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Local News

Upside of a Down Economy? Cheaper Construction for Schools, Roads

Public agencies reaping some benefits as contractors vie to underbid themselves.

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As construction companies scramble to find work for idle employees, they’re turning more of their attention to schools, which, historically, aren’t as lucrative as private-sector projects. (Santa Barbara School District photo)

In a silver lining to the slumping economy, many schools and other public agencies are getting more bang for their taxpayer buck on construction projects.

From Santa Barbara to Santa Maria, the housing slump has meant less work for the contractors who used to be too busy to make bids for school and other public-works projects, which generally tend to be less lucrative.

Now, the bids for public projects are flooding in.

As a result, in Goleta, a new theater and multipurpose room at Brandon Elementary that was beginning to seem doomed will hold its groundbreaking ceremony on Monday. 

In Santa Barbara, a long-planned upgrade at La Cuesta Continuation High, located on the Santa Barbara High campus, may include a number of improvements that last year might have been considered frills: a paint job, better door handles, new windows or bathroom tile work. And at Washington School on the Mesa, a high number of bidders drove down the cost of a project to demolish and replace old portable classrooms.

Schools aren’t the only public works projects affected.

Also benefiting is a major improvement project on Highway 101, which is set to begin in July adding, among other things, a southbound lane between the Milpas Street and Hot Springs Road exits.

On that project, the lowest of seven bids for the first phase came in around $46.2 million, undercutting expectations by nearly 2 percent, and leading to a savings of nearly $1 million.

“With seven bids received, there was a high level of contractor competition for the first phase of widening Highway 101 south of Santa Barbara,” said Jim Kemp, executive director of the Santa Barbara County Association of Governments. “We are pleased to begin construction under budget estimates.”

At the Santa Barbara School District, the upgrade at La Cuesta is among the last of a lengthy list of now-finished projects resulting from the passage of a construction bond in 2000 called Measure V. (Click here for a related article by Santa Barbara schools Superintendent Brian Sarvis.)

Many of those finished projects — like the swimming pools at Dos Pueblos and Santa Barbara high schools – had suffered from costs that swelled way beyond projections.

For La Cuesta, which attracted a dozen interested companies, it’s the other way around. On June 10, the Santa Barbara school board rejected all bids on the project, because — believe it or not — they came in too low.

The lowest credible bid came in around $800,000 — about $200,000 less than expected, said David Hetyonk, the district’s facilities director.

The school’s modernization plan called for putting in wheelchair ramps and other upgrades required by the Americans with Disabilities Act.

The board rejected all bids because the funding for half of the project is coming from a state matching grant. And the state keeps an eye out for accounting shenanigans in which a school might inflate its original estimate, with the intention of landing a fat matching grant that would end up paying for the bulk of the project. So the idea is to come as close to the original estimate as possible to avoid getting a smaller match, Hetyonk said.

As a result, Hetyonk is going to add “nonstructural” elements to La Cuesta’s project that will not require revisions to the architect’s design. Although he isn’t sure yet what they’ll be, he said they could include a paint job, some window replacements, new tiles, better door handles or roofing work.

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Summertime often means painting walls after the wear-and-tear of another school year. (Santa Barbara School District photo)

“I wouldn’t say it’s a good thing, I’d say it’s one of the few benefits of the current economic situation,” he said.

Arguably the most noteworthy success story, however, is that of the plan to replace the inadequate multipurpose room at Brandon School in the Goleta Union School District, where school performances had to occur in shifts because the capacity of the current room is only 180 — at school that enrolls 425 students.

For years, the Goleta school board had argued about how to pay for a new facility, and whether the project was even worth it.

By the time the project went to bid, its estimated cost had increased to $3 million from $2.3 million, said Ralph Pachter, the district’s assistant superintendent of business.

“The bid came in at just a tick under $2 million,” he said. “To a large degree that helped the board make the decision to green-light the construction.”

Naturally, for contractors, this isn’t necessarily good news.

For one thing, some local contractors have found themselves squeezed out by large companies from Los Angeles.

David Lack, CEO of Lack Construction of Santa Barbara, said UCSB is attracting up to 20 bidders on relatively small projects for less than $1 million.

“You used to see three-to-five,” he said. “You’re weeding out the small businessman.”

He added that many of the companies switching to the public market from the private sector are unaccustomed to the stricter rules required by public agencies, thus increasing the risk that less-qualified companies will get jobs.

“This is a cycle and it will work itself through,” he added. “We’ve had a good run.”

It’s not all good for public agencies, either.

Hetyonk said the flip side is the rising price of asphalt, because of the skyrocketing cost of one of its key ingredients: oil.

Hetyonk said this could affect the cost of some projects in the pipeline, such as some playground-area paving at Adams and Cleveland schools, along with a renovation at Santa Barbara High.

Interestingly, Carpinteria Unified School District missed out on the spoils.

In May the district went out to bid on its largest construction project in years: building a track and courts for basketball and tennis at Carpinteria Middle School.

The roughly $1 million project attracted just two bidders.

“We were pretty disappointed,” said Assistant Superintendent Cindy Abbott. “But there are so many factors.”

Noozhawk staff writer Rob Kuznia can be reached at [email protected]

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