BERKELEY HEIGHTS, NJ -- Every construction project has unanticipated delays and the Municipal Complex Project is no exception. In three weeks, the building will be weatherproofed and work can begin on the interior. The entire project, which includes the new municipal complex, demolition of old buildings, new parking areas and paving of the existing lots and signage, was expected to be done by May 1. It is now scheduled to be completed by Dec. 29.
On Tuesday night, experts -- Ted Domuracki, Sean Edmonds, and Eric Chait -- from Mast Construction Services, which is overseeing the project for the township, and the township’s Bond Counsel Matt Jessup updated residents on the status of construction, its timeline, current and previous change orders and the budget.
The news was not good -- the project is over budget and behind schedule. Originally slated to be completed by Sept. 2020, the new completion date is Dec. 29. The original cost of the project was estimated to be $28 million, but, In July 2018, the council approved “a supplemental appropriation of $4 million for aid to the municipal complex redevelopment project and authorize the issuance of $4 million in bonds or notes by the township.”
Tuesday night, residents learned if the project is to be finished this year, another supplemental bond ordinance of more than $2 million needs to be approved -- or a portion of the project needs to be paused for an undetermined length of time.
Mayor Angie Devanney said the experts reviewed “where we’ve been and how we are here today and some of the tough decisions we have to make.” The biggest decisions are whether to introduce a bond ordinance at the next meeting of the council to finance Phase 2, which includes the demolition of existing buildings, paving the parking lots and driveways, and installing signage -- or pause Phase 2.
Once that decision is made, the council, with the advice of its experts, has to decide how much money will be needed to complete the entire project -- Phase 1, the municipal complex, and Phase 2.
Jessup said that figure is “a little north of $2 million.”
Devanney said, “To be in this position is untenable … Do we halt Phase 2 or go out for more money during a global pandemic, when we have no idea what the tax collection rate will be, what it is going to be in the third quarter.” She added her preference would be to have both phases done, but “I would be in support of halting Phase 2, putting it on pause, taking a break and seeing if we can get done at a later date.”
Domuracki said of Epic, “they are a capable firm, I don’t know why they haven’t cooperated” but, he doesn’t see any reason for them not to complete Phase 1, the municipal complex, in the next four months. “We suggest we take Phase 2 out” of the scope of the project. That will give the township some breathing room and get the building done.”
Domuracki said, “We were behind the entire project with bricks and mortar. We need to finish the bricks and the mortar and, once that is finished -- about three weeks away -- you can start on the interiors” and complete the building.
After significant delays on the project, at a principals meeting, Epic, the general contractor and redeveloper, said there were “a few open change orders that needed to be resolved for them to gear up for this final phase of the interiors of the construction,” Domuracki said. The next week, they settled all the change orders and Epic committed to bring in crews and move to finish the project, he said. Despite there being rain days that prevented the roof from being finished, Epic’s manpower on site “increased dramatically,” and there have been between 40 and 46 workers on site the past two days, he said.
Yet to be addressed is the matter of disposing of the unsuitable and/or contaminated soils stored on site but, “beyond that, there are no excuses for the contractor to not complete" the municipal building part of the project in the next few months, Domuracki said.
Edmonds then provided three slides to show the details of the Change Orders. In Slide A, above, Change Order Cost Summary #12, details of submitted vs. approved Proposed Change Orders. See an article on the information in the slides in a related article, here.
The mayor asked where this left the township, financially and Domuracki said, in addition to the $1,657,012 in approved change orders, the township needs funds to complete the entire project. There is still unsuitable/contaminated soil to be removed from the property and clean soil to be brought to the project to replace the unsuitable soils.
“The contractor is requesting a delay of somewhere between eight or nine months” Domuracki said, adding Mast believes Epic needs less time. Mast is waiting for a schedule update from Epic. At the recent meeting, Epic said they needed to clean up their change orders and resolve issues before they can give Mast an accurate completion schedule, said Domuracki.
Edmonds said, “The township has potential exposure for the remainder of the site work that has to be done.” In addition, Epic is looking for another eight or nine months of delay, which has increased administrative costs of the project. “All those elements together puts us over $2 million,” said Edmonds.
Jessup reiterated, “That includes Phase 2,” adding the $2 million number represents costs they know about today. “There will be additional carrying costs -- you have seven to eight months of project left, we say less. The difference between the two are liquidated damages.”
