Millis school building committee trims project contingency by $2 million ahead of town meeting

The Town of Millis School Building Committee on Wednesday voted to reduce the previously approved school construction budget by $2 million, after debate over contingency levels and the project’s risk profile.

Project consultant Jeff (last name not specified in transcript), who reviewed the budget with the committee, told members he was comfortable lowering the construction contingency from the previously carried 7.5 percent to 5 percent and reallocating some funds from line items into more targeted uses. “There is $11,000,000 inside the construction number itself that normally does get used throughout the process,” Jeff said, describing escalation and design-and-pricing contingencies within the construction total.

The committee’s reduction was proposed to present a more realistic, defensible figure to voters while keeping funds available for likely renovation and site risks. Jeff told the panel the town still carries both owner and contractor contingencies plus a set-aside the construction manager (CM) holds: “So between your pure contingencies, you have $7,000,000,” he said, and the CM also holds about $2,000,000 within its contingency.

Town finance staff and committee members focused on how much the $2 million change would affect homeowners. Craig (last name not specified in transcript), the finance official who answered tax questions, said the reduction would translate to “about a $50–$60 per household swing” at an assumed 4.5 percent tax-exempt borrowing rate. He added that changes in the final interest rate could widen that gap to roughly $100–$120 per household and that the final per-household figure will depend on the rate used at long-term bond sale.

Committee members and consultants reviewed several line items that Jeff said had flexibility, including: - A $150,000 allowance for IDS (Interval Data Systems), an optional subconsultant to help track building performance post-occupancy; Jeff said that amount could be dialed up or down. - Designer fees just under the state cap (reported as roughly 9.7–9.97 percent of design services). - Permitting ($75,000 carried), hazmat and geotechnical testing (hazmat carried to consultant estimates; geotech rounded up to $100,000 with an extra $150,000 cushion), and $3 million for furniture, fixtures and equipment that Jeff described as a later-stage budget where savings could be found.

Jeff described other budget elements that the committee had built in for prudence, including $4.3 million in escalation (about two years of escalation) and a $6.9 million design-and-pricing contingency the team expects to draw down as design is finalized. He also noted the committee had elected to use the higher of two cost estimates when preparing materials for voters.

Members discussed market conditions and whether more competitive subcontractor and general-contractor bidding could reduce final costs. Jeff and other members said they are seeing more aggressive bidding than a year earlier, which supported a lower contingency. “We are going to see much more competitive bids,” Jeff said, adding that private-sector subs and firms from neighboring states are submitting for public work.

The committee voted to adopt the revised budget figure and then approved monthly professional invoices: Tapay (professional services for July) for $66,235.68 and Vertex (professional services for July) for $14,222.25. The invoice votes passed unanimously; the budget reduction vote was approved by the committee during the meeting (roll-call details incomplete in the transcript).

The committee also scheduled a joint meeting with the Select Board and School Committee for a public presentation in late September/early October to present floor plans, site plans, schedule and the revised budget and to seek endorsement for the MSBA submission. Jeff and town staff said they expect the Massachusetts School Building Authority (MSBA) to finalize eligibility and town share details before town meeting, likely in September or October.

Why it matters: The shift reduces the headline budget figure presented to voters and trims the town’s exposed share of contingency dollars that are ineligible for MSBA reimbursement. Committee members said a lower, defensible number may make the proposal easier to present to voters while retaining budget levers if unexpected conditions arise.

The committee chair closed the meeting by noting the group is one step closer to a final town meeting article and thanked members for attending the additional session.