Project Consultant: ‘Nobody Waved A Flag’—

School Officials Warned About Hawley Cost Escalations Last December

By John Voket

A consultant for the Hawley School heating and air conditioning project started cautioning Newtown school administrators last December that materials and other related costs appeared to be escalating beyond the $3.3 million taxpayers approved for the job. Despite his repeated warnings, however, the consultant said administrators appeared unconcerned, never suggesting he adjust specifications to offset anticipated cost overruns.

This latest piece of information came to light Wednesday evening during an information session for Legislative Council members regarding engineering and mechanical justifications for the project. Following the late August opening of bids for the heating and air conditioning upgrade, it was revealed that the $3.3 million estimate to complete the job would likely increase by $2.1 million.

The Board of Education subsequently endorsed a request for the additional $2.1 million, but the Board of Finance turned it down. School board members then voted to go directly to the Legislative Council seeking endorsement for the increase, effectively avoiding having to face finance board members a second time.

This action was rescinded after, in a letter to School Superintendent Evan Pitkoff, Council Chairman Will Rodgers strongly suggested the district work to fashion a compromise with the finance board regarding potential cost overruns.

Taking pains to avoid any direct discussion of financial elements of the project at Wednesday’s meeting, the council heard about problems related to the existing system from school officials including the Hawley Principal Jo-Ann Peters, School Finance Director Ronald Bienkowski, and Hawley HVAC project consultant Brian Wetzel representing Consulting Engineering Services (CES) of Middletown.

 

Q&A Session

In a question and answer session following the presentation, several council members took issue with the decision to have bids for the Hawley project submitted as a lump sum cost for the entire job, including all fees, professional services, labor, and materials.

The line of questioning was precipitated by council member Michael Iassogna, who asked why the air conditioning component of the project was not broken out as an option, considering it contributed to the projected cost overrun. Councilman Joseph Hemingway then noted that in his professional experience it was easier to monitor material and equipment costs, and adjust for overruns, when those components were broken out in the bid.

Mr Wetzel said that in his profession, bids were typically tendered in lump sum fashion, and that the bid preparation was not necessarily relevant to the cost escalations.

First Selectman Herbert Rosenthal, who was in attendance, suggested that an advisory committee that reviewed and recommended the project two years ago would have been better served if its members were told at the time that air conditioning could be optioned out if the budget would not allow for it.

“There was a budget concern about [the air conditioning], it was raised during the climate committee; it was in their report,” Mr Rosenthal said. Mr Rosenthal noted that Mr Wetzel worked with the climate committee, and if the budget was a concern then, why wouldn’t he option out the air conditioning in the bid request that was prepared last June?

“Quite frankly, I didn’t think there was a budget concern,” Mr Wetzel said. “When we let the Board of Ed know in December and in April that the cost of this project was going to be more than we estimated, nobody waved a flag to us.”

Later in the meeting, Councilman Richard Recht returned to the issue.

“I thought I heard you say something like, ‘…in the process you did not receive or sense there was any cost pressure.’ What I heard you say, is when the number grew, you didn’t hear or feel or have it communicated to you that that would be a problem. Can you clarify that?” Mr Recht inquired.

“I might have misspoke. I submitted numbers to the town in December and in April. It was not directly to the Board of Ed, so all I can say is numbers were available and at that point in time [we were told] this is the project, this is what the goals were, this is the right thing, please keep designing,” Mr Wetzel said. Mr Wetzel then confirmed he communicated the probability of cost overruns to Mr Bienkowski and school facilities manager Dominick Posca.

“And you didn’t get a reaction from them?” Mr Recht continued.

“Nobody asked me to pull back in the design or do an alternate bid,” Mr Wetzel said.

School Board In The Dark?

When The Bee subsequently sought clarification from Board of Education Chairman Elaine McClure as to when her board finally learned of potential cost overruns, Ms McClure said pending her review of meeting minutes, she believed the board was never made aware of Mr Wetzel’s concerns about rapidly escalating costs beyond the project’s budget until just before the town budget was finalized last June, seven months after Mr Wetzel’s first warning to school officials.

As the meeting broke, Ms McClure was overheard admonishing Mr Wetzel for his comments to the council.

“You work for us,” she said. “How could you suggest to the council that we weren’t concerned about the cost for this project.”

Mr Wetzel defended himself saying he was simply answering the questions put to him, and the information came to light in relation to the structuring of the original bid requests. Superintendent Pitkoff, who was also on hand, clarified that no one could be absolutely certain the project was going to be over or under budget until the bids were opened on August 23.

In a memo to the first selectman in July, however, Superintendent Pitkoff indicated there would likely be project cost overruns in excess of $1.2 million. By that time, the first year of debt service on the approved $3.3 million in bonding for the project was already allocated in the 2005-2006 municipal budget.

After the meeting, council chairman Rodgers defended the consultant, saying he was surprised that administrators or school board members would take issue with Mr Wetzel’s truthful answers to council members’ and the selectman’s questions.

“He was in the process of discussing the bid preparation. I’m surprised administrators or anyone from the Board of Ed would fire up at him,” Mr Rodgers said. “He’s just the messenger.”

Mr Rodgers said he was troubled by the revelation, and that it was “very telling,” that Mr Bienkowski and Mr Posca received news of the likely budget overrun, and failed to notify the Board of Education early on.

“I’m troubled that they apparently offered no reaction at two junctures,” Mr Rodgers said. “Even if they were soft numbers, the information [from Mr Wetzel last December] should have prompted an instantaneous reaction.”

Mr Rodgers said it was “significant,” that the debt service on a $3.3 million budget was endorsed in June by the same school officials who knew about likely overruns months earlier, and who then issued a memo to that effect almost a month after the debt service was allocated in the town budget.

“We budgeted this money for debt service predicated on the numbers we were given [by the school officials]. Once that money gets into the budget, you should be informing the town if you think those numbers might change in either direction,” Mr Rodgers said.

Mr Rodgers agreed that this incident marked the second time in recent months school officials apparently gambled and lost on significant financial matters. Last fall, the school district failed to lock in early heating oil pricing on Mr Bienkowski’s prediction that fuel would fall during the winter.

During budget proceedings, town finance officials repeatedly criticized school officials after the district ended up spending thousands more on heating oil than necessary saying officials had the opportunity to lock in a substantially lower price for the fuel but refused to do so.

According to Town Finance Director Ben Spragg, in the 2003-2004 budget year, the school district locked in oil pricing at $.87 per gallon. After failing to lock pricing in the 2004-2005 budget, the Board of Education, which also determines oil pricing for town buildings, paid as much as $1.84 per gallon for oil.

“Last year the Board of Ed paid almost $1.4 million for energy which includes electricity, gas, and oil,” Mr Spragg told The Bee. “That has to include hundreds of thousands for oil. And since the schools use much more oil than the town, the town piggybacks its oil with the district. That means the taxpayers paid a lot more than if prices were locked in at a lower rate.”