Project spent more than voters approved; board wants an accounting
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Keith Pennington
JANESVILLE The Janesville School Board on Tuesday night discussed the fact that the district spent more on the high school referendum project than voters approved.
They were not happy about that, but the thing that stuck in some members’ craws was that they didn’t know about the overage until now.
Board President DuWayne Severson said he was “quite surprised.”
Finance committee chairman Tim Cullen, who calculated the overage at $3.6 million, called it “unacceptable.”
Board member Lori Stottler pronounced herself “infuriated.”
District CFO Keith Pennington noted that voters approved borrowing up to $70.8 million in the 2006 referendum, but that it’s normal for interest earnings to be used on such projects as well. The borrowed money accrues interest until it is needed to pay contractors. About $2 million was earned in interest.
The board in 2007 used $500,000 of those interest earnings to lower the tax levy, Cullen noted.
Pennington told the board that extra spending came out of the district’s operating budget over the past three years, about $390,000 of that in the current fiscal year.
Pennington asked the board to replenish the operating budget by moving up to $400,000 from the Fund 10 balance—the district’s rainy-day fund—into the operating budget.
The board took no action. Stottler said she does not want to have to cut next year’s budget because $400,000 was taken out of Fund 10.
Cullen, who apparently had looked into the matter before the meeting, said by his count, $3.6 million extra was spent on the project.
Cullen said he was told that spending scheduled for other district purchases—including computers for elementary schools—was canceled in order to pay for the high school projects.
Board member Bill Sodemann asked the administration to verify Cullen’s calculations.
“Maybe all this spending made sense. Maybe it was crucial. But to do it without the consent of the board or the knowledge of the board, I find it unacceptable,” Cullen said.
Pennington said he does not know where all the extra money went, but he has an idea about some of it, including:
-- Unexpected asbestos found under floors that had to be removed.
-- Code upgrades that apparently weren’t planned for.
-- Work to make the Craig heating/ventilation system operational.
-- Equipment and furnishings not in original plans.
-- Concrete and other repairs not in original plans.
-- Changes to the wrestling rooms in the two high schools.
The board knew about that last item, but Cullen said the total cost of the wrestling room changes was about $150,000, nowhere near $3.6 million.
A contingency fund of about $2 million was a part of the project, Pennington said. Contingency funds typically pay for unexpected expenses such as surprise asbestos or concrete work.
Cullen said the project included more than 100 change orders over the course of the project, from mid-2007 to completion in August 2009.
“When I hear ‘more than 100 different change orders,’ as a project manager, I go, ‘What went on with that?’” said board member Greg Ardrey, a senior project manager for Alliant Energy.
Ardrey called for an itemized list of the spending.
Stottler said she wants to know who authorized the final payment on the work.
“That will be something I’ll look into,” Pennington said.
Pennington said the referendum money was kept in its own fund, and he can trace the payments leaving that fund, but he has not found an actual project budget.
Cullen said he recalls the board asking more than once how the project was going and being told it was on time or ahead of schedule and at or near budget.
Those questions were most often answered at board meetings by Business Director Doug Bunton, who retired last June.
Stottler told Pennington that even though he was caught in a changing of the guard, it is his job to get to the bottom of this.
The board voted to postpone its final approval of the project—a vote required by board policy—until its meeting March 22.
The main contractor, J.P. Cullen & Sons, was scheduled to give a final report on March 22, but it wasn’t clear that would happen.
In other business
In other business Tuesday, the Janesville School Board:
-- Heard a proposal to expand the Challenge Program for academically talented students to third grade starting next September. Ruth Robinson, coordinator of programs for the talented and gifted, said the administration believes it can make the change without spending more money. The program now comprises fourth through eighth grades. The board asked for more information before making a decision.
-- Heard preliminary options for paying off a liability to the Wisconsin Retirement System. CFO Keith Pennington said he is seeing proposals from lenders and will present those to the board. Board member Tim Cullen said it would bother him if a financing package required a tax increase. Board member Kevin Murray said he could accept a tax increase if it would pay off the liability instead of the current situation, in which the district would continue paying for many decades with no end in sight because payments do not keep up with interest charges.
-- Met in closed session to discuss negotiations with the teachers union. No negotiations have occurred since last fall on a contract that expired July 1, 2009.

Sep 30, 2010 at 4:14 p.m.
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What else is new! Sometimes I wonder if our government, local, state, etc. do this on purpose. Come on, why don'
t they know where the money went to? Or do they?
Feb 26, 2010 at 10:53 a.m.
