The Oconto County Board on Thursday approved a bulk of the bids for a new law enforcement center and agreed to take $1.75 million from sales tax to pay for the facility.
The center, to be built north of the courthouse, will include jail housing for up to 175 inmates, a sheriff’s administration area and a 911 center.
The County Board agreed to tap the sales tax fund, which is designated for capital improvement projects, when the cost of the project outpaced early estimates. The total cost of the LEC is estimated at $31.75 million, up from initial estimate of $30 million.
Several factors account for the overrun, including an industrywide rise in construction rates and the decision to acquire and demolish the USDA building to create additional space for parking.
Construction costs, at $26.8 million, account for the largest chunk of the $31.75 million. Other costs include $2.35 million for property acquisition, $1.3 million for design, and $1 million for miscellaneous expenses and furnishings.
To pay for the LEC, the County Board previously transferred $5 million from the county’s general fund and approved $25 million in bonding.
The resolution to use sales tax revenue mustered the two-thirds vote of 21 when it passed 23-6. Voting against the proposal were supervisors David Christensen, Terry Brazeau, Gary Frank, Chris Augustine, Ken Linzmeyer and Rose Stellmacher.
Frank argued that the use of sales tax will result in tight finances for day-to-day operations.
“You’ve already taken $5 million from the general fund, and this (sales tax fund) is our fall-back. If we need some money somewhere, this is where we can go,” he said.
He recommended other options, including bonding — a suggestion that drew criticism from other supervisors who wanted to avoid going further into debt.
“It makes no sense to pay 3 to 4 percent (interest) to pay on some more bonding, and we’re getting 2 percent on our savings account,” Supervisor Paul Bednarik said.
“We can do some in-house funding with this,” Supervisor Alan Sleeter added.
Administrative Coordinator Kevin Hamann said the county is collecting 8 percent more in sales tax in 2015, compared with 2014, and is projected to end the year with a $2.5 million balance.
Taking money from the fund, however, will postpone some capital projects until the LEC project is done, although some expenditures still will be made, including $170,00 for sheriff’s vehicles and $160,000 for technology updates.
In the second resolution at Thursday’s special meeting, the County Board selected contractors for 39 construction categories. It was the second time the board approved bids; on July 23, three contractors were selected for earth moving and foundation work for the center.
Eleven categories were rebid after the July meeting, either because the bids came in over budget or the county received no bid in a category.
“I’m not happy with the bids so high, but that’s where the bids came in,” Hamann said. “We rebid it, and some of those numbers even came in higher than before.”
Kurt Berner, of The Samuels Group, the county’s consultant for the LEC project, said bids were higher than estimates because of higher materials costs, changes in the scope of work and trends in the industry following the recession.
“(Contractors) have work. Because of where the industry is right now, they’re charging a higher premium for their work than they have recently,” Berner said. “This is something that’s been trending in the market the last six, eight months.”
The County Board also plans to lock in prices on four other categories with a letter of intent while it works to find savings without changing the functionality of the building. A product swap to cheaper ceiling material was one example Berner mentioned.
A final set of bids will be approved Sept. 24 when the County Board meets again. Bids for food service equipment, electrical work, communications devices and electronic security (locking mechanisms and cameras) were $1.3 million over budget. Berner said the overrun could potentially be reduced by $660,000 if design changes are made and the county purchases some material directly.
According to a spreadsheet provided by The Samuels Group, the county has the potential to come out $743,727 under the bids presented Thursday by tweaking the facility’s design and finding alternatives to construction materials. All changes must be approved by the engineers of the project, the Department of Corrections, building inspectors and the county committees overseeing the project.
Any savings the county realizes will be added to the contingency budget, currently at $887,000, or 3.5 percent of the project.
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