The Common Council met 06/21/2023. They took up two items related to the library project.
The first was a request to approve an increase of $1.4 million in fees to the architect Skidmore, Owings, and Merrill (SOM). These fees were, in part, based on the $35.2 million estimated cost of construction as well as on the additional work SOM performed redesigning the library to get it [somewhat] within budget. After some questions regarding why the increase in fees had not been brought before the Finance Committee at the time they were first agreed upon with SOM, the Council voted 15-0 to approve the request.
The second item was the request to approve the bid package for the library at a cost that was $4 million over budget. The item was amended to remove the polished concrete bid because there had been an issue with the specs the city had provided for that aspect of the project. That specific bid package was going to be rebid, and it was expected the city could end up saving around $75,000 on it.
Alderpersons Sheri Hartzheim (District 13) and Chad Doran (District 15) expressed concerns about where the $4 million above what was budgeted would come from. While they recognized that the Friends of the Appleton Public Library had raised $8 million so far and were likely to raise more, they wanted to clarify where the money would come from if the Friends were unsuccessful in raising the full $12 million, they had committed to. Alderperson Doran tried to have the Council go to a Committee of the Whole and come up with a contingency plan if the Friends fundraising fell short. He was unsuccessful in that attempt, and the Council ended up voting 13-2 to approve the bid packages even though they were $4 million over budget and there was no plan if the Friends was not able to raise that money. Alderpersons Hartzheim and Doran were the 2 dissenting votes.
I’ve prepared a transcript of the discussion for your downloading pleasure.
This recap suffers from the lack of a recording of the discussion that took place at the Finance Committee on 06/19/2023. The Post Crescent did publish an article about that meeting; however, the video of that meeting is not available, so I can’t provide a transcript of the discussion. Since the discussion at Council was, in some respects, a continuation of the discussion at the committee meeting, we are lacking some context.
It sounded like the increase in fees for SOM had already been discussed quite a bit at the committee meeting. Based on the memo submitted to the Finance Committee, it looks like the original architectural fees were based on an estimated construction cost of $24.4 million. When the estimated construction cost jumped up to $35.2, the architectural fees increased by $973,800. Beyond that, because SOM had performed additional work redesigning the library plans after the original bids came in over budget, they were requesting additional fees of $381,018 plus $25,000 in reimbursables for a total of $406,018.
During the Council meeting, Alderperson Hartzheim wanted to confirm that the city was obligated to pay that $400,000 in increased fees. City Attorney Christopher Behrens confirmed that typically when a “contractor does additional unanticipated work under your direction, you are obligated for additional costs associated with that work.”
Director of Parks, Recreation, and Facilities Dean Gazza said that SOM had made him aware that additional charges would be incurred due to the work redesigning the library. SOM had actually been willing to eat a significant portion of those fees, but they could not eat the fees they had to pay down to subcontractors.
Director Gazza said, “And then I agreed to that number. I was quite pleased. And I thought that was quite fair, but contractually if you go to our AIA contracts, anytime you have a scope change–not a scope reduction–we would be on the hook to pay that.”
Alderperson Hartzheim was concerned that the increased fees had not been brought to the Finance Committee particularly given that she had specifically talked with Mayor Woodford about what the changes to the library were going to cost the city and Mayor Woodford had told her that the cost of the architect would be a percentage of the build price. “And I see that in the $973,800 addition, and I don’t have an issue with that. But I do take issue then with then where does this extra come from?”
Alderperson Doran asked why the increased cost has not been brought to the Finance Committee for approval. Director Gazza answered that he took full responsibility for that having not happened and then explained that the process had been somewhat muddy. They had first started working on cost reductions and value engineering and then were getting new estimates, some of which required subcontractors, and at some point, they realized they had moved into redesigning the library, but the moment at which they had moved from value engineering into redesigning the library had not been clear.
Mayor Woodford also stated, “Director Gazza worked with Skidmore, Owings and Merrill and renegotiated this pricing with my full support. And I joined Director Gazza in his statement about learning lessons as we work our way through projects and processes. But again, our—just to offer for your information, as we were working our way through this process of trying to reduce a project budget that was overrun by $14 million, our focus was on reducing the total costs of the project. But I just I just want to note for the record that Director Gazza did so with my full support and knowledge.”
Alderperson Nate Wolff (District 12) offered the perspective, “This may have cost us you know, $400,000 more this way, but in the long run, we saved millions of dollars with your work and your recommendations and your leadership.”
The Council ended up voting 15-0 to approve the $1.4 million increase in fees.
The Council also took up the request to approve the bid packages for the Library Project which essentially were all of the contracts for various parts of construction.
