Finance Committee - 11/18/2020 Page 3
Essentially the subcontract costs were up by about $600,000.00 and the construction management
contingency fees are up about $200,000.00. So this Committee ought to ask the question why the contingency
construction management contingency fee go up and especially why did the subcontract costs go up. That
combined $800,000.00 increase with some minor reductions elsewhere, there’s a total increase like | said
before of $600,000.00. The committee ought to look into that.
The outstanding item that | paid attention to that in the spreadsheet, like | said it’s on page 61/62, there is no
contingency for the design. There’s contingency for construction managers and some other contingencies. |
ran my own spread sheet from this thing but there is no design contingency. | don’t know what that means.
And looking back at the original presentation by ICON back in 2 January, there was no design contingency
then either and | don’t remember anybody asking that question. | attended that meeting. There is no design
contingency, what does that mean? Does it mean the design is done, no changes, or the changes are picked
up elsewhere? Architectural fees for example. It’s not clear to me where the design contingency is in this
guaranteed maximum price.
The spreadsheet is kind of interesting, there’s $100,000.00 difference between — if you add the salary on
pages 61 and 62 versus the guaranteed maximum price, presented in your resolution, there’s actually a
$100,000.00 discrepancy, not a very large number, but still the actual additions add up to about $100,000.00
more than the guaranteed maximum price. | don’t know if anybody through Tim Cummings has checked these
numbers. But for the record, | don’t know who is attending from Harvey but they ought to answer the question
why the additions are off by $100,000.00, and it favors the City. The numbers of $100,000.00 more as in the
resolution.
Now there was a Zoom meeting 28 October, | did not attend the meeting, | forgot about it but Tim Cummings
told me in an email that they cut about $800,000.00 from the estimate that was presented on 2 January. Now |
don’t know what was cut. You can’t, you know, there’s a very lengthy exhibit that lists all the drawings and
there must be several hundred drawings in this design. Of course the drawings are not part of your package.
There are huge amounts of design information but the $800,000.00 that was cut, so it’s not clear what was cut.
He mentioned that the second elevator was cut and | don’t know what the impact there is. It’s probably up to
the Finance Committee. There are two elevators. The second elevator was cut some additional cuts. But if
you combine these two, there’s a $600,000.00 increase in the estimate presented earlier in the year as
$800,000.00 on the cut and there’s a combined impact price of $1.4 million dollars. That presents about 10%.
It’s not necessarily upsetting because it is an estimate final, you know, nailing down a guaranteed maximum
price and guaranteeing that. Ten percent is not unreasonable, but the thing is it ought to be understood. Why
is there a $1.4 million dollar difference and Tim Cummings ought to address it.
The final point I’ll make there is a lengthy list of exclusions. Again, not everything gets nailed down. Many of
these things deal with security cameras and security and of soil that may be contaminated, unseen defects in
the existing buildings that is going to get thrown down. Bult the list of exclusions that is Exhibit - | think it’s J -,
well anyway you have an Exhibit list of exclusions. There is also a list of exclusions for Exhibit 8 its estimate.
The list of exclusions in the later Exhibit is much lengthier than the list of exclusions within the estimate and
that’s problematic. The list of exclusions ought to be at least understood. The list of exclusions sets you up for
change orders; change orders are expected. There’s got to be a certain amount of contingency in the $25
million dollars estimated at least a $1 million dollars of contingency against unforeseen problems which are
listed in exclusions and there may be exclusions outside of the exclusions that are later on found because you
are dealing with tearing down an old building on the same site and putting up a new building that’s actually
next to an existing building which is called the apartment building. So it’s a fairly complex operation.
But in your Resolution there are two lists of exclusions - one a lengthy one and one a not-so-lengthy and it
ought to be understood. That’s the result of my comments, | am not against, | am fairly impressed with the
presentation by ICON and Harvey in the attachments to the Resolution and | understand the Finance
Committee only has so much time to get into this one because there are other items on your agenda. So you
may ask Tim Cummings a few questions along these lines and then let the Steering Committees deal with the
rest. Thank you for listening to me.
