 This is the Fort River School Building Committee on Wednesday, January 23rd, 2019. We're at the police station community room, and this meeting is being taped for broadcast by the University Meeting, and I will call still order. First item on our agenda is approving minutes from the previous meeting, and so I'll first open it up to whether people have comments, questions, corrections to the last set of meeting minutes, which Rudy graciously did for us. Hearing none, I would entertain a motion to accept them. Motion to approve minutes of the last meeting. Second. All in favor? Custodian. Okay. I think we got enough positives, which will bring me to the next question of who would be willing to record this evening's? We went around and played a game, not it. We started here, and the three people presently here who have not recorded before. I still have a set of minutes that I need to complete, so if I dare not. Who tells me I might be on that list? I'm definitely on that list. I won't say that. Would you guys like to do that? Draw straws? I don't have to do it. I just- They don't have to be super detailed. We don't have to record every word. We have most 99% of the time we have the recordings. Well. Which we should note that we don't have from last time. Yeah. Because there was a snap of it. So I would say if you're willing to do it, that would be great, but I would suggest that we all take some notes just in case because the tape was wiped last time. So you may not- Have that at all. It may not be there, so you should take minutes like it's not going to be there. No, take notes. We'll help you have that. That's my, I mean I do it all the time, it works. Thank you. And I still have my list. I think it's like the 12, 10 or something like that. It was our two and a half hour one that I've gotten through about an hour. And I just kind of finished. I think we only have one more meeting before we have to do that. Yeah. So we can move on, I think, from meeting minutes of both approving and taking and moving to public comment. I know Mr. Milk has some comments, so I'll let him make his comment. Do you want a list of them? Pardon? Oh yes. What I'm going to say is written down on a piece of paper which I put in front of you, John, so I hope you wanted to start it. Yes, I will hand some either way in either direction here. This way, I don't know if I have enough. 111. This is the 111, I think it's the other one. And there's this one here, yes. That's last week's. Yeah. Okay. Thank you. We have lots of paper tonight. Yeah. So we're not going to go into the paper right now. Unfortunately, paper is somehow something we've managed to not do without yet. John, do you want me to get started? Yes, go ahead. Okay. I have sent my January 11 notes, which I believe you have, on my opinion that deciding to reuse the existing boiler for building renovation is equivalent to deciding to perpetuate the use of fossil fuels. I'll be happy to explain those notes in further detail if you wish. Basically, boilers burn fossil fuels to heat water. Yes, hot water is distributed in pipes and coils throughout the building to heat the building. Heat pumps are much more efficient and use electricity, not fossil fuels, but they don't use water for distribution. They use refrigerant. Once you put in water-based distribution, you will be in practice always use fossil fuel boilers to heat the water. You'll never decide to replace all that distribution piping in coils. You'll just replace the boiler. But the bottom line for me is that at this time in history, we shouldn't be making long-term investments in fossil fuel infrastructure. Reusing the boiler for me carries with it a high likelihood that we will be doing just that. This is just a feasibility study. We don't have to decide now on the details of an HVAC system that won't be designed for years. It may not ever be designed if Dr. Morris' proposal to the school committee this week is any guide. All we have to do is carry a reasonable dollar allowance for a responsible HVAC system, which the architects have done. At this early stage, at this level of accuracy, there is no significant dollar difference between most of the likely HVAC options. So I asked respectfully that the committee include in its final report a statement, something like this. With our architects, we have investigated on a feasibility basis several alternate HVAC systems, some for new construction and some potentially different for renovation. Amherst's ZE bylaw requires that new construction have HVAC that uses no fossil fuels. However, it doesn't limit the HVAC choice for renovation projects. Nevertheless, considering the gravity of the climate crisis and Massachusetts stated goal of achieving carbon neutrality by 2050, I recommend strongly that any proposed renovated school buildings also be designed with HVAC that avoids any use of fossil fuel energy. I shouldn't have said I, I should have said we. We recommend strongly that any proposed renovated school buildings also be designed with HVAC that avoids any use of fossil fuel energy. Secondly, I've commented before on the size of the ground-mounted PV arrays that are included