Two members of the public, both representatives of Friends of the Appleton Public Library, spoke in favor of approving the bid packages and moving forward with the project. Don Hietpas, the current President of the Friends, specifically addressed the concern that the Friends had, thus far, raised on $8 million of their $12 million goal for private funding. He assured the Council, “We will work incredibly hard and will meet that goal.” He noted that none of the pledgers had backed out when the initial bids were rejected last year. “In fact, there was even greater support given the fiscal responsibility that was shown by the city. As we contacted committed contributors, the reaction was that it was the right thing to do, ‘and by the way, we are still all in.’” He also said that capital campaigns are hard work. “Frankly, we’ve only been able to meet with a relatively small number of identified potential contributors. Their response has resulted in the current pledges. We have many more remaining. Even more exciting is that we know there are an innumerable number of people and companies that we have not identified but will be anxious to participate.”
He concluded by saying, “To repeat, we are confident that we will meet our goal. We have been at this a very long time. Let’s get on with the task at hand, approve the bid packages, and give us a concrete project to work with. Together we can build the library that the community wants and desperately needs.”
The discussion on the bid packages started out with Alderperson Brad Firkus making a motion to amend the item to deny bid package 03B for the polished concrete. The city had been unclear in its paperwork about some specifications, so one company had included a coating in their bid, and one had not. The city talked with the parties, and both said they were willing to rebid the project, this time without the coating. It was also possible that other companies might end up bidding also. Director Gazza thought it might end up saving the city around $75,000. The motion was approved by a vote of 15-0.
In terms of the overall bid packages, most of the Council was excited to be at this point and able to approve the bids and move forward with the project. Some expressed gratitude for the work the Friends of Appleton Public Library was doing and believed that the Friends would be successful in raising the final $4 million in their fundraising campaign.
Alderpersons Hartzheim and Doran were both concerned about what would happen if the final $4 million were not raised. Alderperson Hartzheim said, “I wanted to make it clear that I don’t oppose the library and that I’m thrilled that we’re at this point, but I still have deep, deep concerns financially in regards to the unsecured portion of this particular project.”
Alderperson Doran said, “I’m disappointed that the staff didn’t provide us with some sort of contingency to cover that shortfall. I know it might not be 4 million. But as of today, it’s 4 million. And I think if we’re going to vote on this, we should have a contingency plan that spells out how we’re going to find that 4 million, whether that’s some combination of spending, if it’s cuts to the to the building to reduce the costs more. I don’t know what those would be. But I think it behooves us to tell our constituents that we’ve turned over every stone we can to ensure that we’re protecting their interests in this. And hoping and trusting that $4 million will appear down the road sounds great. But we have no guarantee of that.”
He wanted the Council to enter a Committee of the Whole so that they could create a contingency plan to find $4 million should the Friends fundraising fall short. That motion failed.
Alderperson Wolff was confident the Friends would meet their $12 million because they had already reached 2/3rds of the goal while still in the quiet fundraising phase and were not yet in the public phase of the campaign. [Note: when the campaign feasibility study was presented, it was stated that they would ideally raise 80% of the goal during the quiet fundraising phase ($9.6 million) before moving to the public phase.]
Alderperson Kristin Alfheim (District 11) had faith the community would come through. “I truly believe that this community has a massive need and want to complete this project. It will be in every newspaper, it will be on TV, everybody can start writing their checks now. It is time to build the library. Let’s move on. Let’s pass this today and let the community take over.”
Alderperson William Siebers (District 1) said, “There’s going to be questions, I’m sure down the road. And we’ll have to deal with them. And there’s going to be risks. There are risks. And we’re going to need to deal with them. Not everything is cut and dried tonight, but we got to have some faith. So, I’m going to vote in favor of this tonight.”
Alderperson Vaya Jones (District 10) had great confidence in the community’s response. “I do not doubt that the 4 million will come. And I’m actually kind of excited that my fellow alders have put that question out there about the 4 million because I truly think that this community is going to be like ‘Oh, 4 million? Let’s give you 8.’ I really think that they’re gonna see that call to action.”
Alderperson Hartzheim reiterated the concerns about a lack of a contingency plan. “While the library is what’s best for the city of Appleton putting a little bit of risk out there for our taxpayers to me does not feel like what’s best for Appleton. I would be willing to do this if we had that contingency plan. So that’s where I am today, and I don’t—I want, again, to say I do believe, I do have faith, but ‘trust but verify’ still comes into my into my brain.”
The Council went on to approve the bid packages by a 13-2 vote with Alderpersons Hartzheim and Doran casting the 2 nay votes.
Mayor Woodford finished up by saying, “I just want to take a moment and thank the Council for your consideration. And I want to thank the Councils that have come before, who’ve laid the groundwork over many years. I want to thank the advocates for this library who have worked diligently for many, many years on this project, who have stuck with this project and stuck with this community through thick and thin over a decade and a half to get to this project.
“And as we did when we set out in this project we set out with principles for the project, and we’ve held to those at every step. And we will continue to hold to those principles as we now take up the work of building this library. And you have our continued commitment to steward the resources of this community wisely and to do our best work as we have, to serve this community well, to give this community the library that we can be proud of and that will serve our children for generations to come. So, I thank the Council for your vote of approval, and we will get to work. Thank you.”
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