Skyrocketing costs could reduce size of Facilities Master Plan

Michael Seton

In April 2022, the Tamalpais Union High School District (TUHSD) board decided to move forward with a $394 million project to improve various TUHSD campuses, as described in a Facilities Master Plan (FMP). The FMP proposes various changes for Redwood including mechanical, electrical and plumbing infrastructure updates and new arts, music and cafeteria buildings. Then the TUHSD Board hired construction management firm Greystone West Company to flesh out the details, a process that was completed in January.

At the Jan. 24 TUHSD board meeting, Corbett Elsen, TUHSD’s assistant superintendent of business and operations, presented the impact of current market conditions and project changes on the FMP. Most significantly, Elsen indicated that the cost of the plan has increased dramatically to approximately $517 million. Several TUHSD board members, including Cynthia Roenisch, were surprised by this news.

“I have to say I’m stunned at the difference in the price between what we had in October when we approved the plan [and now],” Roenisch said.

Elsen explained this increase was caused by the need to comply with the American Disability Act, new energy building codes, higher construction and labor costs and bond issuance expenses to pay for this project. Todd Lee, president of Greystone West Company, provided more details about the $123 million discrepancy.

“You’ve got the perfect storm of recent escalation, post-COVID-19 changes and projections that were on the aggressive side in your FMP,” Lee said. “For example, the FMP assumed the addition of cooling to the existing heating, ventilation and air conditioning (HVAC) systems. But due to COVID-19, the building code was altered, so you went from adding cooling to the existing heating systems to a wholesale replacement of the HVAC.”

Another recent change in the building code is the requirement for all new buildings to be solar-powered and have a battery backup system. This will result in significant infrastructure work to provide electrical capacity for these new systems.

Despite these explanations, the board was still uncomfortable with the sizable increase in cost.

Reflecting deferred maintenance, fixing these items are a top priority in the Facilities Master Plan.

“Right out of the blocks we were hit by a 25 percent increase, so I think we all were just taken by surprise and need reassurance that [there aren’t] any other hidden issues,” Roenisch said. “I think it was timing. We all expected to see some changes, but not within months and of this magnitude.” 

The increased cost means the size of the project will have to be reconsidered if $517 million of financing is not available. The original $394 million plan ranked certain FMP improvements as the top priority, second priority and third priority items. Roenisch expressed concerns about which priorities the project is likely to include going forward. 

 “Have we done our due diligence to really refine this project, [since] maybe now it’s going to include only [items prioritized as] one and two?” Roenisch said. “Maybe we can’t include [items prioritized as] three.”

In response to the cost issue, TUHSD bond consultants Keygent Group presented bond funding alternatives to raise the necessary funds at the Feb. 7 board meeting. Keygent explained that the district’s current funding capacity would allow it to issue $517 million of new bonds. The next step in the process is for TUHSD polling consultant, Godbe Research, to test the local community’s receptivity to an increase in property taxes. These results should be available later this spring along with the final refinement of the FMP.