Saving big bucks on Sandusky's justice center

SANDUSKY — To the surprise of many outsiders, especially when considering modern-day inflation, a multimillion-dollar project actually came in well under budget. Though Sandusky officials didn't express shock, pointing to their No. 1 government principle — ensuring fiscal responsibility — in achieving the right price. During a recent public meeting, city commissioners accepted a $10.6 million bid for a company to build Sandusky's new, long-awaited justice center. In short, the justice center aims to repurpose an old building, 222 Meigs St., into a state-of-the-art home for local police and municipal court operations. Officials want to renovate the old City Hall, beside Battery Park, into a modernized facility for these two government functions. The $10.6 million amount represents a nearly 20% drop from a previous estimate of $13.2 million. Staff members didn't remove any major aspects from the scope. So how did this occur, especially in today's economic climate? "Competitive bidding provided us with a more than $2 million savings from the architect's estimate," city ex officio mayor Dick Brady said. "We have an obligation to provide a modern and functional facility for our police and our courts," Brady said. "The award of this contract for our justice center is a milestone for this city and for our commission." Best of all, residents can reap the benefits of these savings in future projects undertaken by Sandusky's government, Brady said. "This translates into more streets being paved, more sidewalks being poured and more trees being planted," Brady said. Changing it up In 2018, after administrators vacated their portion of this building — relocating to new City Hall in downtown — police and municipal court employees stayed behind and have remained there ever since in a holding pattern. Right now, the former City Hall site totals 42,000 square feet but only uses about half this amount of space. With the proposed changes, officials believe they can make better use of this space. The project takes into consideration two major worries officials conveyed about the present-day building, opening in 1956. With police, it's storage capabilities. "In some cases, we have to keep evidence for 20 years, and space is very limited today," Sandusky police Chief Jared Oliver said. "I'm really excited about this." With the municipal court, it leaks and experiences other plumbing problems. "Those issues and others are priorities in the plan," said Aaron Klein, the city's public works director, adding how Sandusky Municipal Court Judge Erich O'Brien also backed this idea. Switching the site Originally, and in 2018, commissioners supported a plan to build a justice center at the former American Crayon site on Hayes Avenue (Ohio 4). They did initially consider remodeling the building at Meigs Street for court and police purposes. But problems popping up on Hayes Avenue, potentially leading to significant cost overruns, prevented such a move. Fallout from the COVID-19 pandemic also delayed Sandusky's justice center project. Officials eyed sometime in mid-2020 as a good time frame to break ground on the Hayes Avenue site. But it never happened. During an analysis period, officials discovered a huge underground gas line, which they couldn't construct atop from and, thus, needed to avoid. Doing this would have restricted where they could build, ultimately shrinking the 37,000-square-foot site's usable portions by about 16%. Additionally, officials expressed hesitations about the site's foundation. "When we looked at the subsurface, we realized it couldn't support the building and would add to our costs," Klein said. Finally, the other pressing issue circled back to traffic congestion. With Hayes Avenue sloping near the underpass, and Rockwell Street representing a narrow residential corridor, officers expressed concerns about properly, rapidly and safely exiting this site. "Considering all of this, it didn't make sense to build there," said John Orzech, the city's assistant city manager, Sandusky's former police chief and longtime local law enforcement officer. Building a new justice center on Hayes Avenue, back then, totaled $13.4 million, however, with these complications, the cost surely would have dramatically increased. To correct these site shortcomings, "We would have had to spend more money," Klein said. "So then we started to think that (the former City Hall site) could be the right location." So what could now happen at the former American Crayon site on Hayes Avenue? "It was determined the highest priority for that site was recreation, and with the recent partnership between the city and Cedar Point, our goal is to begin planning for the rec center on that site," Sandusky city manager Eric Wobser said. He referenced the $100 million deal Sandusky's government signed with Cedar Fair, Cedar Point's parent company, this past fall on a number of citywide upgrades. Answering project questions Two city officials, Klein and finance director Michelle Reeder, answered a series of questions related to the project's budget and timeline: Questions on the project's budget Q: What are the main reasons for the cost decreasing from $13.2 million to the actual price of $10.6 million? AK: For starters, some of the cost increases resulting from current cement and structural steel pricing would not be seen on a reuse/refurbishment project like this whereas they would have been seen on new construction at American Crayon. Commission's decision to stay at 222 Meigs St. likely saved significant dollars. Of course, the engineer's estimate was for the reuse project that was bid, and we did not take anything out of the project in order to get a lower price. It was bid as desired by the occupants and designed by the architect. I had heard that some contractors are excited about getting a project that is 18-plus months on their books is very appealing with the forecast of a recession. But I honestly just have to chalk the low pricing up to having good, qualified, local contractors competing for a desirable project. Q: How is this project getting funded? MR: The general fund will not directly be contributing to this project. The project will be financed: • 40% through municipal court capital funds • 60% city funds; The city-funded portion will be paid from general bond retirement funds and Cedar Point partnership funds. The city is required to place 6.25% of each income tax dollar in the general bond retirement fund. This equates to around $750,000 to $780,000 in annual revenue currently. Note: Sandusky's general fund, or everyday operating budget, totals about $25 million. The taxpayer-backed account pays for dozens of public services, such as police, fire, parks, roads and more. Q: Will this project carry any debt? MR: We estimate the debt payment for the justice center will be around $210,000 annually from the bond retirement fund over 25 years, which still allows capacity for other future projects. We have utilized available resources to pay down our debt obligations over the last couple of years. This gives an available funding source and additional capacity for future projects. Prior to issuing any additional long-term debt, the city is on track to pay off all current obligations of the general bond retirement fund by the end of 2026. Looking back to 2014 and 2015, we had an annual obligation of over $1.7 million in debt payments from the general bond retirement fund. Q: What message do you hope people understand through this budgeting process? MR: Being fiscally responsible with the city funds is a top priority. During the budgeting process, we analyze and prioritize projects and then look for available resources to fund each project. We are excited that our city manager, city commission and Cedar Point agreed to an increase in admission and parking tax revenue to generate additional funds to invest in our city. Questions on the project's timeline Q: What does this bidding step represent in the project's grand scheme? AK: It means that a project originally conceived in the early 1990s and readdressed in 2015 has reached the final phase. More and more systems and equipment fail annually. Organizational flow is inefficient with some space not even utilized while others are overcrowded. It represents staff's commitment to seeing through the desires and goals of publicly influenced planning documents after they are adopted by city commission. Q: What are the project's next big steps? AK: Contract books (were signed last) week, and the contractor will provide a construction schedule soon. There is consideration for a groundbreaking in the coming weeks. Q: What is the construction timeline? AK: The contractor is finalizing their staffing plan, but I'm guessing interior demolition to begin in October with construction completion in the spring of 2024. Q: Right now, what else should the public know about this initiative? AK: It is important for the public to know that all police, court and prosecutor activities will continue to operate at 222 Meigs St. throughout construction. Office locations and entrances may change as the contractor proceeds, but daily operations should be impacted.