“Poor planning,” “poor project management,” “gross cost overruns”! Good Lord. Accusations abound that we’ve been misled. And the Vince-Scott crowd says we’ve got our heads in the sand. Fitting image? Let’s see.
For the benefit of our readers, here we’re going to set the record straight. Time to give credit where credit is due. Or, at the very least, put this “overruns” matter to rest.
Critics point to the 111 E. Chestnut Condo Assoc eMail Bulletin – Autumn Newsletter. In it Board President Anthony Milazzo said: “Though all of the building projects listed above were completed at or below our budgeted cost estimates, the loading dock project was an [read the only] exception, coming in over budget by about 13%.”
Let’s do a little forensic accounting.
– On October 23, 2012, the Association’s 2012 Operating Budget had $195K estimated for the Loading Dock (actual was 0, i.e. we didn’t do it then). Then we budgeted $100K for 2013. We were to split the cost with the 830 Shops (Ghirardelli, Bar Toma, etc.), the property then owned by Grovesnor.
– In November 2012, our property manager said, “D&K’s loading dock [estimate] is $200K as is ours [Sudler Property Management], but keep in mind the easement agreement splits this cost and the Association only pays 50%. Hence, $100K in the budget.”
– A few months later, May 10, 2013 to be exact, we entered into a contract with Berglund Construction to the tune of $324,227.
– By July 2013, the total project had ballooned to $451,244.90! See the Enumerated Loading Dock Project Costs.
Coincidentally, it was on the same day (September 6) that the Enumerated-Costs piece was produced, that Milazzo turned around and told us that the loading dock project was the only project over budget and only by about 13%. And on September 20, our property manager was given a $3,000 bonus ostensibly for good work done with the projects.
Okay okay, let’s not jump to conclusions. Let the math speak. Using $200K as the base, our part was to be $100K. It’s looks like our part came in at around $359K, give or take. That makes our “over budget” more like 259%. That’s one scenario. Another is vetting it in accordance with the 50/50 split (which does not appear to have actually happened but here for argument sake). So even based on that, with the total cost at $451, we’re still about 180% over budget.
BUT let’s not jump to conclusions. There’s an easier way to look at this: ya take 259; subtract Sara’s $3,000 bonus reducing the total to 256; and then per the imagined discretion of a condo board president, ya add ’em up (2+5+6). And there you have it, 13%.
Of course, that was the ONLY item over budget, we’re told. Rest assured that the roof replacement, rooftop air handlers, bike room, deck furniture, house pumps, boiler replacement and window sealant project are all good. Right?
Excuse me while I put my head back in the sand.