Council to consider $11.1 million in construction contracts for Preschool, Senior Center

 

The Oak Ridge City Council in a special meeting on Thursday will consider $11.1 million in construction contracts for the new Oak Ridge Preschool, Oak Ridge Senior Center, and Scarboro Park improvements.

The contracts could both be awarded to Jenkins and Stiles LLC of Knoxville.

There were four bidders for the Senior Center project and three for the Preschool and Scarboro Park improvements, according to Jacene Phillips, senior project manager for Studio Four Design. Her company recommended both contracts be awarded to Jenkins and Stiles because of cost, but also because the Senior Center could be operating two months earlier under that contract than under any other bid and the Preschool would be complete three days before it would be under the other bids, Phillips said.

Both projects would be funded through general obligation bonds, a type of debt that could be issued in November.

The first contract that could be awarded Thursday is for the construction of the Preschool and improvements to Scarboro Park. The contract would be worth up to about $8.4 million. The Preschool would be built at Scarboro Park.

Jenkins and Stiles submitted the winning bid, both in cost and time, Oak Ridge City Manager Mark Watson told City Council members in an October 10 memo. The bid price includes two alternates that had been considered options for the Preschool: a covered canopy, and heating and cooling energy control systems.

The bid also includes park renovations and reconstruction to recreational facilities adjacent to the Preschool at Scarboro Park. The facilities would include a new youth baseball facility, basketball courts, tennis court, and picnic shelter, Watson said.

He said the bids were reviewed by members of the Oak Ridge Board of Education and former Council member Willie Golden and city staff.

“All concurred with the award,” Watson said.

The bids were opened on Thursday, October 4. Watson and Studio Four Design—which is providing architectural, interior design, and consulting engineering services for the Preschool and Senior Center projects—recommended that the Jenkins and Stiles bid be accepted, according to the resolution to be considered by City Council on Thursday, October 11.

The second contract is for the construction of the Oak Ridge Senior Center. The contract could be worth up to roughly $2.68 million. The Senior Center would be built just west of the Oak Ridge Civic Center in Alvin K. Bissell Park.

The bid was reviewed by city staff and members of the Oak Ridge Senior Advisory Board, and all concurred with recommending that the contract be awarded to Jenkins and Stiles, Watson said in a second October 10 memo.

The apparent low bid on the Senior Center project was from Hartson Construction LLC of Knoxville, according to a second resolution to be considered by Council on Thursday. That company had a bid of about $2.66 million.

The Jenkins and Stiles bid for the Senior Center construction project was roughly $2.71 million.

But Jenkins and Stiles also submitted a construction timeline that was two months shorter than Hartson’s, the resolution said. That two-month difference is significant and outweighs the roughly $44,000 difference in bid prices, the resolution said. Watson and Studio Four Design recommended Jenkins and Stiles for the project, citing the earlier completion date.

Jenkins and Stiles has offered a $25,000 discount if awarded both the Senior Center and Preschool projects in a combination bid.

 

Finance information

The projects, which have both been discussed for many years, will depend upon bonds being issued to retire the debt.

“The city is finalizing all costs associated with the issuance of nearly $14 million in bonded indebtedness, which with a maximum 30-year-note will extend to 2048,” Watson said. “Shorter options are also available to consider and will save interest being expended for financing.”

The costs of the city’s indebtedness have been reduced through low interest rates, but interest rates have increased, Watson said.

“However, interest rates are significantly low and should be considered for capital facilities,” Watson said.

Most of the city’s debt is education-related, the city manager said.

“City general fund debt is rapidly being paid off, but future needs are out there to be considered such as the need for roofing repairs,” Watson said. “As we look at the new Pre-K school and a Senior Center, it is recommended that debt be issued. Anticipated tax rate offset will be approximately 10 cents, with a two-cent increase occurring this past July.”

Watson said much of the city’s flexibility to absorb tax hikes has been affected by state exemptions, elimination of taxes, reductions of taxes, and the “no tax hike” promise of the Oak Ridge High School debt. More than $7 million in debt is being retired each year, Watson said.

Chris Bessler of Cumberland Securities, bond adviser to the City of Oak Ridge, will be at the special meeting on Thursday afternoon. The meeting is in the Oak Ridge Municipal Building Courtroom at 200 South Tulane Avenue. You can see the agenda here.

Background

Preschool

The Oak Ridge City Council and Oak Ridge Board of Education created a joint committee known as the Joint City/Schools Preschool Planning Committee to develop a replacement plan for the current Preschool building, which is about seven decades old and located on New York Avenue.

After many discussions, meetings, and work sessions, the BOE in February 2017 recommended locating the Preschool at Scarboro Park. The City Council supported that recommendation the next month, in March 2017.

Council authorized an agreement with Studio Four Design in October 2017 and authorized the company to proceed with the final design of the construction drawings in May 2018.

Senior Center

The Oak Ridge City Council passed a resolution in 2010 supporting the development of a new state-of-the-art Senior Center for Oak Ridge residents, Watson said.

“After location in the Daniel Arthur Rehabilitation Center for many years and in a cooperative agreement with Anderson County, the Senior Center moved to temporary quarters in the Oak Ridge Civic Center in anticipation of this project,” Watson said. “The Senior Advisory Board was integrally involved with the design and layout of the Center with Studio Four Design.”

Under the Jenkins and Stiles proposal, the new Senior Center could be open by October 1, 2019, with other bidders completing the project by December 2, 2019.

“A strong show of support was made for the consideration of the earlier time completion of the Senior Center,” Watson said.

The two projects came in at a lower cost than allowed for under an initial bond resolution approved by City Council in September—about $2.9 million less total. The initial resolution had an estimated cost of up to about $12.5 million for the Preschool and Scarboro Park, and the current amount after bidding is $9.9 million, about $2.6 million less. The initial resolution for the Senior Center had an estimated cost of up to about $3.5 million, and the current amount after bidding is $3.2 million, roughly $300,000 less.

The contracts to be considered Thursday would authorize the city manager to sign change orders of up to 5 percent over the contract price for unanticipated project requirements. That’s equivalent to about $420,000 for the Preschool and Scarboro Park, and roughly $134,000 for the Senior Center.

More information will be added as it becomes available.

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