The actual municipal building proper (Phase 1) was supposed to be done before May 1, which was the date for the entire project, Phase 1 and Phase 2, Jessup said. They have sent Epic a letter advising them they did not seek a contract extension, so at the moment their deadline is still May 1. “Every day they miss is an unexcused delay. There will be some excused delays, of course, but the clock is running,” Jessup said.
Devanney said the projected finishing date for the project, Dec. 29, “is the worst time to be paving” and doing some of the other projects involved in Phase 2, and could result in even more delays. She repeated her belief that there are only two choices, “bond for more money or potentially halt Phase 2.”
Domuracki said, “$1,930,000 would cover us through project completion, exclusive of any claim negotiations that occur. We recommend you take credit against Phase 2, to avoid being in a winter program of completing Phase 2 and get him to finish the new building and stabilize the existing building for a few months, until we finish your new building.” Doing that would be a removal of scope from the contract, he said.
The mayor asked if the township put Phase 2 on pause, would be any money leftover in Phase 1?
Domuracki said that was “not realistic.”
Edmonds said the number can be reduced by getting hold of the list of materials Epic has already acquired and having the materials turned over to the township. If the council decides to pause Phase 2, Mast and Epic have to agree upon where the one project ends and the other begins.
Councilwoman Gentiana Brahimaj asked, “How do we hold them accountable … How did we get to this point?”
Edmonds said, “Eric (Chait) and I have been documenting the job. It veered off course late last spring, early summer, where the underground plumbing work was just not started. We had a history of knock down drag ‘em out fights about the contract at that time.” Steel was supposed to be going up in April 2019, but didn’t until September. They lost even more months, as manpower levels were inadequate. “I think the durations in the original baseline schedule were inaccurate,” he said. Work was performed out of sequence, not performed when the weather was suitable and Mast was told “winter conditions” in 2019 caused more slippage. More notable was the failure of Mast to do underground plumbing last year, which meant the slab could not go in, which backed up the project even more.
The firm in control of the project was Epic - which has care, custody and control. Mast is managing Epic, but it doesn’t control them.
Jessup said there have been “numerous incidents throughout the project,” and Mast, backed up by Jessup, held meetings, discussed potential remedies, wrote letters and “until the last handful of days, they have responded, but that has not produced results.” It is only in the last couple of days that there has been progress," he said. There still are issues to be resolved, though.
Councilwoman Jeanne Kingsley asked when the township would know “what our recovery for liquidated damages would be?”
Jessup said only when they are “actually done with the building.”
Councilman Manuel Couto verified that the township wouldn’t have “a cost breakdown analysis until we make a decision going forward?” Then asked if there was some way to use the “contingency dollars. Are we jumping too soon?”
Councilwoman Susan Poage tried to assure people, “the project will get done,” that Phase 2 would just be on pause.
Councilman Stephen Yellin said the council should rely on the experts’ judgement, reminding everyone they were unanimous in their recommendation to pause Phase 2. He said he was in “full agreement with the mayor” and doesn’t want to go to the taxpayers and say “We need additional funding to get this done.”
Couto said he didn’t want to go back to the residents, either, and “I am trying to find an alternative.” He said he was “trusting my experts but trying to find better analytics.”
Council President Alvaro Medeiros said the question “Can we finish this project with the money we have?” had been asked and answered, “Ted said, 'It can’t.'”
Devanney said it is obvious “We are going to have to go out for additional money at some point,” and that her point is there is a pandemic. She then asked, "What is the latest that we need to introduce an ordinance” to continue on?
Jessup said a bond ordinance requires two meetings, - one to introduce the ordinance, one for the public hearing, plus time to publish the ordinance, plus 20 days, so “the ability to provide those funds is always approximately 45 days away from the day you make that decision.” Phase I should be completed between Oct. 1 and 15, possibly sooner, but that is “a lot of time in the construction world” for the money that is left. If the decision of the council is to take out another bond, it would have to be introduced at “the next meeting, at the absolute latest,” Jessup said.
Kingsley said she wants to sit down with “Mast one more time and scrub through these contingency numbers” and look at the project to see what could be cut so Phase 2 can stay in the project.
Edmonds was blunt, “We are out of funding for this project now because the township has paid $1.3 million to remove unsuitable soils and must still pay $500,000 to import material to replace that.” That $1.8 million is what would be needed to complete Phase 2, he said.
Township Administrator Liza Viana said, “So the soil alone blew through that (original) contingency along with everything else?”
The mayor concluded the discussion by saying, “By the next council meeting we need either a change order on the agenda for scope reduction or we need a bond ordinance.”
The council's next meeting will be held on Thursday, May 26, at 7 p.m.