Surplus funds to be used to offset debt on the project
By Kellen Olshefski
Correspondent
In discussing a change order last week for the City Hall project in Elkhorn that will add wainscoting throughout the entire building rather than just public areas, City Administrator Jim Heilman noted the project is well under budget – to the tune of about $900,000.
Heilman said when the city bid the project it was with an alternate for wainscoting to help protect the walls. When those bids were received, they came back significantly less than what was anticipated, so city officials opted to include the alternate.
“The bid price was significantly less; we got a great bid,” Heilman said. “That’s how good the bid came in. We didn’t see this coming from a mile away … it was an unbelievable bid and these guys have done a fantastic job out there.”
With the cost of the project split between the city and water, sewer and electric utilities, Heilman said the city’s split is a little more than 50%.
According to Heilman, state statutes require that any budgeted money saved go toward the debt retirement account, meaning that savings will be used to pay the debt on the project until it’s used up.
However, Heilman noted, these savings will end up being passed along to taxpayers in a sense, with the saved money being used to lessen the tax load on citizens over several years, rather than simply paying it all at once and seeing a higher tax hike next year.
Heilman also pointed out that the city received such a high premium on the bid that the premium is already covering the first two years of interest on borrowing from the project.
“The residents didn’t pay anything on the building this year; it’s all covered. Next year, there’ll be a small principal payment … no interest, covered,” he said.
“The luck of hitting the right area, you kind of knew it was a good area to bid in, but the premium was high and then we got such a low bid. I couldn’t have been happier … it’s the best project since I’ve been here in a number of ways,” Heilman added.
As for the wainscoting, Heilman explained that the original bid alternate only included wainscoting in public areas rather than the entire building. He said in aiming for longevity, it makes sense to add wainscoting throughout to help protect the building’s walls from knicks, kicks and more.
“It does give it a more professional look, but that’s not the reason,” he said. “The reason to me is that it protects the walls long term.”
Heilman said the price of $43,180 he included in his memo to the Elkhorn Common Council is based on the current unit price, however, there is material that won’t have to be put in because of the wainscoting, meaning its addition shouldn’t exceed $40,000.
“I think it is a good add for the longevity of the building,” he said.
A motion to approve the addition of the wainscoting at a price not to exceed the $43,180 listed by Heilman was approved unanimously by the council.
