Council Dives Into New High School Numbers

By Adam Swift

The future location of a new Revere High School doesn’t seem like as much of a sure thing as it did only months ago, at least for a few city councillors.

During a nearly three hour ways and means subcommittee meeting Monday night, the City Council heard from the project manager about the project costs and Revere’s share of the price tag.

Once again, the council also heard from the city’s chief financial officer, Richard Viscay, who stated there will have to be some tough decisions made to pay for the project.

Near the end of the lengthy meeting, several councillors said they would like to see revised cost estimates for a project that would keep a new high school at the site of the current Revere High. There was also an agreement among several of the council members that the price tag for any high school building project would have to drop to make it more palatable.

The latest series of council meetings on the project was set in motion late last year, when the cost estimate for the new high school ballooned to nearly $500 million, up considerably from the $384 million estimate the council was presented with when it voted to select the Wonderland site as the location of a new Revere High School last year.

Brian Dakin, the senior project manager for the high school project from LeftField, kicked off the meeting with a presentation on how the estimated cost of the project jumped due to unprecedented financial times over the past year.

Dakin also had some good news on the financial front as the city attempts to meet a March 1 deadline to submit schematic design plans for the project to the Massachusetts School Building Authority (MSBA).

The latest overall cost estimate for the new high school has dropped to just over $480 million, with an expected increase in the MSBA grant from the state of about $22 million.

The latest figures put the current expected cost of the project to Revere at $296 million, according to Dakin.

Dakin also addressed the increase in the project costs from the preferred schematic report (PSR) phase of the project early last year to the figures that were presented to the City Council in December.

“The main thing that happened there, which unfortunately happened not just to Revere but to everyone building these projects, was that the cost escalation that was estimated in the budget that we presented turned out to be inaccurate,” said Dakin.

Early last year, Dakin said there were estimates of 6 to 7 percent for cost escalation, which he said is high in the construction industry.

But the actual cost escalation in the construction industry over the past year has been closer to 15 percent, Dakin said, with certain items in construction spiking as much as 30 percent over the past year.

“The cost escalation projection that we had built into the budget a year ago did not pan out,” he said. “Those impact how we estimate the cost escalation.”

In addition, Dakin said there were also some cost increases related to site work related to wetlands and environmental factors.

“The other main difference is a year ago, when we were looking at this, we were also charting a September, 2026 occupancy,” said Dakin. “Based on the amount of time it took to get here and get the eminent domain process in process and done, we are now looking, at best, at a September, 2027 occupancy.”

That extra year, on top of the historically high construction escalation costs, were major factors in the increased project cost estimate.

Dakin compared the projected cost of the Revere High School project to several other high school building projects in the state that are at a similar point in the process. The effective construction cost per square foot of a new 422,600-square-foot building in Revere is $948 per square foot, Dakin said. The estimates for new high schools, including ones in Wakefield and Boston, range from about $860 per square foot to over $1,000 per square foot.

“The range is pretty staggering, I’m not going to say these numbers are normal to us in the industry,” said Dakin. “In the last few years, all these numbers have gone through the roof.”

With ways and means subcommittee meetings on the high school project scheduled through February, Dakin said he will present a more detailed breakdown of the project budget, including programming and contingency costs.

During the question and answer phase of the meeting, several councillors noted the need to get the project moving, since the cost of building will only go up with more delays.

“Whatever we build, we should build top notch, and not something that is going to be antiquated in 20 years,” said Ward 5 Councillor John Powers.

Several other councillors, however, expressed concern about how the city will pay for it, and asked that the consultants come back with a cost estimate for going back to a plan to build on the current high school site.

“This particular project tonight, if I had to vote for it, there is no way I would vote for it, because I cannot see the way, I have not seen a pathway, certainly not without a debt exclusion or Proposition 21/2 override, that the city is going to be able to afford its share,” said Councillor-at-Large Dan Rizzo.

Dakin said a vote to submit the planning schematics to the MSBA does not mean the budget numbers are locked in. If the City Council were to vote on the submission in March, a final agreement with the MSBA would likely come back to the city in May. That agreement would set the number for reimbursement from the state.

Even at that point, Dakin said there would be additional design steps where there could be opportunities to save on the overall budget.

Council President Patrick Keefe said there is a need to bring the price tag of the project down, in addition to finding ways for the city to pay for it without putting it on the backs of the taxpayers.

“We have to find a way to reduce the budget, then we have to find a way to produce from our end, from the city budgeting standpoint, a way to make sure we are not passing it off to the taxpayer,” said Keefe.

Councillor-at-Large Anthony Zambuto raised several issues about the vote to bond $29.5 million to take the approximately 33 acre Wonderland parcel by eminent domain.

“My contention is that the council voted without having the full information,” said Zambuto.

Zambuto reiterated his stance that the actual cost to the city of the land taking (which is not included in the total project cost) will be higher than the $29.5 million that was bonded. He has also said he was against building on the Wonderland site because it takes potential property tax income from development of the site off the table.

Zambuto, Rizzo, and Councillor-at-Large Gerry Visconti were among those Monday night who asked Dakin to come back with a revised estimate to build on the current site. The current high school site was considered a final option for a new high school by the school building committee, alongside the Wonderland parcel.

Dakin said it would be possible to go back to a plan for the original site, but that it could push the project back several years.

“Is it possible?” Dakin said. “Yes. Would it be open a couple of years later than the track we are on? Yes.”

The delay would also lead to a greater cost escalation, he added.

The councillors also grilled Viscay on how the city will pay for the project. At last week’s council meeting, the CFO presented a number of options he was looking for input on to help make debt payments for the project.

Viscay noted that on the current schedule, the debt payments would start to hit their peak around 2028. He also noted that the debt payments could range from $14 to $19 million per year, depending on interest rates.

Viscay’s presentation touched on a wide range of avenues to cover the expected debt service for the new high school, ranging from expected new growth from the HYM Suffolk Downs development, to increased city fees, to tightening the city’s operating and capital budgets, to the eventual extra capital that will be available when the city’s pension plan is fully funded in 2034. Viscay also noted that the city does not have any income from cannabis sales, and the council may want to rethink allowing recreational cannabis sales in the city as an avenue to raise money.

One of the biggest chunks the city could take out of its budget would be for it to renegotiate with its unions to provide a Group Insurance Commission health insurance plan through the state rather than its current health insurance plan.

Viscay said the city could ultimately realize $3 to $5 million per year in savings by switching to a GIC plan.

“We’re not going to build this by cutting paper clips and travel budgets,” said Viscay. “We’re going to have to make some serious decisions.”

Viscay was asked several times if the city could pay for the high school without a debt exclusion or override. Viscay said if the council did not want to move forward with any of the options he brought forward, it would not be able to afford the debt payments without an override or debt exclusion.

Visconti noted that even if the council had the stomach to move forward with an override, the city’s voters would have the final say on that option.

“My concern is that if we vote yes, the taxpayers are going to say not, and where does that leave us?” said Visconti. “That’s a major concern.”