NEWPORT — After years of debate and planning, work on the expansion and renovation to the county nursing home is expected to start early next month, after the delegation of state representatives on Monday approved an additional $9 million in bonding authorization to cover an unexpected increase in the project’s guaranteed maximum price, now $75 million.
“We have a commitment so now it is a matter of getting the contract executed and getting commitments to our subcontractors,” Keith Kelley, senior project planner with general contractor Harvey Construction said after the 11-1 delegation vote.
The county has now approved $35 million in bonding for the project of which $20 million has been exercised. A decision on how much of the remaining $15 million will be bonded won’t be made until June 2024, county officials said.
“This will buy us time to find other sources so it is not on the back of the taxpayers,” County Manager Derek Ferland said at the meeting. He is hopeful grants and more federal and state funding can be obtained.
Besides bonding, the project’s remaining funding will come primarily from a federal grant ($2 million); the American Rescue Plan Act ($7 million); the Governor’s Office for Emergency Relief and Recovery ($25 million); and the county’s capital reserve fund ($5 million).
To reduce the amount needed from $12 million to $9 million, Ferland told the delegation they would use an additional $2 million in the capital reserve fund and pay for $1 million of the $2.5 million for furniture, fixtures and equipment (FFE) separately.
When the delegation voted in August for $26 million in bonding, it had estimated a maximum price of $63 million. But the total cost came in at 20% more than that.
The delegation had to make a decision Monday on additional bonding authority because the bids from the subcontractors, submitted Oct. 15, expired after 30 days. If another round of bidding was required, there were fears prices in a very active construction market would increase again and some bidders may chose not to participated.
“We don’t believe we can go out a third time so we would have to negotiate with the subcontractors (who submitted bids),” Bourque said.
Representatives Walt Stapleton, R-Claremont, and Brian Sullivan, D-Grantham, were the most vocal supporters of approving more bonding capacity.
Sullivan said waiting for the new delegation with four new members elected Nov. 8 and having to bring them “up to speed” not only risks further price increases but the loss of non-taxpayer funding sources.
“Today is the day to get something done,” Sullivan, vice chairman of the delegation, said.
The delegation vote — John Callum, R-Unity, voted no — came after a presentation on the reasons the cost has increased $25 million since the county first received a guaranteed maximum price in 2020. Mary Bourque, director of Facilities and Operations for the county, said the current construction market has high demand and there are labor and material shortages, all of which has served to drive up prices the last two and a half years.
Bourque showed that since the last guaranteed maximum price was quoted in 2020, bids — many from the same subcontractor — are up at least 20% and some, such as electrical, were up 74%. The expectation is that they will increase again after Jan 1.
The contract with Harvey includes nearly $2 million to potentially cover more price increases during the three-year project.
“This is what the project cost,” Kelley said at a meeting last week. “It is not inflated. It represents where we are today and no guarantee where we will be tomorrow.”
Kelley also provided a glimmer of good news last week when he said the volatile market has been tamped down the last four months and has been “flat.”
“Flat does not mean down,” he added.
The taxpayer portion of the project has not changed from about $35 million because the county is receiving about $32 million in COVID relief money it did not have in 2020.
“We are getting tons of money to help with this and I don’t think anyone wants to see it go back,” Sullivan County Commissioner Ben Nelson said at the outset of the meeting on Monday.
As he implored the delegation to increase the bonding total, Nelson said the nursing home residents paid their taxes and Social Security and Medicare all their lives with the expectation they would be taken care of.
“We need to fulfill that promise,” Nelson said.
The project will include a complete rehabilitation of the main nursing home with an 82,000 square-foot addition and improvements to the MacConnell building which is the county’s memory loss unit
Patrick O’Grady can be reached at pogclmt@gmail.com
