Select Board hears higher bids, added contingency for new Our Island Home; finance plan proposes mix of borrowing and retained earnings

Select Board members were updated April 9 on final bids and a revised budget for the proposed new Our Island Home (OIH), the town-managed nursing facility project. Project designer Craig Piper and owners’ project manager John Lemieux told the board bid packages returned higher than earlier estimates, prompting additional allowances and contingencies.

The project team said trade subcontractor responses were thin on bid day and some trade envelopes came back far higher than anticipated, pushing the construction number up. "We've gone out to the marketplace, and the marketplace has come back," John Lemieux said, summarizing the shift from estimates to actual bid figures. The team said a tariff allowance of $4.5 million and an $800,000 allowance for last-minute HDC comments were added, and an overall owner contingency (5% on the project) was included, for a combined contingency pool of roughly $10 million.

Why it matters: the Select Board and voters will decide whether to authorize the additional borrowing and other funding needed to move the project forward. Project leaders said permitting is nearly complete and that construction would begin only after required votes and approvals.

Details of the revised budget and schedule The presenters said the revised total project budget is approximately $134.0 million. That total includes: building and site work, housing-related costs tied to Sherburne Commons unit relocations and new housing, owner costs (design, OPM, testing, builder’s risk insurance), equipment, and contingencies. The team said $8.5 million had already been appropriated in Article 11 of 2022, leaving roughly $125.9 million to be funded under the Article planned for the 2025 Town Meeting.

John Lemieux and contractor representatives explained the procurement and bidding sequence: the project used the construction manager-at-risk delivery method so the town could receive subcontractor pricing before finalizing a guaranteed maximum price (GMP). Of the 14 trade bid categories advertised initially, only 29 trade bids came in; several categories had zero or a single bid. The project team rejected eight trade categories and re-issued them as non-trade buyouts, which increased the pool of responsive subbids to about 119 across all categories.

Reasons for the increase Project staff identified several contributors to the higher numbers: revised scope based on geotechnical data (soil replacement and additional geotechnical work and additional geothermal wells), market conditions, and the new tariff allowances. The team emphasized that the design itself did not change materially since the December presentation; rather, the apparent cost increase reflects actual market pricing the team received on bid day.

Funding proposal Finance Director Brian Turbott briefed the board on a proposed funding mix to cover the gap. The plan presented to the board would use: an authorization to expend up to $600,000 from the revolving public works housing fund (with $500,000 targeted to support relocation of Sherburne Commons cottages); $1.5 million from sewer retained earnings; use of island-home retained earnings for some medical equipment purchases (about $3.08 million); and an increase in the borrowing authorization to cover the balance. The team said the Finance Committee would hear a presentation the following day and that the article on the warrant would reflect the final funding approach.

Next steps and schedule Presenters said permitting milestones are nearly complete and that, if the funding votes are successful at Town Meeting and on the ballot, construction would target a September start and a December 2027 opening. The project team told the board they will continue to refine trade buyouts and allowances between now and Town Meeting and will return if additional cost reductions are identified.

Select Board discussion and public questions Select Board members pressed the project team on tariff sensitivity and contingencies. The project team said current allowances assume about a 4–5% tariff exposure based on market intelligence but acknowledged the contingency pool is available if tariffs increase further. Select Board members also asked for clearer plumbing trade numbers and whether local contractors could bid; Consigli’s representative said the plumbing trade came back at about $4.2 million in the GMP, and the town staff said they would follow up on procurement and licensing questions.

The board asked for continued transparency to voters. Several board members said they prefer the current delivery method (CMAR) because it produces firm bid numbers before final approvals.

Ending note Project staff and the contractor said they will continue to pursue buyout savings and report any material changes to the Select Board ahead of Town Meeting.