Price for municipal complex jumps $3M

Additional costs pinned on delay
in construction

BY ELAINE VAN DEVELDE

Staff Writer

There are a lot of clichés being bandied about between officials in Tinton Falls over $3 million extra in costs to construct the new municipal complex that no one counted on.

Councilman Peter Maclearie is shaking his head and wagging a shaming finger, saying, "I told you so," after finding out that the borough’s new municipal building will cost $3 million more than originally anticipated nearly three years ago.

Mayor Ann McNamara is saying, "Hindsight is always 20/20, and it’s fun to say ‘I told you so’" when you can’t turn back time and construction prices.

Still, the bottom line is that officials’ more-than-a-decade-old dream of a 37,000-square-foot municipal complex is going to cost a lot more than it would have about three years ago.

The Borough Council must now decide, McNamara said, which way it is going to go on with the project — either bonding for the difference and taxing residents the penny per $100 of assessed property value to foot the cost, or opting for a cheaper way out, while sacrificing the intent of the project to centralize services.

"I saw it coming to this, and I said, ‘I told you so’ last year when I questioned the budget in a letter to council and, with it, the cost of waiting to build the complex," Maclearie said. "Now, here it is about a year later, and it turns out that waiting cost us a lot. Construction costs escalate every year. Also, we were paying interest on the bonds the whole time [even though the interest was low]. And now, in the past four months, the price of steel has skyrocketed."

Maclearie said he estimated that taxpayers have already footed at least a $400,000 bill in interest alone on the stagnant bonds for the work. He said he checked the figure with Chief Financial Officer Stephen Pfeffer, who agreed that the rough estimate was accurate.

McNamara said the bonds, sitting in a holding pattern, carrying a roughly 4 percent interest rate, are not a lesson in wasteful spending because "the rate stays the same, whether the money is spent yet or not."

If anything, the mayor contended, the borough saved by bonding earlier because rates have escalated to a point where a new, higher interest rate alone would cost more than the wait.

Maclearie could not have disagreed more with the mayor’s calculated savings, but conceded that looking back was pointless, except to repeat "I told you so" and hold onto the lesson learned that waiting on construction can only get more costly every day.

In the end, "we’re at a point where if we want to follow through with the original purpose of the building [to have a large complex containing all offices], we have to spend $3 million more — it’s that simple," Maclearie said. "There’s just no easy way out of this one. But I am still not clear on why we let the time pass and sat on the main portion of the project for this long."

Not satisfied with the response from other officials, Maclearie recalled the original timeline tagged to the work.

The plans were approved for construction of an $8.8 million complex, including a prefabricated public works building, in October 2001.

Now, nearly three years later, the $2 million public works building has been up since last summer and there is no main complex sitting on the "great lawn" in the front of the present main town hall. That part, or phase two, of the project was slated to cost about $6.8 million when it was first conceived by council and its architects Kaplan, Gaunt and DeSantis, Red Bank.

The borough bonded for the cost in 2001 to take advantage of low interest rates. The timeline for both phases of the project — construction of the public works building and the main complex — was expected to span a maximum of 18 months. Public works’ new quarters were completed by the end of summer 2003. The main building was supposed to go out to bid and never did.

Not too long ago, Borough Administrator Anthony Muscillo said that ground would be broken on the main complex in the spring. It was not. Muscillo was unavailable for comment.

Now, the architects have come to the council with revised cost estimates and the design of a smaller, 25,000-square-foot complex. That smaller complex would have less space and would force offices to be split between the present older building and a new one. Or, McNamara said, the borough has a choice of having an unfinished basement.

"Council is examining the options carefully — it’s a very difficult choice that they did not think they would be faced with. But it seems that they have really decided that going any other way at this point, besides just having the original plan constructed, seems to defeat the purpose," she said. "There is shock over the increase in cost, but what can you do? It’s just inflation. The cost of steel, alone, has risen by about 30 percent."

However, Maclearie says there are other wasted expenses that have accompanied the wait and have not been exposed.

"It was my understanding that someone was hired to oversee and streamline the project to ensure that it was done in a timely fashion," Maclearie said. "This was supposed to double the assurance that the work would be done well and efficiently. Where is this person who was supposed to be watching in addition to the usual crew? What happened to that? The work was supposed to be done within 18 months — from October 2001 — and here it is nearly three years and $3 million later."

The actual cost to taxpayers, should the council opt to stick with the now $11.8 million plan, would be an average of about $27 a year, Maclearie said. "It isn’t much at all, and I want to stress that I am in agreement that we really do need the building. It’s just that the idea that we have to ask for any more from people is disturbing," he said, "especially when we were counting on having a year with no tax increase, after a hike in taxes last year, which was attributed mainly to the new municipal building."