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Board approves $6.01M GMP amendment for elementary mechanical work and authorizes account for $42M bond proceeds
Summary
The board approved a guaranteed maximum price amendment of $6,013,970.30 covering mechanical systems for three elementary schools and passed a resolution authorizing the treasurer to open a local account to receive about $42 million in bond proceeds; the district noted IRS arbitrage limits on interest earnings.
The Sunman‑Dearborn Community School Corporation board approved a guaranteed maximum price (GMP) amendment and authorized a local bank account for bond proceeds at its Sept. 12 meeting.
Dr. Jackson, superintendent, told the board the GMP before them covers mechanical systems work at Summit, Bridal and North Dearborn elementary schools and that Exhibit C shows the amount to be approved is $6,013,970.30. He said roughly $4,997,000 of that figure represents the mechanical work while the remainder covers soft costs, reimbursables and contingencies. "That's actually $700,000 less than what the estimate was," Dr. Jackson said, referring to Maxwell's original estimate.
Board members discussed contingencies and fee structure; Dr. Jackson said the construction manager and the owner each have a 2.5% share for a combined 5% allowance for fees/contingency. He said the district will bid the rest of the project in October and expects a larger, final GMP in November that could bring the total project close to $40,000,000.
Separately, Dr. Jackson explained the district sold bonds and expected to close on Sept. 18, receiving about $42,000,000 in proceeds, with approximately $40,000,000 to be deposited locally. He said the funds will be held at FCN and are fully insured; the district is receiving about a 5.18% interest rate there. "We're estimating we'll earn about $2,300,000 over the life of the project in interest," Dr. Jackson said, but he warned that IRS arbitrage rules (an arbitrage rate he cited at about 3.8%) limit the amount of interest the district can retain and that bond counsel will track compliance.
A motion to approve the GMP amendment was made and seconded; the board approved it by voice vote. The resolution authorizing the treasurer to open the account for the bond proceeds was also moved, seconded and approved by voice vote.
The board’s actions allow the district to move forward with the specified mechanical work under the GMP and to receive and manage bond proceeds locally; the administration said subsequent larger GMP amendments and additional contract documents will return to the board for approval.
