Lowell City Council approves $38.85 million supplemental borrowing for Lowell High School after heated debate

The Lowell City Council on Dec. 2 approved an additional $38,850,848 to the Lowell High School project budget after extended questioning from councilors about contingency, unforeseen conditions and future taxpayer costs. The borrowing supplements a previous authorization and represents the total project budget approved by the Massachusetts School Building Authority (MSBA).

Mr Dowd, the project representative, told the council the contingency was calculated two ways: a 12.5 percent contingency applied to the remaining phase work and a trade-by-trade estimate with allowances for closeout and potential claims, which together yielded $14,750,000 as a conservative contingency figure. “We sat down trade by trade … and added closeout and a safety factor,” he said in explanation of the estimate.

Several councilors said the size of the contingency and newly reported conditions erode public trust. Councilor Gaetzschier criticized prior assurances and warned taxpayers were bearing the cost: “When I look at this, I just feel as though the taxpayer got taken,” he said, urging that use of contingency funds be returned to council for approval. Councilor Dakota and others asked why a $2 million basement-floor replacement in the 1892 building surfaced after the June presentation and whether more intrusive preconstruction probes should have been done earlier.

CFO Baldwin and the project team said some unforeseen work is typical in renovation of century-old structures and that the project followed a qualifications-based procurement for an OPM and a construction manager at-risk under state law. Baldwin quantified budgetary impacts: the estimated annual debt service on a $39 million loan at about 4.5 percent interest would be roughly $2.5 million, with an estimated tax-rate effect of about 1.6 percentage points per year as the debt service phases in over three years.

Councilors asked whether scope reductions were possible. Mr Dowd and staff cautioned that cuts could violate the MSBA project funding agreement or trigger difficult contract negotiations with the construction manager and subcontractors, potentially undoing state reimbursements or creating additional costs.

The record shows councilors pressed consultants and administration on contingency methodology, the timing of discovery of asbestos and other hidden conditions, and the potential for subcontractor claims. Mr Dowd acknowledged a contingency draw for asbestos abatement and said subsurface/hidden conditions are common in renovation work; he noted closeout funds were included to settle potential claims.

After debate, the council adopted the borrowing order (mover: Councilor Yam; second: Councilor Scott). The motion passed by roll call; the transcript records at least one recorded “no” vote from Councilor Dakota and multiple councilors voting in favor. The council’s action authorizes the city to borrow the supplemental amount to complete design, construction, equipment and furnishing for the Lowell High School project.

Councilors and project staff said they will monitor claims and change orders closely and that the administration will report further details to the council as contingency is expended. The council adjourned following remaining agenda items.