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whybesad: Please show me where I am making excuses for anything! I simply said that I believe that the number being reported (3.6 million) is not accurate and that we should wait for the final tallies before rushing to judgement. If you recall, I was the ONLY one who voted against the referendum. While it is tempting to jump all over this and say, "I told you so", I think it is more professional to get all of the facts first.
Sincerely,
Bill Sodemann
Feb 26, 2010 at 9:46 a.m.
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SURPRISE SURPRISE!! Some heads should roll for this blunder. Sodeman is making excuses 4 this blunder. Thanks goodness Mr. Cullen is in there finding out about this. We should all be mad this is OUR money!!!
Feb 26, 2010 at 8:22 a.m.
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Question. For those of you complaining about Cullen getting all the work and other contractors outside of our town or state for that matter not being allowed to get work. How many of you were deeply upset when GM was taken away and the work was given to others elsewhere? Hmmmm. That's right, careful what ya wish for. Wanting work to come from an outside source is not a smart plan for our community. Set aside the personal issues and think clear.
Feb 25, 2010 at 9:11 p.m.
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The Hedbergs built the Library and were not involved in the Marshall School pool. Your tax dollars built it. As I remember it was voted down but the school board thought it unfair to have pools at the two other middle schools and not this one. So they built it without a vote.
Feb 25, 2010 at 6:43 p.m.
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As a resident of Janesville for the past seven years, I have read lots of blogs regarding Janesville's teachers and their unfair demands. I'm starting to think that maybe they are being realistic and that the district is the one that is playing games. Condos being bought in Milwaukee, missing money in the budget, overspending on projects! What next?
Feb 25, 2010 at 5:30 p.m.
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Zippy, bidding on contracts is the only way to keep the contractors in check. If JPCullen is given free reign on the city of Janesville who is checking? So they are awarded free reign to complete multi-million dollar projects just cause they are here? What an easy way to keep your construction business going in hard economic times by having a free pass to do all of the construction work! What about all of the reputable construction companies that may have been able to save the city money? What about another construction company starting up in Janesville, would they be able to bid on projects or does JP have such a strong hold that they get the job and that's it?
No fair bidding = bad decisions
Feb 25, 2010 at 5:27 p.m.
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The school board should have known that there would be hidden cost that was not expected. But they should have been inform that the cost be more than was approve by the voters.
That is the reason I vote no on the ballot for the improvements. Now, with GM gone, and other businesses, the rest of us have to share the tax burden. And with fewer kids now, did they need to expand. I say no.
Feb 25, 2010 at 5:08 p.m.
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Cullen is a so called union contractor but any chance they get they sub out work to non union labor from diffent parts of the state to make a few more bucks for themselves, but after all they are a business and exist for the sole purpose of making a profit so I don't think they make to many money decisions because they like to be nice.
Feb 25, 2010 at 4:31 p.m.
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zippy - My background is accounting and I used to work for a union trade company for many years. JP was very hard to get extras paid for but they wanted them done and JP requested the change-order money from the owner of project and got it, only to keep it and not give us our share. I worked on multi-multi-million dollar projects too. Give me a little credit before you bash. (NOT false statements). BTW, how come the project wasn't open for bidding to general contractors. Once again, that company was just given a job. Nice.
Feb 25, 2010 at 4 p.m.
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dumbledorf - I understand the frustrations of the money going over, but why would anyone want the money to go to another town to build a project? What good would that do our community? The money should stay here.
Feb 25, 2010 at 3:41 p.m.
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I thought that the pool at Marshall was paid for by the Hedbergs?
Feb 25, 2010 at 3:17 p.m.
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Bigmike, you look really little with your snide childlike comment about my very true statement. Why do you feel the need to attack me? I suggest you wake up before you look even more foolish. If you want to battle wits with me, you will lose. I know what I am talking about. My personal and professional success is proof. Where is yours?!
Feb 25, 2010 at 3:11 p.m.
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These people are calling the residents of Janesville stupid to their faces.
YOU HAVE BEEN DUPED AND YOU HAVE NO CONTROL OVER IT AS LONG AS THESE PEOPLE ARE IN CONTROL! WE NEED A CHANGE.
Feb 25, 2010 at 3:01 p.m.
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The rich are getting richer. It's like letting the Fox in the hen house. The ice arena will be the same story.
Feb 25, 2010 at 2:58 p.m.
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$2.5 for an Ice arena and $3.6 (over run) for a field house: how many professional athletes are coming from Janesville?
Feb 25, 2010 at 2:52 p.m.
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Zippy, what about fair bidding? Who's to say a contractor from another town couldn't come in and stick to the contract and still provide a good service? The city of Janesville doesn't even allow them to bid on the projects!!!! They just choose to use Cullen because of the ties to the community/council etc. and the timeline for projects???? Give me a break!
