Mayor Barrett Statement on City Hall Restoration
Mayor's Office News
FOR IMMEDIATE RELEASE: May 19, 2005
Contact: Press Secretary Carlene Orig, (414) 286-8531
Mayor Barrett Statement on City Hall Restoration
The restoration of City Hall has been one of the most challenging decisions that I have had to make as Mayor. The project has immense cultural, economic, and financial implications for the City, and I have had to balance numerous considerations. I received helpful and constructive insights from multiple persons, including Common Council members. For that reason, I have been deliberate and painstaking regarding whether or not to accept the low bid the City has received to restore this architectural treasure.
Make no doubt about it, City Hall Restoration must move forward. I have concluded that the best course of action to protect Milwaukeeans' multiple interests is to accept the low bid and proceed with this project. My conclusion is based on the following:
Several experts have concluded that City Hall's present condition poses substantial risks to the public's safety. Delay and further inquiries will only cause this risk to escalate, and require additional tax dollars to protect the public.
Timely project initiation enables us to avoid continuing deterioration of the building with its accompanying implications for cost. Remedial stabilization efforts would cost at least $300,000 and would increase as project delays lengthened.
From a cultural standpoint, City Hall represents a unifying source of pride and common identity. Milwaukeeans are justifiably proud of the building's designation as a National Historic Landmark. City Hall has taken on significance beyond the bricks and mortar that hold it together; it is a symbol of our community and unique history.
Risks of Bid Rejection
All of us involved with this decision have invested considerable time and effort to explore whether there are feasible and advantageous alternatives to accepting the low bid. I received a wide range of suggestions, including rejecting bids and reinitiating the bid process in the hope of attracting additional competition; modifying the City Charter to allow for alternative project delivery approaches such as design/build; or limiting the project's scope in order to avoid the cost implications of full restoration.
I have concluded that no alternative offers a compelling case for rejecting the bid. The various alternatives that I considered either involve an unacceptable compromise to City Hall's integrity, or pose considerable other risks. These risks included:
- The use of alternate materials would shorten the life of the restoration, without achieving significant savings. Accepting the low bid and implementing the project as designed will preserve City Hall for another 100 years or more.
- The unique character of this project and its requirements to adhere to preservation standards make design/build an impractical option. In addition to the cost and public safety consequences of delaying project initiation, employing design/build would likely add millions of dollars to planning and administration costs with no guaranteed savings.
- Some suggestions included reducing or eliminating contract requirements to ensure that this project reflects the diversity of Milwaukee's workforce and business community. I found such a compromise completely unacceptable. Ensuring that the local community shares in the economic opportunity associated with a major project makes good business sense. The Department of Public Works has demonstrated that it can work with contractors to make our requirements work in a practical and economic manner.
Managing Project Risk by Accepting Low Bid
I have concluded that accepting the low bid actually involves less financial risk to the City and its taxpayers than the other alternatives that I considered. My reasoning is based on the following factors:
- Both firms that made bids had a substantial opportunity to base their price on extensive and well documented statements of building conditions and project specifications. This leads me to believe that these bids reflect the actual challenges associated with this project. Further delay will add to the costs of remedial stabilization of the building, expose the project to additional inflationary impacts, and could actually deter contractors from bidding on a revised project.
- The project scope reflects an intentional decision to rebuild the South Tower and the 8th floor banding course and dormers. These elements constitute the most complex and costly components of project scope. Full reconstruction, as opposed to restoration, limits the project's unknowns and the City's exposure to change orders.
- The project's implementation will incorporate a construction cost management component, as the Common Council has required.
Several Council members share my concern regarding the impact of this project on City finances. I am confident that we can meet the financial challenges associated with accepting the low bid without compromising the City's fiscal position. First, a proposed cooperation agreement with the Redevelopment Authority regarding project finance provides additional budgetary flexibility that supports the City's interests. Second, my 2006 Proposed Capital Budget will include financing strategies that enable the City to fund important projects while continuing my initiative of limiting new tax levy-supported debt.
It should be emphasized that the question of how to proceed with City Hall Restoration results from an inadequate budget estimate, not a cost overrun. The unique nature of this project, combined with several circumstances prevailing in the construction industry, contributed to bids being considerably higher than originally estimated. The DPW Commissioner has outlined these factors in detail in an April, 2005 Status Report pertaining to City Hall Restoration.
During the previous administration, substantial cost overruns were experienced in several projects, including the construction of the Police Department's Third District Station & Data Communications Facility.
I believe the City can avoid major cost overruns for City Hall Restoration if it accepts the current low bid. This is due to the existence of factors such as a well-defined scope; extensively documented building conditions that informed project bids; design specifications that limit the potential for unforeseen conditions; and my opportunity to review this project and alternative delivery mechanisms with a number of well-informed experts. In addition, the partnership with a construction cost manager during implementation enables the City to identify potential cost exposure before it becomes a problem, and to ensure that change orders receive thorough scrutiny.
In summary, I want to thank everyone who contributed advice and insights regarding this project. It's now time to roll up our sleeves and proceed with preserving this treasure for generations to come!