial advisor to the town of Northborough, the drop in property values could adversely affect the credit ratings of the towns.