Feb 25, 2010 at 2:23 p.m.
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So Swiss Chick what is your construction back ground? Do you have any idea what goes into a major project? These were huge jobs and there is no way ANYONE could forsee some of the issues that arose-- JPC has and always will continue to support their community and would not take advantage of the taxpayers. Maybe you should consider what can happen if a Contractor from out of town would come into Janesville-- they aren't going to care about saving a dime because the don't have any ties to the Community- think before you make FALSE comments
Feb 25, 2010 at 11:49 a.m.
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"The death spiral of Janesville continues and we all continue to watch and wonder. What a shame and what a joke things have become in Janesville."
Laugh youself all the way out of town if you don't mind. We won't miss you.
Feb 25, 2010 at 11:37 a.m.
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SouthsideNancy
Feb 25, 2010 at 9:58 a.m.
Suggest removal I believe it is the tax payers fault. How can people keep falling for the socialist/progressive agenda that it is a better way of life to have a large Government control, and than more self reliance on your own judgement.
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HUH!?
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Hey Nancy, turn Rush off for a minute and listen. You might not like Washington D.C. right now but to call a REFERENDUM voted YES by the citizens Socialist...ARE YOU NUTZ?
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It is a shame the $$ went over and the district failed to be honest with the people paying the bills. THE GOOD NEWS, most involved with those decisions are gone. The new administration had nothing to very little to do with the referendum.
Feb 25, 2010 at 11:37 a.m.
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So, they had a $2 million contingency fund for overages set aside. That seems reasonable. So why didn't they have a contingency for cutting out the least desired improvements when the overages exhausted the funds? Apparently that was never considered. And who signed the checks for the extra payments? No one seems to know? They need to investigate to find that out? And then to add insult to injury, they'll probably have to raise taxes to cover the generous retirement benefits for a "job well done" by this crew?
So, are the students learning better now due to all the new and even more expensive than expected bricks and mortar?
Feb 25, 2010 at 11:33 a.m.
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Must have taken a lesson or two from Arthur Anderson.
Feb 25, 2010 at 10:42 a.m.
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Fully agree with spending money on education! What I don't agree is the way the money was handled. I voted yes for the money, not to exceed the money! Taking away certain programs, not telling the taxpayers, all of this shady dealing being done behind our backs!??? Is this for real? Are we (tax payers) going to sit here and do nothing about this because it has been common in the past? And yes I believe someone has to face the fire for this, this should not be tolerated and the citizens of Janesville need to stand up and fight this until we get answers. No more of this buddy system in the Janesville area, "You don't have enough money for the project...well let's just steal the money from different programs or cut this and that and move money here and there..." are you KIDDING ME? Sounds like someone in the city of Janesville should go work for AIG and some of the big banks that have been ripping off the American taxpayers for years! They would be a perfect fit......thieves. I sure hope that the city council, the school board, JPCullen and whoever was involved with this project will have a meeting. And I sure hope that more than the usual 12 people that attend these meetings will show up. A lot of questions need to be answered and I sure hope that the taxpayers of Janesville feel as though someone put their hand in their wallet and yanked out the remaining money that we all desperately need to survive in todays economy.
I sure hope that the citizens look real hard at what is going on with the "other" special project that the city is getting their hands in....the infamous "Ice Arena" debacle. How can the new city manager claim that he has no special intrest in the ice arena when the very first interview the Gazette did with him he stated that he is involved with hockey and his kids play it. In my opinion that is already a conflict of intrest. If I were the city manager I would put the kibash to this potentially career damaging fiasco! We are all going to sit back and let the city council spend $10,000 to do a study to see if the public wants the arena???? Are you kidding me? Put an online poll on the gazettextra and there is your answer! If you don't have access to the internet in your own home, go to the library!
That a city council member would actually propose that the city just give $2 million to the club and "wipe our hands" of this is RIDICULOUS! These are the people that we have voted to run our city and make rational decisions? Are you kidding?!! I cannot believe that there are not more people complaining about what is going on?
The city council and the school board need to fess up on all of the screw ups lately. Stand up new manager and do your job.....don't let the "usual" business in Janesville go on anymore. "How is the project going?" "Oh everything is fine, cool, let's talk about letting residents keep chickens in their backyards"....much easier to deal with.
Feb 25, 2010 at 10:37 a.m.
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A CFO doesn't know "where the money went"!?!!?!?!?!? A 2-year Associates in Accounting could keep better books than that. Geez. Hire me. -Oh wait, if it had been me, I'd have been fired for mismanagement of funds.
