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Surprises In Waterbury Could Spike Costs For State Office Complex

AP File/Toby Talbot
In this November 2013 photo, a worker disassembles a building at the state office complex in Waterbury.

The good news is that the biggest construction project in state history is on budget. The bad news is that it might not be on budget for long.

A deal with a construction firm has cleared the way for the rebuild of the state office complex in Waterbury. But lingering uncertainties over the massive renovation still threaten to add to the project's costs. 

It’s been nearly two and a half years since Tropical Storm Irene flooded the state office complex in Waterbury. And on Wednesday, administration officials finally cut a deal that will ensure the return of more than 900 state workers.

The $90 million construction contract still has to be approved by the Agency of Administration and the Attorney General’s office. But the new agreement, combined with other project costs, keeps the state within the $125 million lawmakers have authorized for the undertaking.

“The significance is we know that we’ve got a project that’s on budget at this point in time,” said Mike Stevens, special project administrator for the Department of Buildings and Services.

Stevens said he’s feeling good about where the project is right now. But he said the more he learns about the historic building at the center of the project, the more worried he becomes about potential cost overruns.

“In one area of that historic core that has been completely abated that we can walk though and put our eyes on, that says, ‘whoa, this is a little different condition than we expected to see here,’” Stevens said.

Potential structural problems and the work needed to bring the building up to modern construction codes could add up to millions of dollars in unanticipated costs, Stevens said. And while the contract with PC Construction, the South Burlington firm hired to perform the work, might keep the state on budget, it doesn’t leave much for contingencies.

Stevens said he’ll only have about $5 million – 4.2 percent of the overall project budget – to cover overruns or change orders. And with so many potential structural surprises awaiting discovery inside that historic core, Stevens is telling lawmakers that $5 million might not cover it.

“Identifying all the unknowns today can’t be done,” Stevens said. “To get us on budget at the end of the day, I think we need a little bit more wiggle room to make some decisions.”

So Stevens and Commissioner of Buildings and General Services Michael Obuchowski are encouraging lawmakers to authorize a contingency fund of up to $12 million – 10-percent of the total project cost, and $7 million more than what’s budgeted now.

Rep. Alice Emmons, the Democratic chairwoman of the House Committee on Institutions, said project overruns could significantly affect the budget. But she said the overruns wouldn’t impact state spending until fiscal year 2016 or later. And Emmons said she appreciates the administration voicing its concerns now, so that lawmakers have time to prepare.

Emmons’ committee will consider the administration’s request in the coming weeks.

The basic components of the project include a new 86,000 square foot office space, a 20,000 foot central utility plant, and the renovation of the historic core. But Stevens said his department has dialed back on some of the amenities to keep things within budget.

“The atrium of the new office building had some laminated wood beams that were to represent trees,” Stevens said. “That aesthetic element has been subtracted from the project as a cost savings.”

The state has also decided against subcontracting for interior signage, and will instead delegate that task to the Department of Corrections, which operates sign-making facilities run by Vermont inmates.

Stevens says the cutbacks won’t impact the overall aesthetic of the new office complex – a Waterbury artist has been commissioned to paint a large mural on an interior wall the atrium. And he says the state has also retained the energy efficiency features designed to reduce the heating costs, and carbon footprint, of the new complex.

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