ANNAPOLIS – The University System of Maryland told state legislators Tuesday it underestimated the cost of 16 construction projects by more than $52 million for the upcoming fiscal year, citing a seller’s market with unusually high construction costs.
Joseph F. Vivona, system vice chancellor for administration and finance, said “market factors” were responsible for the change. The large number of projects in the state split among few contractors and limited materials available led to higher bids, he said.
But the numbers on a few projects were significantly higher.
Construction costs for renovation of the chemistry building at the University of Maryland, Baltimore County, for example, were originally estimated to cost $14 million. Officials now say that figure should be closer to $25 million.
“I guess I’m just flabbergasted,” said Sen. Gloria G. Lawlah, D-Prince George’s. Likening the process to buying a house, she said she could never afford such an increase in price.
Officials told members of House and Senate subcommittees that they underestimated the cost per square foot of the new buildings. “This market issue caught us all off guard,” said Mark Beck, system capital planning director.
Lawmakers questioned whether the changes would lead to future cost increases. “The onus is on us to say we will live by these numbers,” responded Beck.
The system is made up of 13 institutions, including University of Maryland campuses, Frostburg State University and Towson University. The state will spend almost $400 million in higher education capital expenditures this year.
Several legislators shook their heads as they reviewed the numbers, which show the UMBC chemistry building renovation and renovations to a Towson building costing roughly twice the original estimate. All but one of the 16 projects will need $1 million or more in additional funding.
Sen. Robert R. Neall, D-Anne Arundel, admonished the group to estimate figures more carefully earlier in the process, rather than continually revising them. “We’ve got a great big cat box here, and not enough cat litter to cover it up,” he said.
Lawlah was concerned that the larger institutions would benefit from additional funding at the expense of smaller schools that need the improvements just as badly and have waited just as long to get the funding.
Lawmakers asked if cost overruns existed for Comcast Arena, the new $127 million sports complex for the College Park campus that recently began construction. Frank Brewer, UMCP assistant vice president of facilities management, said that the state stadium authority was overseeing that project, not the university system, but he had not heard of any budget problems.
System officials promised to meet with legislative staff monthly to update them on cost issues. In order to get the new funding, system officials would have to get the support of the governor and the Legislature in the next session beginning Jan. 1.
“The estimates originally were what they are – estimates,” Vivona said after the meeting. But he admitted the system made mistakes. “In the case of one or two buildings, we made an error, a fundamental error that regardless of the market and without changing the scope, we had the price wrong.”
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