By MIKE ANTHONY

Executive Editor

The McCarthy Construction Co., construction manager for the Mehlville School District’s Proposition P districtwide building improvement program, could be paid an additional $3.3 million besides its more than $2.8 million fee.

That’s according to a proposed revised Proposition P budget presented to the Board of Education last week by Randy Charles, assistant superintendent for finance and the district’s chief financial officer.

Under the proposed revised Proposition P budget, nearly $13.7 million in additional expenditures are planned on Proposition P-related projects through mid-2008, bringing the total cost of the districtwide building improvement program to more than $86 million.

The board will consider the revision of the Proposition P budget when it meets Monday, July 21.

District voters approved Proposition P, a nearly $68.4 million districtwide building improvement program funded by a 49-cent tax-rate increase, in November 2000.

Shortly afterward, the Board of Education selected the McCarthy Construction Co. to serve as construction manager for Proposition P and authorized the administration to negotiate a contract with the company.

In October 2001, the Board of Education voted to approve a $72.4 million budget for Proposition P. Interest on the bond-like certificates of participation issued to fund Proposition P allowed the construction budget to increase to $72.4 million, which included a nearly $3.5 million master contingency.

To date, about 83 percent of the work on Proposition P has been contracted, Charles told the board, while about 67 percent of the work has been completed. To date, contingency funds totaling $2,157,659 remain available. That includes master contingency funds, technology contingency funds, remaining site contingency funds and contingency funds from future projects.

Among the expenditures to date from the master contingency are $545,626 for sprinklers at Mehlville Senior High, $158,000 for sprinklers at Oakville Senior High and $198,690 for sprinklers at Washington Middle School.

Current estimates indicate the 49-cent tax-rate increase will generate $170,165,506 through 2022, while the amount needed to retire the certificates of participation is projected at $144,346,224 — leaving a surplus of $25,819,282 in district capital funds. The estimated surplus does not include any interest that may be earned.

Under the proposed revised Proposition P budget, the total cost of the districtwide building improvement program and related projects would be $86,090,548 through June 30, 2008. That includes the board-approved budget of $72.4 million, plus another $13,690,548 in district capital funds. To date, a total of $4,898,567 of district capital funds has been spent on Proposition P-related projects.

The use of district capital funds can be classified into three categories, according to information Charles presented to the board June 23:

• “Code requirements made it necessary to perform additional work as a prerequisite to planned construction.”

• “Hidden conditions, uncovered when existing facilities were demolished for renovation, led to additional costs.”

• “The original budget was insufficient to fund some projects to the level of quality recommended and/or expected by the community, the staff and the Oversight Committee.”

Under the board-approved original Proposition P budget, McCarthy’s fee for serving as construction manager was $2,835,000. Current projections indicate the final cost will be $2,826,337 — $8,663 less than budgeted.

However, in the cost of Prop P-related projects presented to the board, McCarthy is projected to be paid an additional $3,321,212 for “general conditions.” To date, the company has been paid $2,534,331.

“In addition to fees being paid to McCarthy, general conditions include expenses incurred by McCarthy and the salaries of McCarthy personnel. This was approved by the Board of Education when McCarthy was hired as the construction manager. District administration decided to pay general conditions from capital funds so Prop P funds could be used to pay for the sprinkler systems,” according to information Charles provided to the board.

Among other Prop P-related projects included in the revised budget proposal and Charles’ explanations are:

• Roofing projects — Of the projected cost of $4,064,635, $16,550 has been spent to date. The original Proposition P budget included $2,686,083 for roofing.

“Original estimates for roofing repairs drastically underestimated the scope of work that would be required to repair failing roof systems across the district. This was discovered after Prop P passed and a consultant was hired to inspect the roofs and develop plans and priorities to address roof repair needs. The roofs must be repaired to avoid structural damage to the buildings.”

• Furniture, fixtures and equipment — Of the projected cost of $2,154,704, $217,214 has been spent to date.

“Original Prop P construction estimates included the cost of construction, but did not include the cost of desks, chairs, equipment, etc. The district will need to furnish a new middle school, a new elementary school and a new early childhood education center. The district will also need to furnish additions at both high schools and all three existing middle schools.”

• Bierbaum asbestos removal — The cost of this project was $889,442.

“Asbestos reports provided several years ago by a company that no longer exists indicated little or no ACM (as-bestos-containing material) at Bierbaum. During design, this was discovered to be incorrect. The ACM had to be removed before Prop P work could be completed. Prop P work was delayed one year to allow a summer for ACM re-moval.”

• Oakville Elementary — Of the projected cost of $700,000, nothing has been spent to date.

“Cost to complete Prop P-identified work at Oakville Elementary exceeded estimates. Roofing work was delayed to make capital funds available.”

• Charter wide area network — Of the projected cost of $634,379, $55,359 has been spent to date.

“The wide area network — WAN — was bid as a request for proposals. The best and least expensive option for the school district was a lease agreement with Charter Communications. Lease payments cannot be made with proceeds from the issuance of the certifications of participation, but can be made directly from revenue received from the 49-cent levy. The WAN lease payments will be paid from capital funds — offset by e-rate rebates — making more money available for Prop P projects and Prop P-related projects.”