HomeMy WebLinkAbout112023 email Proposed New Aquatic CenterALERT: BE CAUTIOUS This email originated outside the organization. Do not open attachments or click on links if you are not expecting them.
To: Jefferson County Board of County Commissioners (BOCC)
From: Mark Grant, Port Townsend, Unincorporated Jefferson County, WA 98368
RE: Proposed City of Port Townsend, Healthier Together, New Aquatic Facility
Dear Commissioners Dean, Eisenhour, and Brotherton:
I would like to make some observations from my review of the PT City Council Meeting held on Monday, November 13th at the Mountain View Pool and Commons. It was apparent to me that the
message from staff, the city council, and from most of the public in the room was that the City of Port Townsend/ Jefferson County is going to get a new pool/ aquatic center, and that
we will figure out how to pay for it later. This message is deeply flawed, and the prospects for not only building a new aquatic center, but also for doing so by developing a new taxing
district authority, a Public Facility District (PFD), should be very worrisome for the property tax payers of the entire county. I therefore recommend not moving forward with this current
pool plan as proposed.
It was interesting to me that some at the meeting felt that the “citizenry” has an ethical responsibility to provide learning-to-swim opportunities for our children, in that, as we are
surrounded by many forms of aquatic environments, obligates us to do so. I do not argue that teaching our children how to swim is an important life lesson, but that the obligation for
teaching those skills should not be perceived to be solely the responsibility of the citizenry through exorbitant government allocated resources, but primarily on the parents of the
children with reasonable support from the municipal/elected authorities. I believe that if a community can provide reasonable and economically viable community assets to help in facilitating
this opportunity, those assets should be considered, but are not obligatory; “reasonable” and “economically feasible” are the operative words here.
After a review of the City of Port Townsend Healthier Together, DCW Cost Management prepared, Preferred Option (29,700 square foot plan) – Cost Plan Update dated June 30, 2023, I have
some concerns. The report states that the total cost for building and sitework is estimated to be $27,957,115. This amount includes sales tax, which, with the recently approved 0.3%
increase plus the proposed 0.2% increase for support of the PFD, would bring the sales tax payable amount in the City of Port Townsend associated with this new construction to 9.6%
(sales tax in the county/outside of city limits would increase from 9.1% to 9.3%). This changes the total cost for construction, not including sales tax, to $25,508,317, approximately
$859/sf. I’ve reviewed the current documentation depicting the build-out of the new aquatic center, including site plans, floor plans, renderings, line-item costs, etc., and given my
40-plus years of experience as a general contractor performing both public works and private works contracting, this amount to “turn-key” build this new aquatic center seems low and
fiscally impossible.
To clarify, contingency money at 10% has already been applied and assumed in the currently estimated cost total. Given that this project would be subject to Washington State Prevailing
Wage Laws, possibly even Federal Davis-Bacon Prevailing Wage Laws if federal monies are tied to the project funding, it seems like the 10% contingency amount, along with the even larger
cost escalation amounts, should be applied after the $27,957,115 currently proposed total project budget. To be certain that the facility can be built without needing additional taxpayer
funding to complete, at least 35% to 40% should be added to the currently estimated budget, bringing the new cost for constructing the facility somewhere between $37,742,105 and $39,139,96.
I do not have all of the details (surely available through PRR), but I believe that when the new Salish Coast Elementary School was built, cost negotiations with the contractor selected
to build the project had to begin immediately after the contract was awarded, as the projected construction costs had already shown signs of vastly exceeding the proposed budget. The
end result was that cuts had to be made to what was intended to be built in order to get some semblance of a functioning and viable new school facility. In the end, even with these
cuts, the approved budgeted amount to build the new school was exceeded by approximately 40%. Please feel free to fact check me on this, but this information came to me from a reliable
source. This type of scenario would be devastating for the aquatic center project as proposed, and more importantly, be devastating to the newly formed PFD. The initial debt with interest
and the debt associated with the cost overruns associated with the new project would still have to be served to the creditors. Unfortunately, the only way out in this scenario would
be to go back to the property tax payers to backfill the shortfall of the initial budget, as the credit rating for the PFD to borrow more would be destroyed. Jefferson County property
taxes would inevitably have to serve as the debt backstop for the proposed project.
As I reviewed the current Cost Plan Update, I did not see anywhere that there was a line item for Architectural and Engineering (A&E) design costs. These costs are typically included
with the total cost for construction as separate line items, and should not be assumed to be included in the Project General Conditions or Project General Requirements, because that
is not what project general conditions and requirements serve to provide in a construction contract. So, where are the A&E costs? A&E firms that have the expertise to perform complex
municipal design services typically base their fees on a percentage of the total estimated cost for constructing the facility to be designed (side note: I have always found this to
be a conflict of interest). This percentage ranges typically between 15% - 18%, maybe more based on the complexity of the project. If this percentage amount is added to the $27,957,115
currently proposed budget, the new budget would be increased to, on the high side, $32,989,396 plus the added tax associated with this increase.
Costs associated with potential hazardous material abatement are not included in the current cost plan. Given that the age of the existing facilities to be demolished are very likely
subject to abatement responsibilities/requirements, i.e., likely having lead-based paint, asbestos, pool related maintenance chemicals, etc., this could be a large line-item construction
cost not currently budgeted. The argument will undoubtedly be made that the costs associated with possible abatement expenses would come out of the contingency monies at 10%. My assertion
is that the contingency monies are already spent/needed for the project to be completed, so the abatement monies would have to be added to the budget total with contingencies monies
already applied . It would be difficult to determine how much the abatement cost might be, but if I were to guess, again based on the age of the structures to be demolished, I think
it is reasonable to estimate approximately $3 million - $4 million. Abatement is a time consuming and logistically challenging process that should be reviewed more closely before going
forward in any way with this project. So, again on the high side, $4 million added to the $32,989,396 above, brings the new estimated budget total to $36,989,396 plus the added tax
associated with this increase .
