Millions of dollars being spent for school expansion

“That’s all just the price of doing business”

To the right person, an autograph from Michael Jordan, Marilyn Monroe or one of the Beatles could be worth thousands of dollars. And a signature from school superintendent Jon Nelson could be worth millions.

Already the RE1J school district has signed nearly $4 million in contracts for construction contractors alone, with more to come as the district goes about renovating six school sites and a bus garage.
The signing started when George K. Baum and Company beat out competing financial firms for the contract to help the district through the bonding process.
Under the agreement, the company got nothing unless the district’s $55 million bond initiative was successful. When it was, the company recouped more than $17,000 it had spent conducting a phone survey and constructing another survey that was mailed to residents.
By advising the district on all aspects of the bonding process and then organizing a $10 million bond sale on December 16 and another $45 million sale on January 5, George K. Baum also earned $5.57 on every $100,000 in bond money sold, amounting to $316,000.
“Now that all of the bonds have been sold… our job is to advise the district on their options for the reinvestment of the bond money. Once that is done, we’ll be watching the market for refinancing opportunities,” says Todd Snidow, a senior vice-president with George K. Baum and Company.
Snidow also said the company makes an additional profit by buying the “bonds from the district on settlement day and then marking them up to sell to investors.”
While work was being done to generate capital to fund the projects, Blythe and Co., a Grand Junction-based architecture and design firm, had been spending months working with the district, staff and residents on the form the newly remodeled schools would take.
For the work the firm conducted on the preliminary designs and to prepare plans for the November election, they received $57,000 that had been budgeted from the district’s general fund.
With the plans moving forward, the district finalized a contract with Blythe Group and Co. on January 5 worth approximately $4.5 million for project management and architectural and engineering fees.
“Those fees include everything from our very first day all the way until construction ends, including our six- and 11-month warranty walk-throughs, when we’ll come back and check for things that might need fixing or some other type of work,” says Roy Blythe, owner of the Blythe Group and Co.
Three of the firm’s staff also worked as consultants to the committee charged with selecting a general contractor to oversee the construction projects and coordinate the needed subcontractors.
The general contractor chosen to oversee four of the school projects in the Gunnison Valley—Gunnison High School, Crested Butte Community School, Lake Elementary and Gunnison Community School—was Grand Junction-based FCI Constructors Inc.
At a regular meeting on Monday, January 12, the school board approved the district’s contract with FCI Constructors that could be as much as $2.5 million. But the contract doesn’t commit the district to paying anything yet.
The amount the general contractor makes will be 7 percent of the cost of the construction done at each of the school sites as well as the cost of “general conditions” like garbage services, temporary fencing or water service and other things a contractor may need to pay for during the course of construction.
Before the district can know how that percentage will translate into dollars, the Blythe Group has to finalize the plans for each of the school sites.
For the two smaller projects, at Lake Elementary and Gunnison Community School, those plans should be ready by mid-April. Plans for the other two schools won’t be ready until early summer, according to Blythe.
When the plans are complete, FCI Constructors will send out a request for bids from sub-contractors and then choose the lowest and most qualified bidder from those that respond. The total of all the bids will be the cost of the work and will determine how much FCI Constructors makes.
“FCI will be paid incrementally throughout the project as parts of the construction are completed,” says Ethan Gibson, an owner representative with Blythe Group and Co.
Gibson says the contract with FCI Constructors, which won’t be made public until it is signed by FCI officials, sets the guaranteed maximum price, that is the most that can be spent on each school site.
General contractors will bid the two remaining schools in the district, Gunnison Valley School and the Marble Charter School, separately from the other projects. Those contracts, worth about $3 million together, will be brought to the district in the next few months.
The district also has old debts to pay from the proceeds of the bond sales, including a $24,000 bill from Bahr, Vermeer and Haeker, the architects that started the project and were later replaced by Blythe Group and Co.
“That’s all just the price of doing business,” says Nelson.