on the site plans we have seen. I find the size is surprising in part because all of the four net zero institutional buildings that now exist in Amherst have no ground-mounted PV. I would suggest one, using a higher rated PV panel, commercial 370 watt panels will be available soon from Super Sunpower. Two, using a building design that employs south-facing sloped roofs. This will eliminate the need for PV racks and the spacing between the racks. Three, using HVACs to see systems that do not employ rooftop equipment because the rooftop equipment takes up space on the roof. I could otherwise have PV on it. And four, targeting a slightly more ambitious EUI. I suggest 25 instead of 30. Thirdly, at the risk of repetition based on decades of experience, I do not agree that renovation of this poorly insulated, non-accessible, aging, code non-compliant and impossibly configured building with infrastructure in need of full replacement will cost less per square foot than new construction. Thank you. For our presentation, which I've handed out, and we'll hit on costs. I'm not sure we'll get every item on the agenda we need to come back with the next meeting. My hope, and we may not get to here, is that we're getting close to the end of our review cost. We are projecting, I'm jumping, we've got a little bit here, some sort of public outreach event on the 13th, thank you. And so I'm hoping we're nearing enough conclusion on it that we're all comfortable kind of going, being in public and talking about numbers, knowing that we can doubly make some revisions till the day we issue the report. Sure. But that's kind of my preface to the group, even though we're a few bodies short this evening. Okay. Thank you for it. So as I mentioned, we'll talk about the estimates first and then talk about this observation matrix, our homework from last time here. I included this slide again. We have had some emails with members of the committee discussing whether the direct cost in the estimates is in line with benchmarks, basically. If it makes sense, is it credible and does it make sense for this project? And I know we previously discussed this, I just wanted to come back to it perhaps when you think about community outreach. This will reappear to answer some of those questions. In that we've looked at Fort River and we've leveled its estimates cost to the Wildwood School Project that was estimated previously in Amherst. Justin, is there any way you can look at the figure? Or do we have to see it? Sorry. I'm sorry. I'm sorry. Yeah, I'm sorry. Oh, make some large, okay, yeah. TV viewers will be standing out. All right, I've got my computer in front of us so I wasn't looking at the picture. To the Wildwood Elementary School and then also to the Maple Elementary School, it's planned for construction nearby. I believe that's East Hampton, North Hampton. That's what I think in the East, thank you. Can I ask a quick question? Why Maple Elementary School? Because it seems that it's a very big project and high construction costs. So it doesn't fall on the benchmark of the average of MSBA of the projects. It was a local project for one. It is larger, that's true, that probably lowers its cost per square foot. But still, the cost is much higher and it's higher than the average for the MSBA. Maybe higher than the average, but being similar in that it's a local area of building is why we picked it. We don't want to compare it to a Boston or we don't want to compare it to a cheaper market, let's say. That's a good question. So we made this comparison and you can see that if you look at the cost per square foot as reported at the MSBA, the Maple is 500 is much lower than ours at 601 and they're both higher than the Wildwood was at 440. However, it's important to adjust for time escalation, adjust for the PV array that the other projects do not include and adjust for the delivery method that's in that new box that says cost leveraging. So we're as a CM method, whereas Maple was a direct GC type project delivery. So when we do that, our project costs ends up within the two benchmarks we're looking at. And I think it helps to compare apples to apples in that way. And when we think about PV panel costs in the projects and as we're reporting it across the entire 147 options, we've always included the cost of the panels as if you plan on buying them. And I think that's just generally inflating all the costs when you look at other benchmarks as many towns will lease the panels at the end of the day. And something we consider as we're projecting these numbers out, that's what we want to do. Are there any other questions about this? So the PV is direct cost, it's before contingencies. So this is not the direct cost, this would be inflated to include the contingencies. Direct cost was the last side. Okay, so this was in close contingency. You mean the 49.514 at the bottom? For the PV, it includes the contingencies. Right, that at the bottom, direct cost is more like 300. Is that it up top? It is 3.396. Oh, yeah, yes, sorry. Good evening. Any other questions for you? I mean, I guess, I'm sorry, I have to do. Then we'll go ahead. I do share it is a concern about