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District building project more than $1 million over budget

Board pushes contractor, architects for answers

May 09, 2012 - Goodrich- An apparent error in accounting has drawn the ire of several school board members.

On Monday night the school board and administration gathered for a work session to discuss an alleged error that put the district $1.1 million over budget in renovations and building projects. Architects from Fanning Howey, along with construction management services representatives from Wolgast Corporation, who were hired by the district last year to design and oversee the project, were also at the meeting.

In February 2011 district voters approved a $15.4 million bond extension to be used for educational facilities, technology, athletics and energy upgrades. Construction has been ongoing since the summer of 2011, with many of the bids for projects awarded.

"We as a district have monitored the books and were confidently assured that our expenses for the projects are in line with our budget," said John Fazer, district superintendent. "We were running on target with regard to our budget for the district's projects."

Fazer said that about a month ago technology bids, which total about $3 million, were $377,000 over budget and the Reid Elementary construction bids were $55,000 over budget.

"We are prepared to make those adjustments to the budget—those numbers can be dealt with," said Fazer. "However, what the district was not aware of was suddenly Wolgast informed us there's a $1.1 million deficit. They notified us of that about three weeks ago. This is by no means a criminal issue; rather, it appears to be an accounting error regarding the transfer of funds. At this point we have not received a sufficient answer for the discrepancies. We've had a number of long discussions—we've asked both companies to attend the work session on Monday night."

Jerry Stefano, vice-president of Wolgast Corporation, along with Andy Turbett, of the architectural firm Fanning Howey, and Aaron Grove, Wolgast construction manager, attended the work session.

Turbett reminded the board that a contingency account balance of about $800,000 is still intact. The money in the contingency is set aside to cover any shortages or emergencies that may arise during the construction.

"The bad news is we are over budget for the project," said Turbett. "We have been discussing how to put this back into alignment, but it would require cuts at different buildings. We made some transfers of money that some of the bids would come in lower."

David Cramer, school board trustee fired back at Turbett.

"It's not about cutting—you need to explain to us why are we over budget? What went wrong?" said Cramer. "We are not going to touch the budget not at all. Have you accounted for every dime? No."

Stefano and Turbett had prepared a series of recommendations to accommodate the deficit.

However, the board suggested that Wolgast, along with Fanning Howey, return to a special May 14 school board meeting to further discuss the issue.

"I'm not going back to my friends, neighbors and community members and look them in the eye and say, 'Wolgast is very sorry about this,'" added Cramer.

"That's not acceptable."

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