An additional $1.35 million is needed to finish up the Washtenaw County jail expansion and new 14A-1 District Court facility – beyond its original budget of $34.6 million and $1.75 million contingency. The news was delivered by county administrator Verna McDaniel at a May 20 working session of the Washtenaw County board of commissioners.
Unexpected costs, construction delays and lower-than-expected interest earnings contributed to the shortfall, she said. An official request for additional funding will be made at the board’s June 2 meeting.
McDaniel divided the request into two categories: 1) $495,958 for additional costs related to the original project proposal, and 2) $861,000 in costs that are considered to be outside the scope of the originally approved project.
These expenses are in addition to the staffing request made earlier this year by sheriff Jerry Clayton, and approved by the board. The expanded jail eventually will require 39 more full-time workers, bringing the total corrections division staff to 103 employees. The additional staff will increase the corrections budget by $1.478 million this year and $3.248 million in 2011, and create a projected budget shortfall in 2012 and 2013.
Commissioners were informed that additional items not covered in these requests will be addressed during the planning process for the 2012 and 2013 budget cycle. No dollar amounts were provided for those anticipated expenses.
Washtenaw County Jail Expansion: A Brief History
In February 2005, voters in Washtenaw County were asked to endorse a 20-year millage proposal to raise $314 million to build a new jail and courts facility, as well as funds for operations. The proposal was championed by the county administrator at the time, Bob Guenzel, and put on the ballot by the county board of commissioners.
When it was overwhelmingly defeated at the polls, the county administration and board regrouped. In August 2005, commissioners authorized Guenzel to proceed with building a scaled-back expansion to the county jail and a new facility for the 14A-1 District Court, now located in a small building next to the jail, and authorized issuing a $30 million bond for the project.
A citizens group objected to the $30 million bond, saying it was too similar to the ballot initiative defeated earlier that year. The group – called the Save Our Sheriff (SOS) Committee – collected more than 17,000 signatures aimed at forcing a countywide referendum on the issue. The protest came in the context of disputes between the county administration and the sheriff at the time, Dan Minzey, over funding for operations as well as the cost of sheriff deputy patrols in the townships. In early 2006, commissioners dropped plans to issue that bond.
But in November 2006, the county board was ready to move ahead again, approving a $21.6 million bond issuance for the expansion. This time, no organized efforts were made against the proposal, and the bonds were sold in early 2007. Just over a year later, in March 2008, the board authorized another $12.6 million bond for the new 14A-1 District Court.
The projects are overseen by the county’s public safety and justice oversight committee, a group formed back in August 2005. Members of the committee include the county administrator, sheriff, chief judges of the 14th District Court and 22nd Circuit Court, and two county commissioners (currently board chair Rolland Sizemore Jr. and Ken Schwartz). The committee meets monthly and have authority to review and approve contracts, bills and other matters related to these capital projects.
According to a timeline provided to commissioners, inmates started occupying the new portion of the jail last month, and renovation is now underway in the older jail facility, to be completed by September. [The state Department of Corrections has rated the expanded jail at 444 beds. Of those, 112 beds are in the new facility. The total number won't be available until the existing jail units are renovated.] The sheriff’s offices are moving into the new facility this week. The new jail lobby will open in June, and the new court building will open in July.
In her presentation on May 20, county administrator Verna McDaniel said the committee had reviewed and approved making the current request for extra funding.
Jail, Court Additional Costs: Presentation
McDaniel said told commissioners that the original contingency for the $34.6 million project had been $1.753 million, or 5% of the total budget. Actual contingency expenses, however, totaled $3.23 million.
Those expenses included:
- $506,255 in higher-than-expected bids for the project.
- $547,190 in “soft costs” – snow removal, topographic surveys, blueprints and other items. Commissioners were provided with a five-page itemized listing of these expenses.
- $159,306 in adjustments requested by sheriff Jerry Clayton.
- $77,793 in adjustments requested by district court officials.
- $228,057 to Clark Construction Services, the project’s contractor, for extending the original project end date from May to September 2010.