it being a school rather than looking at it. And it is one of the larger size projects and higher cost risk for it. So I would, in terms of taking this and showing it to other folks, I would recommend it against having a school and saying, oh, we're in that ballpark. Are you going to be talking more about the other things? That's the next slide. Okay, so I wanted to get direct costs first. Right, so when I was, when I looked through at the different options that we have are our options and I was using HVAC 456 and the choices A through A, looking at the direct costs, I think those are more in line. And so I think there might be a better way to kind of express this. But which, by the way, which option is this? Is this A456 that's on? This is A, it just, A, like, A, oh, it would be A6, I understand. Okay. And this is bid or construct, or construct amount. This is CM. Okay, so I mean, I think, the trouble is, right, like all of those things play a role in which HVAC system you pick, which of the options, you know, the new or the renovation, and whether you do CM or bid. At which phase things are at in their planning process? Well, that's far up, but even all, just all of those three decisions give you vastly different direct costs. So for example, I mean, if you go down to, let's just even go the difference between like B6, the direct cost when I just look at this, it's more in the mid 300s, whereas A6 is 413. So those differences of 20, 30, 40, 50, dollars per square foot makes a huge difference when you multiply the 85,000 square feet. So. But within our matrix, you're right, if you were to average out all of the options in our matrix, leave F out, because that's not really comparable. You're gonna be at a much lower number than this, it's under here at a 370 or something, which I think that compares very well to a. Oh, no, that's not, that's the direct cost per square foot. That's not, because these are construction costs per square foot, so it's not. That's true. But I compare it to the 418 option A, you'd be less. Yeah. I wouldn't, sorry. I wouldn't average between all our options because if you want to compare to another school, there has to be a new school. A is a completely new, so. Right. Construction, renovation, I think if you want to be clear about the cost, I think if you go, it has to be all new compared to all new. No, I agree. I think the idea of averaging is not great for this. I prefer to pick specific options and make comparisons. Yeah. But I know that we're thinking about averaging, so. Thinking about averaging, what? That we're thinking about comparing our direct costs to an average of MSBA published direct costs which are out there. Or deconstruction. And I find that. For apples to apples, for like-do construction. I'm not sure that's a great approach. Well, I'd like to try to step back half a step and figure out what our goal is and how we want to present the numbers to the general public. Because we have to demonstrate a certain credibility even though we're never gonna be exactly done because we're never actually gonna produce a building as part of this. And so the numbers will never quite get that refinement. And so I don't know if it helps to get a little further into the presentation tonight and then have that conversation, but. Yeah, sure, but let me just, I'm not really sure what we're trying to accomplish by figuring out what's a comparable and what's the right point in time for the comparable and all this kind of stuff. I mean, part of me thinks that if you build in extra uncertainty into the budget because you're talking about a building that in this theoretical concept is gonna be built in two years' time or something, or three years' time. You know, an alternative approach would be to present two numbers. One number is saying, this is just hypothetical, it's feasibility study. One way you could say is, deliver me a price tag with all the still vagueness of the fact that it's not a final design for now. Like remove those other uncertainties and say, only put in the contingency you'd normally put in. Put in the wiggle you'd normally put in because you're not a final design. Strip away the inflation adjustment and say, if we were building this building right now and going to final design in next stage after the end of the feasibility, here's the price tag. Since, by the way, we're not doing any of those things and it's possible this will be three years from now, here's what this looks up marked up for the uncertainty and for inflation adjustment and just have both of those numbers. One of them's gonna be lower than the other but at least it being, I don't know. Anyways, so. Once I get the segue to the next slide. Thank you. You're welcome to try it. So the next slide deals with those markups that are in our estimate. And it's something we've talked about before with you that you have a direct cost which is sort of your estimate for the materials and elements that are in the project and then you have some contingencies which reflect the fact that the documents in this case are very sketchy. We're at the very beginning, it's a feasibility study. So we're holding some money for