Finance Committee - 11/18/2020 Page 16
Director Cummings
But then relative to the actual owner of the project and again, this is because of how the New Market Tax
Credit is structured. The City of Nashua is not going to be the owner/developer of the project, it’s being
transferred and assigned. So this is something we will get into more detail on the 24", but | do want to make
sure that is clear to folks. There is robust owner’s contingency, as the previous speaker pointed out, there was
an endowment, that endowment basically rolled down into owner's contingency, so we are carrying about a
$1.8 owner’s contingency now. That’s on top of the $600 ish that is being held by Harvey that’s the
construction contingency that | was referring to. So | just wanted to make those points clear and | think that the
conversation on the 24" will be really helpful because we will get into more granular detail about how we are
structing this deal to proceed. But at the end of the day, the $25 million should be more than sufficient to cover
the cost for this project, | agree. Thank you.
Mayor Donchess
Alright, thank you very much.
Alderman Dowd
Mayor?
Mayor Donchess
Yes.
Alderman Dowd
Just a couple other things. The exceptions that they were talking about, those are usually unknown unknowns,
in this case probably unknowns known; a company being knowledgeable of things that could happen. They
put those in there to make sure that it’s Known that it’s not being covered under the guaranteed maximum
price. If they encounter those things, it would have to be covered by a change order. A change order would
have to be approved through the process. Also, the contingency amounts are, as you go along in the project,
when they realize that they are not going to spend the entire contingency that are in design or construction,
that money comes back to the project, in my case, to the City; in this case to the owner. So they don’t get to
keep it.
The other thing is there may be a lot of change orders, but right now we are experiencing a few change orders
in the School System in the three Middle Schools, but we’ve had as many positive change orders, in other
words, money coming back to us as we have in money going out. Some of the change orders that we have
experienced are things that we are doing because of COVID-19 to help the students with air circulation and
other things. But you will get positive change orders that have money that reverts from the guaranteed
maximum price. Again, the guaranteed maximum price doesn’t change upwards unless there’s a change order
that drives it that way and it would have to be approved by whoever has authority to approve change orders.
In the School Projects it is the Joint Special School Building Committee, if it’s over $50,000.00. So just wanted
to clarify that or help clarify it for anybody listening. Thanks.
Mayor Donchess
Thank you, Alderman Dowd.
