Town hall renovation faces $382K shortfall; council moves to ask town meeting for $750K owner‑controlled contingency

The South Berwick Town Council on Nov. 25 heard a detailed update on the town hall renovation that showed a 95% guaranteed maximum price (GMP) remaining about $382,000 above the voter‑approved budget. After a multi‑hour presentation by Oak Pointe Associates (architect) and Charter Brothers (construction manager), the council unanimously scheduled a Dec. 9 public hearing and a Dec. 16 special open‑floor town meeting to ask taxpayers to designate up to $750,000 as an owner‑controlled contingency for the project.

Peter McGovern of Oak Pointe Associates reviewed the design development and said the building plan has not materially changed since concept design; work on mechanical, egress and accessibility systems plus upgrades to restrooms remains. Mike Beam of Charter Brothers told the council the 50% market pricing returned roughly $1.1 million over budget; value‑management exercises and alternate specifications recovered much of that amount, but the 95% GMP still sits about $382,000 over the approved project budget.

"When we put it out to the market in August, it came back about $1.1 million over the budget," Beam said. He and the project team described adopted cost mitigations — adjustments to wall detailing, alternate window and ceiling specs, photovoltaic grant alignment and coordination with DPW for earthwork — that reduced the gap but did not eliminate it. The largest single driver was an increase in HVAC market pricing, which the team said progressed from roughly $30 per square foot in earlier conceptual estimates to market quotes nearer $60 per square foot.

Town staff presented three options: proceed within the current $7.3 million project budget and accept cuts that would leave parts of the project incomplete; ask taxpayers directly at a special town meeting to approve additional funds or drawing from designated town funds and undesignated reserves; or further value‑engineer the design. Staff said interest earned on the bond and existing town hall renovation funds would be used before tapping undesignated reserves.

Councilors debated risk trade‑offs. Supporters of asking voters for authorization argued that an owner‑controlled contingency provides quick access to funds during construction to avoid delays caused by expired bid holds, contractor reallocation or supply‑chain escalation. Dissenting members said waiting until demolition reveals the actual scope of unforeseen conditions could allow the council to ask for a smaller, more targeted supplemental appropriation.

Ultimately the council voted 5-0 to schedule a formal public hearing for Dec. 9 at 6:30 p.m. and to place an article on a Dec. 16 special town meeting warrant seeking up to $750,000 to be designated as an owner‑controlled contingency for the town hall renovation. The motion also directed staff to amend the warrant language to make explicit that disbursements from the contingency would require council approval and that interest/designated funds would be spent first.

Project staff warned of specific risks from delay, including expiration of bidder holds, escalation in material and labor prices and potential loss of key subcontractors. The project team asked the council to consider the 10%‑of‑project rule of thumb; the $750,000 figure represents roughly a 10% contingency on the full project cost after the 95% set.

Next steps: the council will finalize warrant language, hold the public hearing Dec. 9 and the special town meeting Dec. 16; if voters approve the contingency appropriation, staff and the project team will proceed to award key subcontracts and move into construction phases under the agreed change‑order and owner‑approval process described in the project contract.