Permitting costs in the current cost plan are stated as “By Owner” (the taxpayers) and are therefore not included in the current budget total. Based on interpolating past permitting
costs that included state and municipal fees, SEPA fees, plan review fees, municipal inspection fees, and administrative fees, the permitting cost could be in excess of $120,000. This
amount added to the new budget total stated above would bring the proposed project estimated total to approximately $37,109,396 plus the added tax associated with this increase. This
amount is close to what I project above as the 35% range on being short of the proposed budget. Therefore, to be sure that it could be built without cost overruns and with possible
surpluses, the 40% increase to the proposed current budget amount should be considered, bringing, again, the realistic budget for the project in at $39,139,961, rounding-up to an even
$40 million. Do we need to spend, based on my interpretation of the real estimated project budget required, $40 million to have a “functional” and “reasonable” pool/aquatic center for
our community? I say no!
The Port Townsend City Council’s vote/ recommendation Monday night did exactly what everyone there complained about was going on over the last 30 plus years. It was just kicking the
can of fiscal responsibility down the road for someone else, for another agency, the BOCC, to have to take responsibility for. The approach needed to be taken was thoughtfully expressed
by Councilmember Mickhager, saying that more fiscally responsible due diligence needs to happen before any major decisions/ballot measures are proposed. So now the responsibility will
be on the BOCC as to how to proceed. Again, the property tax payers of the city and the county are still on the hook as the potential Guarantors on the bonds that will need to be floated
for this project. The tax paying citizens of our entire county need to pay attention to what is happening with this proposed new aquatic center, as many of us feel like the “one tax
increase after the next” methodology for services is starting to drive us out.
The currently proposed project is fiscally deeply flawed. So, what can we do? What do we do if we feel that having a “functional” and “reasonable” pool facility in our community is
an important asset to have? First and foremost, we need to stop this current proposal from moving forward. We need to make sure that the proposed formation of the PFD is stopped, especially
given that it would become a $110,000 plus cost to the taxpayers just to put the measure on the ballot. I formally ask you, the BOCC, to vote no regarding any proposed ballot measure
for the formation of a PFD. Second, we need to realistically review the supposed data that says the current existing facility cannot be made workable. If we were to spend the $1 million
to fix the roof, $1 million to replace the pool liner, $1 million to change-out/ modify the pool equipment, $1 million to seismically retrofit the current structure(s), $1 million to
perform an in-place hazardous materials abatement, $1 million to improve and correct accessibility issues, and another $4 million to address unknowns, make other “bells-and-whistles”
improvements, and to set aside some operational expense reserves, would we not end up with a functional and reasonable pool facility for our citizenry? This totals up to $10 million
all in, and even if that were to become, say, $12 million all-in, aren’t we better off with how we have managed the tax paying citizens’ resources and assets?
The knee-jerk reaction whenever our publicly owned facilities are deemed as needing to be replaced, is to demolish and rebuild new facilities with the “Taj Mahal” option only, at the
taxpayers' expense. We are always told to push aside the refurbish, remodel, and repair options as these are deemed “not possible”. That is not to say that there are cases where this
option is the only practical option and that the demo and replace option makes the most sense. But this option should be a last resort only approach, and not be as the result of irresponsible
deferred maintenance practices. We have many fine examples, both as publicly and privately owned facilities, i.e., the courthouse, the city post office, the buildings along Waterstreet,
where repairs, seismic retrofits and electrical, plumbing and general building code upgrades have maintained and preserved these assets. This second step involving more detailed and
thorough consideration for the repair of the existing facility, if possible, will prolong it’s usable life by at least 15 to 20 years, possibly longer, which buys us the time to review
a third step/ option here, which would be to site a new aquatic center in the Tri- Area (primarily Port Hadlock), the center for economic and population growth for our county/ for community
moving forward.
This third step/option has taken on momentum throughout the county as a whole as of late. The option to build a new aquatic center in Port Hadlock, especially with the new sewer system
infrastructure, makes really good sense. This is where the growth of the county will occur, both for new homes for families and for commercial construction, and for a more commercial/retail-based
center. This is where the sales tax-based growth needed to support a new aquatic center will come from. This is where the population of families with young children will continue to
grow. This is a centrally-located transit-accessible area for the entire county. There needs to be time allocated to more thoroughly study the siting of a new aquatic center in the
Port Hadlock area, and, in my opinion, not studying this option before moving forward with any option would be considered irresponsible by the taxpayers of Jefferson County.
I have been following the pool's discussions from a distance for years. I will take a more active role in monitoring the new aquatic center discussions going forward. In closing, I am
not a complete “no pool” advocate and am open to a solution for providing a community-based pool facility/ center that is either built new or renovated, but, that no matter what, is
fiscally responsible, operationally viable, and will not become an excessive burden to the taxpayers for generations to come.
Thank you and I am looking forward to your responses!
Sincerely,
Mark L Grant
Mobile - 360-301-4340 <tel:360-301-4340>
Email - grantsteelbuildings@gmail.com <mailto:grantsteelbuildings@gmail.com>
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