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By the way, wouldn't the change-orders have to be approved by the board?? So, why the surprise? I don't get it.
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JP has a reputation of going in low and skirting numbers later in the form of change-orders and then they are charged on a T&M basis, which is higher than included in the original bid.
Feb 25, 2010 at 10:29 a.m.
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Maybe there was just a simple misunderstanding with decimal places?
Feb 25, 2010 at 10:27 a.m.
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This story is just another example of poor leadership, lack of accountability and reckless deficit spending that goes on in our once great city. We should of never spent the money on these projects. The schools and students would of survived! I am sure JP Cullen and the rest of the industry insiders all got their money!
The death spiral of Janesville continues and we all continue to watch and wonder. What a shame and what a joke things have become in Janesville.
Feb 25, 2010 at 10:05 a.m.
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I am sure anytime you do additions/rennovations there are things that arise that would be different than a new construction where everything is new. Connecting new stuff to old stuff sometimes doesn't go as planned.
This project created good jobs for 3 years for those who worked on it. The schools are amazing and something Janesville should be proud of. Even with the over runs, they were a bargain. They cost what they cost to get done. The kids that go to Parker and Craig right now are proud of their school and I firmly believe that these additions will make a huge difference in the quality of education they receive. You can't get to the end of a job and say that the money is gone so we stop.
I've stated before..this is business as usual in Janesville. Yes the taxes are high, yes the housing market is in the tank, yes we have high unemployment, but those of us who love it, wouldn't live anywhere else. If you don't like it, move. If you don't like the direction Janesville is headed than see you later. We won't be sad to see you whiners go. Money invested in our youth is never wasted. NEVER. Bring on another referendum that asks for investment in our youth and I'm voting yes everytime.
Feb 25, 2010 at 10:01 a.m.
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I can say for a fact that the school district had to approve all change orders- so look to your District-- not the contractor. Until you have gone into an existing building to make changes you have no idea what can be exposed and need to be repaired. There are always unforseen conditions that are not noticed at bid time. JPC did their part in keeping the costs as low as they could and always looked for alternatives for costly items-- never mind the time and materials they donated. So-- when looking to blame the contractor-- think again
Feb 25, 2010 at 9:44 a.m.
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Who was communicating with JP Cullen's project manager?
A good project manager should be keeping track of resources, cost, etc...prior to the project and ongoing throughtout the project therefore when something like this happens and the deliverables are not met with initial budget executive sponsors (who are the descision makers) should be notified.
So Lori is right...the question is who signed off to extend the budget so the deliverable can be met? And who was the PM on the district's side?
Accountability.
But most importantly how do we prevent something like this happening in the future because the damage is done.
Feb 25, 2010 at 8:43 a.m.
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The field house is amazing and the knowledge our children will gain there is priceless. Why last week I saw one of the pom girls dancing like a stripper during the girls basketball game, this young ladies experiences, in the field house, will only help in her job search with Hooters and Diamond Jims.
Really, she may be the only athlete to go on and make money in her sport(pom is a sport). I know this post will be removed by managment but for all of you who read it; how many student athletes will go on to earn money doing what they did in our field house?
Feb 25, 2010 at 8:17 a.m.
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Wow, and no one is bashing the teachers and/or blaming the teachers for this! Surprising!! The district is able to take this money in the Fund 10 balance, that was supplied by teachers from the extra money from the health care; but they dont care enough to try and settle a contract!
Feb 25, 2010 at 7:17 a.m.
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Blue collar workers do see the value in a good education system. We are also the same people that don't spend money we don't have. If you go to the store for grocery's with a $100 in your bank account you don't spend a $150 do you? No, then the check bounces and you get a NSF from the bank. It's all about not spending more than you have!
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Perhaps if you want to make excuses for the district you should cut a 3.6 million dollar check from your "white" collar job to cover the overages, then the "blue" collar people will stop complaining. If not either, move as you intend to do or STFU!
Feb 25, 2010 at 7:05 a.m.
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I can't wait to move to a district that actually cares about its school district. Most of you blue collar workers can't see the value in a good school system and all you do is bash them. What would you have proposed the district done? In the grand scheme of things what will this actually cost taxpayers? A few bucks a year for 10 years. Get over it. If the referendum would have went the way most of you probably voted nothing would have been spent and we'd be facing this same thing 5 years from now at 90 million. What is 3.6 when we needed 73 anyway? Rather than finding a solution to the problem you all want to see heads roll.
Feb 25, 2010 at 4:48 a.m.
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Should heads roll? You betcha
Will heads roll ? He*l no !
