Over the past 7 years, I have tried my best to provide updates on the jail project at key points along the journey. This past week we definitely arrived at one of those key points, as the bids were returned from the various contractors, giving us for the first the actual costs of this long overdue project.
If you recall, last summer, the County voted to move forward with the project without sending it to a referendum. There were many reasons for this decision, but one of the most critical reasons was that we really do not have any options, so even if the referendum would have failed, we would still be faced with the need to move forward. It also isn’t a project that could be sent back for any further reductions, or revisions as that work had already been done. Four years ago, the proposed Public Safety Facility which included the Sheriff’s Department and Evidence Building was estimated at 35 million. At that time, we went back to the scope of the project, scaling it back to just the Jail and supporting spaces (Kitchen, Medical, Dispatch). With those reductions, the project was then proposed at 21 million dollars. We then moved forward with planning and preparations to prepare it for the Board’s approval, and decision regarding a referendum.
By the time this came in front of the board for this action, the projected cost for the new facility was now at approximately 26 million dollars. That number was an estimate based on similar projects and what the building environment was at that time. From that date on throughout the next year, we spent almost every week in meetings drilling down on the actual building plans so as to develop a specification guidance to be used for the actual bid documents. During that time, we further refined this project taking out anything and everything that we could short of violating code in an effort to keep costs down.
The unfortunate reality is that while we were diligently cutting where we could, the market and inflation were not only consuming our cuts but sending this project’s costs beyond that which were proposed. As you can see, while we were taking the time to be diligent and methodical in our planning, the costs of this project continued to escalate, to a current cost of 33 million. The good news is that this number for the first time is locked in as the contractors must honor their bids for 45 days, which in this case is late July. This aligns with the date that the board will take action on this matter which will be at the July 18th County Board meeting. Once that 45-day benchmark is past, we will once again be faced with continued cost increases.
So, what are the financial implications? This is where we are fortunate to have Paul Kunesh as our Finance Director for Kewaunee County. He has done an amazing job at putting together the various financial projections as well as various options for the Board to consider. In general terms, it breaks down like this: The original number of 21 million dollars of debt would have meant .20 cents per 1,000 of assessed value. If the board were to take on an additional debt of 3 million dollars, it would increase that amount to .35 cents. By using some of the existing fund balances that we have saved up over the years, we could reduce that to only incurring a 1 million dollar increase in debt bring the impact to .25 cents. The third option provided would require the use of numerous current and proposed fund balances, which would not increase the debt level beyond what was proposed last year.
The two main considerations in all of this are First, we can no longer exist in our current facility, and any expenditure on this current structure would be a band-aid approach which would still bring with it additional operational costs, and never truly be a solution. The Second is that the longer we wait, the less facility we will get for our money. You can see how even in our efforts to be cautious and frugal, the ever-increasing costs that we all have faced in our daily lives have and will continue to impact this project as well. In next week’s article, I will re-visit why the current facility is no longer feasible, and the implications of any possible renovations.
I ask that if you have ay questions, to please feel free to contact me. I will do my best to meet with you either here at our offices, or even in your home, to answer any questions you may have. This will be the biggest capital project this county has embarked upon, and we have gone to great lengths to make it a project that will result in a facility that we can all be proud of, and one that will serve the needs of our community today and well into the future.