- $1.712 million in construction change orders – $1.138 million for the jail, and $573,725 for the court. A packet distributed to commissioners included about 50 pages of itemized change orders.
The $3.23 million in expenses was offset by $1.52 million in cuts, McDaniel said. They include:
- $420,639 in cuts from adjusting the budget early on in the project. The bulk of that amount – $300,000 – came from eliminating some work on the new jail building entrance.
- $999,844 in savings from “value engineering” the project. Of that, a reduction of $600,000 from the budget came from pushing back the roof replacement on the existing jail. That work will be deferred until 2014. Some of the other cuts come from eliminating a snowmelt system ($33,943), reducing the size of insulated metal paneling ($46,000), reducing the cost of fencing in the intake/receiving area ($49,286) and making product substitutions at lower cost ($55,714).
- $100,000 in reduced costs for furniture, fixtures and equipment.
The $1.52 million in cuts – plus the original $1.753 million contingency – totaled $3.273 million, which covered the $3.23 million in total contingency expenses, McDaniel said, leaving a remaining contingency of $42,700.
However, the project will require another estimated $190,000 in contingency costs, McDaniel said. There’s also an anticipated shortfall in projected interest earnings of $218,855, and an $87,103 adjustment needed to reconcile records related to the two bonds (adjusting the budget to reflect the actual bond proceeds, not the projected amount). That brings the total needed to finish the project in its original scope to $495,958 – or 1.43% over the original budgeted amount.
McDaniel said she was requesting that the nearly half-million dollars be paid for out of the Facilities Operations & Maintenance fund, which has a balance of $781,796. Money had been set aside in the fund from operating surpluses in 2008 and 2009, stemming from staff cuts, lower energy costs and a shift to preventative maintenance.
Jail, Court Additional Costs: Commissioner Questions
Barbara Bergman said she’ll support the request, but added that she was very concerned. She noted that a fence had been built around a parking area, even though the majority of the board had indicated they did not want to build it. She wanted to know much had that cost. She also wondered if they planned to limit access to the parking within the fenced-in area – if so, they’d lose parking places for the general public, she noted.
Kristin Judge asked whether it was normal to have so many change orders on a project this size. Dave Shirley, the county’s operations and maintenance manager, told her that it was normal. Judge also wanted to know what the Facilities Operations & Maintenance fund would have been used for otherwise, if they didn’t have this shortfall. McDaniel said there was no other intended use for the fund.
Mark Ouimet recalled that when the construction work had “come out of the ground” – when the foundation and other underground work had been completed – he’d been told by staff that the project was either on budget or possibly under budget. He said he had questioned that at the time. He asked how McDaniel and her staff planned to manage the project going forward. It wasn’t a huge concern that they were 1.43% over budget, he said, but it was disconcerting to find out they were so far off from what they’d been told.
McDaniel replied that they would carefully monitor the situation. They’re at the punch-list portion of the project, she said, and they didn’t foresee any additional large expenses.
Ken Schwartz said he wanted to address these issues because he serves on the public safety and justice oversight committee, which oversees the project. There had been several unanticipated expenses, he said. When they started digging beneath the former parking lot, for example, they discovered water and sewer utilities that they didn’t know had been located there, as well as a vault from an old cemetery. That caused some delay, he said. They also ended up paying an unanticipated $100,000 watershed fee to the city of Ann Arbor, to allow the facilities to discharge water into the drainage system.
He noted that a new sheriff, Jerry Clayton, was elected in November 2008, after the project was underway. Clayton has an operational philosophy that in the long run will save the county money, Schwartz said, but it required some slight design changes. [Clayton outlined that philosophy and its implications on operations at a March 18, 2010 working session: "Sheriff Requests More Staff for Expanded Jail"]
Additional changes were demanded by the defense bar and judicial coordinating council, Schwartz said. And interest rates fell precipitously, he said – that’s something they’ve seen in other areas too, like the county’s retirement investments. Overall, he thought the staff had done a good job in managing the project.
