TRAVERSE CITY — Typical construction costs go up about 3 percent from one year to the next. Kris Gerke, who works at the construction company Wolgast Corporation, said that number is looking more like 30 percent this year, at least for school construction sites.
Gerke currently manages construction projects in more than 10 school districts north of Saginaw, including Benzie County Community Schools. He said one of the main challenges presented to school districts with construction projects right now is that their pre-COVID budget estimates fall short of the actual costs of the projects.
Before schools can get started on a construction project, they have a budget approved and then compile bid packages, which include the designs and specifications for their desired projects, and send them out to different construction companies. The companies then send back their own estimates for how much the proposed project would cost.
However, getting started on a construction project is a lengthy ordeal. School districts often get their budgets approved about one year before they send out bid packages, which in turn take weeks to get returned. As a result, some school districts across northern Michigan are seeing their projects come back hundreds of thousands of dollars over budget because of inflation.
Benzie schools had a budget of $38 million approved for multiple construction projects in their district, including additions to Lake Ann Elementary School, updates to Betsie Valley Elementary School building, remodeling the high school, a weight room addition to the high school, a new elementary school building and a new transportation building.
Every project Benzie has put out for bid has come back over budget, Superintendent Amiee Erfourth said. The new transportation building had the largest increase at $900,000, mostly because the cost of steel has “skyrocketed,” Erfourth said.
Benzie’s current transportation building is still in working condition, so their board of education has put that project on pause and planned to use its funding to cover the overage of the other construction projects until they see how the rest of their projects return.
“They want to make sure that the money that we have — $38 million — impacts kids first, that’s their No. 1 priority,” Erfourth said. They want to make sure that the dollars that they’re spending are going to make the biggest impact on kids.”
Erfourth said the new elementary school is the most expensive project and their top priority. Benzie school administrators worked with their architects to redraw the designs for the new elementary school and preemptively cut out 5,000 square feet of the original designs in hopes that that will keep the school closer to its budget.
“We really had to go back and go: is this more of a want than a need?” Erfourth said.
Gerke said school districts don’t have a lot of options when it comes to adjusting projects when they come in over budget — there are scarcely any options to get more funding.
“Most of the districts don’t have a lot of wants, they’re very much needs — roofing and heating and windows and doors, you know, stuff that’s been neglected,” Gerke said. “So in order to reduce the cost, the only real option is to reduce the scope of work.”
Along with increases in costs, Gerke said supplies and workers are still tight in the construction industry. Metal products are especially in short supply, while other products will experience shortages in ebbs and flows
“It hasn’t improved over the last year,” Gerke said. “I think we’ve just learned how to deal with it better.”
In November, Christine Thomas-Hill, Traverse City Area Public Schools Associate superintendent of finance and operations, said TCAPS’ construction project for its new Montessori school building was 11 to 14 weeks behind schedule.
Delays in inspections, a lack of workers available to work construction sites and shortages of important materials for the new Montessori school have all contributed to the delays at the TCAPS site.
Thomas-Hill plans to give further updates on the construction of the Montessori building at the TCAPS Board of Education’s upcoming Finance and Operations committee meeting on Feb. 7. She declined to comment or provide updates on the Montessori construction project before that meeting.
Leland Public School has had a different but similar experience with their most recent construction project.
Superintendent Stephanie Long said her school district’s $25 million construction project got caught behind schedule before the pandemic and was never able to catch up.
At the beginning of the pandemic, Long said the construction project paused for over a month, after which the school district struggled to find construction companies with the time or the staff to pick the work back up again.
Supply chain shortages were less of an issue for Leland, Long said. Most of the materials for their bond project were ordered and stored before the pandemic.
Leland’s construction projects included a new central office, new middle school classrooms, a new music classroom, a new gymnasium and a new elementary school. The gym was about 10 months behind schedule when it finally opened, and the elementary school was meant to open in fall 2020 but opened instead in spring 2021.
Long said the biggest complication that came out of these delays was the stress placed on teachers. Many teachers at the school had to operate out of makeshift classrooms for months at a time.
“They had to be incredibly accommodating for almost two years,” Long said.
Gerke said a lot of school districts will have to make cuts or scale back on projects like Benzie, despite there not always being room to do so. The schools he’s working with are doing well to make these projects work anyway, he said.
“The school districts are doing everything in their power to try and make these dollars go as far as possible. So I give the districts a lot of credit, because these are very difficult choices.”