developments that we've developed to design and reflecting the fact that the estimate can't be that precise at this point and so that money is there as a design contingency of 12%. And along with CM at risk comes the construction contingency which is industry standard about two to 3%, we have 3% there which is part of procuring this project through CM at risk or CM type approach. And I'm pretty sick on through these, I'm not gonna do it all again, but I'll say that some total of these markups to get to construction costs from direct costs is currently 26% and that's not including escalation which is the other thing that you just mentioned, Eric, that we know this project wouldn't be done today, it would be done at some point in the future. We assumed it would fall of 2020 and so there's money related to the fact that money is going to continually increase and value will escalate and so that's also in the budget. But the question that was raised of us was is this 20% markup in this part of our estimate higher than industry standard and for what reason would it be higher? And it was a good question and it's something I've put to our estimator and I don't have a response yet but I anticipate our professional estimator will say that this is where we should be for this project. But these things make sense to me when I look at each one but when you point out that it's come out higher, I think one response to it being higher is that it was higher to an average of schematic design level projects and this being feasibility studies we're going to have a higher amount of wiggle room as Eric described it and so we have 12% for design contingency in schematic design we might be down to 10 or eight. So you could see two or 4% of this higher markup just due to the fact that we're in feasibility and the MSBA projects are in schematic design. So that would explain some of it. I'm not sure that's a complete enough answer though. I'm asking you do you feel that we should adjust some of these? So thank you for doing that. I had looked at the MSBA data and as you mentioned, what's available on the website is schematic design. So very different parts of the process. And if you look at the average 2019 starts that markup that you're talking about the 20 that we have a 26, it's more on the order of 19% maybe 20% for the others. So just to give you a flavor of what does that do to the final bottom line? So you're going to take that and then you're going to compound that by saying there's going to be an escalation and you're going to take that and say, right, we've got soft costs on top of that. The difference in total project cost by using a 20% versus a 26% is on the order of $6 to $8 million depending on which of the... Yeah, which of the options. And again, I just looked at HVAC 436 for all of them, but that's what I think we have to understand and what we have to convey that that's a big number. So when we're trying to explain that to the public, it's just to say like, maybe we want to, maybe we don't want to bring that 26 too far down but you should understand that the difference that it makes, you can drive a big hole through. $6 to $8 million is a huge difference in final total project. The number that everybody will think of as what does that cost? That's the total project cost. And so these assumptions make a huge difference. The new. So essentially it's one classroom size. $6 million, $1,000 square feet, that's $600 per square foot. That gives you one extra classroom. Other people have thoughts and questions on where we feel comfortable with the contingency. I thought at the last discussion, last meeting, you were saying that for option A, you'd be most likely to do a GC procurement. So I'm wondering why we're throwing in C and contingency here and just a little bit of escalation for all 2017, is that a typo or is that word? Backing down to 2017 for us or something like that. We're in that benchmark for that though. On a different page, what's the previous page? Oh, previous page. And then just for clarification, it looks like based on your PV size here, this is an estimation done at an EUI at 50. We're not, this cost estimate doesn't take us down to 30. Yeah, I appreciate these two questions, they're great. So when we began the study, we threw the net out and we caught up a whole bunch of options. And then we're consistent. We kept CM as the project delivery method. And we kept EUI at 50. And then we'd get it everywhere. All the HVAC systems could get it. And I think your question gets at something I'm actually somewhat interested in, is does it make sense to report out that result, which is just sort of the raw data? Or do you think about it a little bit and say, well, we wanna do EUI 30 and we want to do, and we see a value in doing a GC approach. So why would we project out the cost to do CM approach for a new building when it can be a GC approach? And I think it's like making these more realistic. I think that's what you want to project out at the end of the day. So I've been sort of struggling with that against our mission to not select an option. But I think that, I don't think it means we're selecting an option, just