Schwartz also addressed the fence issue that Bergman had raised. The lot was at an exit point for inmates, and the staff felt that additional security was needed. He described the fence as modest.
Bergman replied that the size wasn’t an issue – it should have come back to the board for approval. Part of the discussion is that some people are protected, she said, while others aren’t. As a public official, being exposed came with the territory, Bergman said, noting that her own home phone number is listed in the phone book. She said she planned to make a fuss over locking the fenced-in area.
Schwartz said the access to that area can be worked out, but noted that it was reasonable and modest protection, determined as necessary by professional staff.
Jail, Court Out-of-Scope Costs: Presentation
McDaniel also outlined an additional $861,000 request for items that are deemed necessary, but that fall outside the approved scope of the project:
- $165,000 to demolish the existing 14A-1 District Court building.
- $600,000 to reconfigure the Washtenaw Avenue entrance into the corrections campus. The entrance is shared with St. Luke Lutheran Church – the plan is to create a split in the drive for better traffic flow.
- $80,000 for a smoke extraction system in the jail.
- $16,000 for door handles in the jail’s intake area, in case workers need manual entrance or exit.
The demolition costs would be paid for out of the Facilities Operations & Maintenance fund. The Washtenaw entrance would be covered by funds from the 1/8th mill fund, which is used for maintenance projects and has a balance of $1.59 million. The smoke extraction system and door handles would be funded from the county’s risk management fund, which has a balance of $1.57 million.
There will be additional out-of-scope items that remain to be funded, according to a memo provided to commissioners. Those include soundproofing the existing jail cells, increasing the number of cameras in the existing jail, parking for the detective bureau, vehicle storage and an impound lot. It’s recommended that the funding for these items be addressed during the planning process for the 2012-2013 budget.
Jail, Court Out-of-Scope Costs: Commissioner Questions
Kristin Judge asked how confident they were in the estimates. McDaniel said the staff was being conservative, so that they wouldn’t have to return to commissioners for additional funding. Judge asked when the estimates had been made. Dave Shirley, the county’s operations and maintenance manager, said the demolition estimate had been made within the past 30 months, but the estimate for the Washtenaw Avenue entrance was from 2009. Judge requested that an updated estimate be obtained.
Judge also said she had concerns about security at the 14A-2 District Court in downtown Ypsilanti. Was that a question to address as part of this discussion? she asked. McDaniel said she’d prefer to handle that separately, at a later date.
Rolland Sizemore Jr. reported that he’d been working with Shirley to lower the cost of the demolition. He also said he planned to work with Kirk Tabbey, chief judge of the 14A District Court, and court administrator Gene DeRossett about the security issues that Judge had raised. [Both Tabbey and DeRossett attended Thursday's working session, but did not make a presentation to the board.]
Sizemore then asked Shirley why they needed to keep Clark Construction on until September – wasn’t the project almost done? Shirley replied that the project is about 90% complete, but there’s still a lot of work to be done. There’s also renovation that needs to occur in the older jail, he said.
Wes Prater expressed dismay at the number of change orders and add-ons, saying he’d never seen anything like it. He contended that some of the items should have been covered by the original bid, and said he planned to look through the list in more detail and ask questions. He hoped the county was holding back payments.
Prater later asked about the approval process for change orders. He was told that they are all reviewed and approved by the public safety and justice oversight committee.
Shirley told commissioners that 86% of the project has been paid for so far.
Other Working Session Topics
Two other presentations were made during the May 20 working session: 1) A report by officials of the Southeast Michigan Council of Governments (SEMCOG) on infrastructure issues for the region, and 2) a briefing by staff of the county’s economic development and energy office, regarding tracking of the county’s energy usage and a potential energy-related pilot project. The Chronicle may address these presentations in a separate report.
Commissioners present: Barbara Bergman, Leah Gunn, Jeff Irwin, Kristin Judge, Mark Ouimet, Ronnie Peterson, Jessica Ping, Wes Prater, Ken Schwartz, Rolland Sizemore Jr.
Absent: Conan Smith