Burlington’s city council has indefinitely postponed the sale of $17 million in bonds due to precipitous cost increases in two recreation projects that they were intended to bankroll.
The five-member council reached a consensus on Monday to shelve these particular bonds, which were scheduled to be issued later this month to fund a new superstructure for the Maynard Aquatic Center (MAC) and an expansion of Burlington’s Paramount Theater.
In each case, the council’s decision was based on unanticipated spikes in the cost of the aquatic center’s housing and the theater’s expansion, which the city had originally budgeted at $6 million and $11 million respectively. According to city staff members, recent bids from prospective contractors have effectively doubled the price of the pool’s housing and driven up the expense of the theater’s expansion by more than a third.
Rather than make face Sophie’s choice between the two projects, the council resolved to put both ventures on hold for the time being.
“We in good faith went to the community and said this is how much we’re going to spend,” Burlington’s mayor Jim Butler recalled on Monday before the council agreed to postpone the sale of the associated bonds. “I would not vote to spend a penny of the money on one project at the expense of another because that’s not what I told the public we were going to do.
The council had originally floated the aforementioned cost estimates for the pool and the theater when it decided to roll these two endeavors into a $47 million bond package that the city’s voters narrowly approved in November. The local electorate also gave a more enthusiastic nod to a second, separate package that promised to raise $21.5 million for various street and sidewalk improvements.
Two weeks ago, the council formally voted to issue the first $16.5 million of the street repair bonds on April 29 along with $17 million from the recreation-related package for the aquatic center and theater. In the meantime, its members resolved to hold off on another $5 million that the smaller package had allotted to downtown streetscaping as well as $30 million for a proposed sportsplex that had comprised the bulk of the bigger bundle. In each case, these projects were simply in too embryonic a state to move forward with the corresponding bond issues.
In preparation for the forthcoming sale, city staff members had begun to solicit bids from prospective contractors in order to proceed with the first batch of projects as quickly as possible. Yet, the submissions for the two recreation-related ventures left staff with an unanticipated conundrum, according to Peggy Reece, Burlington’s finance director.
During the city council’s monthly work session on Monday, Reece acknowledged that the most reliable estimates for the theater had come in at about $14.6 million – or $3.6 million more than the city had budgeted. Meanwhile, a hard-sought bid for aquatic center’s new housing surfaced at $12 million – twice what this project was projected to cost when a consultant priced it out in 2022.
Reece went on to admit that these cost estimates have presented a bit of a head scratcher for the city’s elected leaders.
“We could just do the pool or we could just do the theater,” the city’s finance director acknowledged. “Or we could do neither and go forward with selling the bonds on the streets.”
To add to the council’s consternation, Reece acknowledged that the bids that the city received for the aquatic center and theater are set to expire toward the end of May. She added that, if push came to shove, the city could wait until May 13 to issue the bonds for either of these projects – although she conceded that the authorization of this delayed sale would require the council to hold a special called meeting later this month.
In response to the finance director’s ultimatum, council member Dejuana Bigelow admitted that her own preference would be to move ahead with the aquatic center’s new housing, which is meant to replace a steel-framed edifice that the city tore down in light of its advanced deterioration. Bigelow recalled that the prospect of restoring the Maynard Aquatic Center to its previous, indoor state had been a big selling point with the residents who had told her they intended to vote for the recreation-related bond package in last year’s general election.
“The one thing that everybody wanted was the MAC,” she recalled. “But they had to vote for two [other projects] to get that…[So,] I’m completely sold on the MAC.”
Butler said that he, too, was all in for the aquatic center’s housing – at least when the price point was still $6 million.
The mayor went on to ask city staff members to explain what caused the cost of this project to shoot up to $12 million. In response, Reece pointed to the recent impact of the President’s ostensibly “reciprocal” tariffs as well as the relative eagerness to contractors to take on new jobs when the city first calculated the cost of the aquatic center’s new housing during the trailing end of the coronavirus pandemic. In the meantime, city manager Craig Honeycutt noted that the city’s previous cost was based on a consultant’s ballpark estimate rather than an actual bid from a contractor.
We didn’t have true construction [costs for the aquatic center],” he added, “because we had to get a figure very quickly [for last year’s bond referendum], and that was the only figure we had.”
Meanwhile, Fred Patrick, a project manager in the city’s employ, observed that contractors have been reluctant to tackle the pool’s proposed housing due to the tricky nature of the work site.
“The difficult thing,” he went on to explain, “is that a lot of contractors didn’t want to build over an existing pool.”
In the final analysis, the council concurred that there simply isn’t the time to make a well-informed choice between the aquatic center’s housing and the theater’s expansion.
“Ultimately we have 7 years to deploy this money,” Butler told the rest of the group during the work session, “and I would struggle making a financial decision under pressure for a project that was double what was originally estimated.”
“I agree with that,” added councilman Bob Ward. “I don’t feel we have to rush into it.”
The council had no qualms at all about pressing ahead with the sale of the bonds for the proposed street and sidewalk improvements. These bonds are still scheduled to be issued on April 29, although city staff members don’t expect to have bids for this work in hand until early next week.
The city’s administrators assured the council that, regardless of where the bids on this work ultimately land, the city will simply work its way through its list of top-priority sidewalks and streets until it runs out of money to repave and repair them.
Later during the work session, David Bowman, the city’s principal engineer, went over the game plan for these infrastructure-related improvements. Bowman said the current expectation is that the city will expend $4.5 million of the $15 million set aside for street work during the current calendar year along with $500,000 of the $1.5 million budgeted for sidewalks.
Due to the potential variability of the cost for this work, Bowman was reluctant to publicize a list of the locations targeted for these improvements in response to a request from council member Bigelow. Morgan Lasater, the city’s community engagement director, nevertheless agreed to upload a tentative roster of these areas to Burlington’s website. Meanwhile, Butler observed that the highest priority locations will remain more or less fixed regardless of how far the city is able to stretch the revenue it gets from this month’s bond issue.
“It doesn’t change what streets,” the mayor said; “just when [they’re repaved].”
Read the newspaper’s editorial page comments on these escalating costs: https://alamancenews.com/burlington-officials-and-voters-hoodwinked-by-lowball-cost-estimates/