means that we're sort of refining our understanding of an option. I think it does require us to focus in. I don't wanna do that on 147. I think we've done that exercise, but we should probably pick a few that seem to have merit and start to look at them more closely. And then I think you'd have this inoption that I think you're describing, which is a new building, EUI 30, that's just put it to a mechanical system that has a number attached to it. And let's make that recipe of option A. And then that could be our option A. I mean, I think if we're doing a chart comparing them all, I see the merits of keeping it all up to CEM for those, but since it looks like maybe we're gonna pull one out to really say, this might be the representative case or the best case or the recommended case, I don't know, then we should probably adjust the- Or just the representative case for model A. Because in truth, it's hard to imagine this community not doing a GC approach for a new building and given the goals that we have as a community, doing the EUI 30, to me, that seems reasonable. When we get into the renovations it gets, there's just a lot of permutations there and that's kind of a different issue in my mind. There's just so much variability, which I think is good in a sense, but it's also hard for both us and I suspect in the community. I agree with that. I think it makes sense and I think it's possible that this is feasible. I think it's good to do literally both, that if you're gonna show all the options together, keep them apples to apples, but then pull out the case of A, whatever it is. And realistic A. And realistic A, that's more refined. I think that makes sense. Going back to this question of how do we I think to me, and maybe I'm being stupid and if I am fine, just tell me that. But if the concern is trying to be as realistic as possible with the costs for a project that we're sort of projecting out into the future, it seems to me that either you have to try to be able to show and speak to the public in a way in which they understand that to the extent that additional costs are loaded into the project, it's because of uncertainties that exist both because of where we are in the project concept and also where we are in time. And so that we're sort of buying into the idea that we know that if you're sitting here right now in January 2019, this is in fact probably a more expensive project on paper that actually would come through in reality right now. But that's because of the exercise essentially you're going through is saying, if I'm being asked for my best advice on the feasibility and costs of a project concept that potentially could be built in two or three years, this is the exercise as a professional and I have to go through to give you that best judgment, knowing that that creates a higher sticker price than there might actually be true two years from now and certainly it would be true now in all likelihood. The only other way you can go, and this is a more conceptual modeling exercise, is to strip away some of those things and I'm not suggesting this, I'm just literally saying, the only other way you can do it is by saying, let's pretend for the sake of argument that we're closer to actually going to bed. What would that do to some of these assumptions? And then the other question would be, what if we assume that we know more about the project cost than we do? That second one sounds really dangerous, meaning your design efficiency sounds more dangerous because then you're literally creating sort of a fantasy black box in which we genuinely don't know what we don't know and we're essentially assuming for the sake of argument that the costs are gonna come in lower than those would think they would. The first notion though, I was saying, let's just pretend we're going to bed in January 2019. I don't really care. I mean, if it makes it easier for me to accept the number because the number is lower because it's a hypothetical project being done now, I don't care if we show that because also it would make the price tag lower and that lower price tag the point is it's hard for people to conceptually say if your first thing you're doing when they're reading a report, sing a PowerPoint, is pretend it's three years from now when you're looking at the other members, who does that? No one does that. Yeah, I mean, the whole project is theoretical. So we're not just pick, we have to just pick someplace and go. I don't think, and I think going, if we're putting this report out in January of 2019 that's the pricing we should use. I don't see us pointing it now. I don't see the benefit of it. And then I come to the side. Sorry. I think. Oh, did you have your antenna for a second? I'm not sure, actually. I had it up, didn't you? I had it up, I don't expect you to. I disagree. It's a feasibility study and we should be talking about what's feasible and a number based only on today and not planning out for when construction could feasibly start is, I think it is service to the community. That's all. Okay, so I think what we're kind of all getting around is we want to produce something that that's going to be the best