City news roundup: New school’s cost expected to go up; HEC to end electric rate discounts

Students dig in as part of the ceremonial groundbreaking for the new high school in January 2020 before the pandemic paused the building’s construction. (File photo)

By Randi B. Hagi, assistant editor, and Eric Gorton, contributor

Because of building materials’ rising costs, Harrisonburg’s second high school could cost an additional $7.7 million, according to an estimate presented to city and school district leaders Tuesday. 

Last year, the total cost of the project was set at $104.8 million, which included the $87.2 million “guaranteed maximum price” for Nielsen Builders, Inc. to construct the school, plus the cost of the land, road improvements, right-of-ways, as well as furniture, fixtures and technology.

The school division is now working with Nielsen on “change order number five,” the paperwork that will officially restart construction. The site has lay dormant since April 30, 2020, when school and city leaders decided to pause the project because of the pandemic’s effect on the city’s coffers.

A final draft of the change order, including the price increase, will be presented at either the July 13 or July 27 city council meeting, at which point the council could vote to resume the project. In anticipation of council’s approval, Jim Delucas, chief development officer at Nielsen, said their team would go ahead and resume site work next month.

“There’s still some more rock that needs to be blasted to get the pad ready,” he said during Tuesday’s City-School Liaison Committee meeting. “We’re about, maybe three weeks away from actually… putting concrete in the ground. So pretty much the month of July will be spent getting things geared back up, mobilizing back on-site, grading, and getting ready for concrete.” 

Delucas said the current estimate of a $7.7 million increase was based on the price spikes of steel, copper, concrete, petroleum, and other building materials since the project was halted.

“The urgency to get this going is so that we can lock these subcontractors in so that there is no more escalation,” Delucas said.

But some city leaders pushed back on that price tag.

“Is there a way we can time this so that we can take advantage of the market, rather than just saying that we’re locked in?” asked City Manager Eric Campbell.

Delucas said some commodities, such as copper, could be purchased later in the project, but it would be a gamble as to whether the price will drop. Upon request from Council Member Chris Jones, Delucas agreed to send city leaders research from the Federal Reserve and Associated General Contractors of America anticipating the future markets for those materials. 

“I know you’re not a soothsayer or a fortune teller,” Jones said. “As you know, there are many residents and business owners that think we’re paying too much money, so if there’s an opportunity for us to find ways and means in which we can save money, or at least have the comparative while we’re making the decision, we’ve got to have that information.”

Mayor Deanna Reed told The Citizen after the meeting that the council knew prices would increase when they delayed construction.

“That’s why we felt like we needed to make a decision as quickly as possible — because prices were just going to continue to rise. That was the first time I actually heard the number,” Reed said, referring to the $7.7 million figure. “It was more of an increase than I thought, but I still think we made the right decision.”

One of the downsides of the current construction timeline is that some temperature-sensitive processes, such as assembling the steel frame and pouring concrete, will take place during the winter. Delucas said that would likely delay completion until Dec. 31, 2023. When the city council initially approved the project in December 2019, the school was slated to open in fall 2022. The pandemic had pushed expectations to fall 2023. 

Superintendent Michael Richards told The Citizen after the meeting that he would open the school as soon as possible, even in the middle of an academic year. 

“If we have an occupancy permit and it’s the middle of the year, we’ll start moving some kids,” he said. “I don’t want to scare families … we’ll do it in a way that’s least disruptive. But we really need to relieve the overcrowding as soon as we can.”

During the meeting, Richards said the Weldon Cooper Center for Public Service, which crunches population numbers, has predicted that Harrisonburg High School will have more than 2,000 students before the new high school is completed. The existing school’s capacity is just 1,350. 

Reed told The Citizen, “we need to do what we need to do to get that school up and going, and get the students in that building so they can be properly spaced out and be safe.”

Also in the meeting, Richards informed the committee that the School Resource Officer (SRO) task force would have a meeting open to the public on Wednesday, June 23, at 6 p.m. at Skyline Middle School. 

He also said the group is expected to give him a recommendation about the roles of Harrisonburg SROs by late September, which would then go to the school board for approval before being reviewed by the Harrisonburg Police Department and city council. 

HEC to end pandemic-related rate discounts

Harrisonburg Electric Commission customers will stop receiving discounts on electricity beginning in July.

The HEC board voted Tuesday to restore the rates that have been discounted by 2.5% since July 2020 due to the COVID-19 pandemic.

A sharp increase in the cost of wholesale power that HEC purchases from Dominion Energy necessitated the end of the discounts, said Brian O’Dell, the municipal utility’s general manager. Rate schedules will be posted on the HEC website on or about July 6, he said.

The HEC creates its budget based on wholesale power cost estimates Dominion provides in January. This year, the actual cost to purchase power turned out to be $3.7 million more than the wholesale cost that Dominion had provided in the preliminary estimates.

O’Dell also told the board that HEC will end its moratorium on disconnecting residential customers who are delinquent on their bills. That change will happen Aug. 30.

The moratorium went into effect when Gov. Ralph Northam declared a state of emergency because of the pandemic. The declaration is set to expire June 30 and utilities can resume disconnects 60 days after that.

Residents who are behind in paying their bills can avoid being disconnected by setting up a payment plan, O’Dell said. The amount that is delinquent will be separated out and put on a different payment schedule, which the customer agrees to. As long as payments are made in addition to keeping their account current, they can avoid being disconnected.

“Our concern has to do with those residential customers that are building balances that will be hard to dig out from under, who haven’t reached out to start making payments under the payment plans that have been offered,” O’Dell said.

HEC billed more than 2,100 accounts, mostly residential, for delinquencies during the most recent billing cycle for a total of about $478,000, O’Dell said. Before COVID, the average was around 1,800 delinquent accounts amounting to about $360,000.

“The pandemic affected many families here in Harrisonburg and their ability to keep up with their expenses.  We have been fortunate that our customers, for the most part, have continued to pay and keep their accounts current,” O’Dell said.

HEC recommends families who need assistance contact People Helping People at 540-433-7286, The Salvation Army at 540-434-4854 or Harrisonburg-Rockingham Department of Social Services at 540-574-5100.

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