Feb 24, 2010 at 8:51 p.m.
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As someone who was the lone vote against the referendum, it would be easy for me to jump all over this and say, "I told you so", etc. While the final costs will come in over budget and explanations will need to given and reviewed, I am almost certain the amount that is being reported (3.6 million) is not accurate. With all due respect to my fellow board member, Tim Cullen, I think his calculations are high by at least 1 million and perhaps more. Let's wait for the final numbers and reports to come in and then respond appropriately.
Sincerely,
Bill Sodemann
Feb 24, 2010 at 7:39 p.m.
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Same song, 3rd or 4th verse, more unauthorized spending, a whole lot worse!!
1. Marshall Middle School - $13 Million to build school, pool's $1 Million does not pass but magically the School board found $1 Million to build the pool.
2. Original referendum to expand 5 elementary and Craig and Parker HS -- $63 Million -- Voted down twice.
3. Revised referendum for the 5 elementary schools was $13 Million and Passed.
4. Two years later, Referendum for Craig and Parker started at $78 Million - failed. Revised down to $72-73 Million - Passed.
5. If you started with $63 Million, did $13 Million for elementary schools, the $63M - $13M = $50 for Craig and Parker. How did what should have been $50-$55 Million go to $78 Million???
The school board and administration have absolutley no credibility at all. I feel the previous Supt. and Financial CFO probably are responsible for these over expenditures. But they have already retired/left.
I would like to think that this is unbelievable or could not happen, but then reality sets in that this did happen.
Scool Board and Administation: Please remember one very important concept: "IT ISN'T YOUR MONEY"
Feb 24, 2010 at 7:08 p.m.
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Pennington went into the meeting unprepared. Where was the representative from JP Cullen to help answer questions. Why didn't Pennington know who signed off on the final payment - that payment was made after school was opened and he was the only one authorized to sign it. Why didn't he have any research to back up his numbers? Lack of preparation makes for a poor presentation.
Feb 24, 2010 at 6:49 p.m.
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Pennington should be fired. Cullen is right this is unacceptable. Question is, who's head is gonna roll over it so that it doesn't happen again. The interest money belongs to the taxpayers, not to the damn school system so that they can buy more toys. If there have to be budget cuts next year, then take it out of the administrators hides and if they don't like it then too bad, they can quit and see if they can get another job. Again, Pennington should be fired, and there needs to be an investigation to see if anyone else needs to be fired as well.
Feb 24, 2010 at 5:36 p.m.
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malky15 is 100% correct.
Change orders can be a farce.
And yes they can be controlled by stating in the contract that all CO's over a certain amount (i.e. $1000) must be approved by the board, or one of it's desiginated members.
This is plain and simple robbery to the taxpayers.
Feb 24, 2010 at 5:16 p.m.
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What concrete work would have been unforseen?
Just because we received $2 million in interest on referendun borrowed funds; does not mean they can spend it any way he feels. (without approval)
That's a lot of asbestos removal! (give details of sq. ft.) Code upgarades! (Vague!)Equipment and furnishings not in original plans. (Why?) (Pennington stated that other district purchases of equipment were cancelled to pay for the overages.... and then states that part of the overages were for equipment and furnishings)
Was the Craig HVAC not operational before the project?(Why)
MAYBE it should have gone out to BIDS !!!... not just pick JP Cullen and Sons because "they are familiar with the District" and can "rein in the costs" It's "reining" $$$$$$ on Delavan Drive!
Feb 24, 2010 at 5:11 p.m.
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Change orders can kill any budget in a big hurry. But the city has no control over it, neither does the county. Counties have been screaming about this for ages but the construction lobby kills it. The council definiely should have been informed and all change orders approved throught them.
Feb 24, 2010 at 4:38 p.m.
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boy does this sound familiar, remember when the Marshall was built, the referendom did not include money for swimming pools, there was not enough money, they built the pools anyway, and SURPRISE, SURPRISE, SURPRISE!!!! THEY WENT WAY OVER BUDGET, with the job market the way it is and Janesville losing a very big of its tax base how in the name that is all holy can they justify this?
Feb 24, 2010 at 4:32 p.m.
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This is infuriating. I know a lot of people slag public officials for this or that slip-up, but this really is serious and the board should be blowing their tops. A 5% overage may make sense in every individual item but at the very least the board should have been informed as these issues arose. Considering the time that was spent debating the wrestling room changes that were about 1/20th of this total cost, the other 19/20ths of it needed to be part of the discussion.
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Granted, the personnel turnover is probably a signficant factor, but if there had been a more organized process going in the new people would be in a better position to continue it.
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