information upon which to make decisions or to make projections. So you don't want to air too much on the underside. You don't want to say, oh, we're pretty confident that this isn't going to escalate, right? But on the other hand, you don't want to over inflate either. So I think we do have to find some middle ground there. And my question is, can we find out what, for the projects that we're done, that we have schematic design on, is there a database that we can say, like, where were you when you were at PDP or PSR somewhere during the process, earlier stages, more like where we're at now and get a sense of, hey, what happened to your markups? Did you go down, did you go up, you know, or how much further did you go? Is there information upon which we can make a reasonable guess? And I'm going to show a little bit of ignorance here that I don't know where in the MSBA process that first estimate kind of happens. It is to PDP, okay. Yeah, that's accurate. And I mean, we have our experience with other PDPs and other elementary school feasibility studies that we draw on. And I would say this feels pretty consistent. And so for you to have it pointed out that it was higher, it was like, oh, wow. So I think we can try to sharpen our pencil with the estimator and see if any of these have maybe been overly conservative. And so we started the process but I don't have any feedback yet. For example, GCs, you know, we've got a 24 month construction schedule. You could probably do this building for 22 months. So even right there, you reduce it to a certain extent. But we'd have to, I think, continue to speak about this with our estimator. I'm not exactly sure how much it would come out if it would get to where you're trying to go. But I guess you don't really want to go anywhere. If you just want to know where we're right or where it's going to break ballpark. Right, I'm sorry. I have two comments. First goes from things at the back that we were talking about, realistic A. I think we have to go, if we're not too realistic A, it should be realistic A, B, C, B. Not just only A. If we're going to, if you're not sure, something would be more than 10 on A. I think it has to be realistic B, realistic C, and so on. The other question I was having, and this is my ignorance, is 12% design contingency, that's okay, now we are designing the feasibility. We have some costs and there's a 12% possible escalation. But does it always go up? Or is it a fact that, because one thing, one other way to do it is to decide the budget and you design for that budget. Because if this means that it always goes up, right? Or is it a matter of like when you have the space, you expand. You include it in the contingency, so then you, then yourself go and expand to the budget. Because I would expect the same contingencies would be go up or down. If it's a variation, it should be up or down. I get the concept. The reality is the scope, as you design a project, does go up and down. However, the estimate is only picking up the big pieces at the beginning. And so it's as much reflecting the estimator's approach to the estimate as it is the actual scope going up and down. But that's what I thought it should be, that there should be plus or minus certain amount. It could be overestimating the design state at this feasibility stage. In the same way that they could be overestimated, they could be underestimated. And here we always count over underestimation. So a 10% increase means that right now on the feasibility we are underestimating and not overestimating. So the question I have is in the same way that if you have space, you occupy it. If you have contingency, you occupy it because you're already taking the time. It's embedded in your overall budget and everything else. That's my name. Yeah, I think it's tied up in the way that the estimator works. So I don't think that as you develop the project you, and if you maintain the same scope, it's not going to end up 12% less somehow. It's that the estimator is not able to see the kind of detail. There's unknowns in the drawings. And so this figure is identified. It's his typical expectation of how much scope he can't see at this point. And it's consistent with their experience estimating projects. I'm just gonna say, can we get this to a decision point? I'm a little bit lost in this whole. If I could, I think I would like to suggest is that if Jesse go back, talk with the estimator, make sure that these feel like they're within industry norms and report back that they either are, in which case we would move forward with them, at least that would be my recommendation. If they're not, then adjust them as needed to be within industry norms. And when you say these things are within industry norms. Sorry, I'm not talking about the. To these 20, the 20s. Yeah, you know, is 12% the right number for the feasibility study and for this project type. Same thing with construction, contingency. Across different project types and different industries, these can vary and do vary. Although they feel generally right to me. They're not, they don't feel wildly off. We'll double check. Okay. And keep in mind that we'll be tired.