Owner’s rep to cost district far more than anticipated

The Port Washington-Saukville School Board on Monday hired an owner’s representative to oversee $59.4 million in projects if an April 1 referendum is approved, but those services will cost far more than expected.

The board approved a contract with Building Solutions, a Pewaukee firm that specializes in school projects, for an estimated $487,000 — a fee based on a percentage of the cost of the projects.

During initial conversations about hiring an owner’s representative in January, Director of Business Services Mel Nettesheim told the Finance and Human Resources Committee that hiring such a company would cost $10,000 at the most.

But in reviewing proposals from three companies, it became clear that the complexities of the district’s projects, which includes the construction of a new school, require far more comprehensive and costly services, administrators said.

“The initial estimate for owner’s rep services was based on a limited scope,” Nettesheim wrote in a memo to the School Board. “However, as the district evaluated the true scope of responsibilities needed, it became clear that a more comprehensive level of expertise is required.”

Key for the district is that Building Solutions guarantees it will save the district an amount of money that equals or exceeds its fee or the cost of its services will be reduced to match the savings.

“The guarantee was really the big thing for us,” Supt. Michael McMahon said.

Andy Reahm, a Building Solutions director, told the Finance Committee last week, “What we find is that our fee is repaid many times over.”

Kurt  Wiebelhaus, another director of the firm, said Building Solutions typically saves its clients an amount of money that is between two and 14 times more than its fee.

“We guarantee there will be savings or we adjust our fee,” he said.

Firms such as Building Solutions represent the interests of project owners by monitoring contractors hired to perform the work, scrutinizing contracts and reviewing what can end up being dozens of change orders in an effort to keep projects on or below budget and ensure they are completed on time.

“We’re advocates for you working alongside you as a staff member would,” Wiebelhaus, a former director of buildings and grounds for the Mukwonago Area School District who also has experience as a project manager, said. “We manage the details. We make suggestions.”

Administrators said they have neither the expertise nor the time to closely monitor $59.4 million worth of projects.

“Hiring an owner’s representative is not an added expense — it is a necessary safeguard to protect district resources and ensure the success of capital improvement projects,” Nettesheim wrote in her memo.

It is also becoming a more common practice. The City of Port Washington, for instance, hired an owner’s representative to oversee the design and pending construction of its $33.5 million public safety building.

Contracting with Buildings Solutions is the first of three critical hires for the School District. If the referendum is approved, the firm will work with the district to hire an architect and general contractor, a process that would begin almost immediately after the April 1 vote.

Building Solutions also has real estate experience, which is important for the district, McMahon noted, because it is currently negotiating the purchase of 10 acres at 2803 Orchard La. in the Town of Saukville for a new Saukville Elementary School.

The land, which would be annexed into the Village of Saukville, is seen as an ideal school site because it abuts a residential area on the village’s west side and is surrounded on three sides by farmland, woods and wetlands. A prospective buyer of the 100-acre parcel, which is currently owned by the Elda V. Bunk Living Trust, would sell 10 acres to the School District, then protect in perpetuity the remaining 90 acres with a conservation easement, according to a proposed deal confirmed by both school district and town officials.

McMahon said last week that negotiations continue.

“We feel good about the direction of negotiations,” he said.

The two other owner’s representatives that bid on the School District contract are Concord Group and Huffman Keel Partners. According to a district analysis, which was based on fee structure and additional fees, the Building Solutions proposal was the least expensive.

The hiring of Building Solutions comes two weeks before a vote on the district’s first referendum since 2015, when it received approval to borrow $49.4 million to give Port Washington High School a sweeping makeover and expand and renovate Dunwiddie Elementary School.

Now it is asking voters for $59.4 million — $45.8 to construct the new Saukville school and $13.6 million to pay for major maintenance projects at its other four schools.

To explain its proposal, the district has held a series of referendum information sessions and is now inviting the public to tour Saukville Elementary School over the district’s spring break.

Personal guided tours will be given on:

• Monday, March 24, from noon to 1 p.m. and 2 to 3 p.m..

• Tuesday, March 25, from 7:30 to 8:30 a.m. and noon to 1 p.m.

• Wednesday, March 26, from noon to 1 p.m. and 5 to 6:30 p.m.

• Thursday, March 27, from 8 to 9 a.m., noon to 1 p.m. and 3 to 4 p.m.