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0 of 3 Premium Clicks used this month SUBSCRIBE Print + Online Subscriber Activation | Register x Forgot Password | Need an Account? e-edition | subscribe | newsletter | deals Classifieds Jobs Autos Real Estate FEATURED » NEWS NOW Our View: Governor should not try to tilt LNG process ... From the Council: Have a safe, fun Halloween ... Guest Opinion: The other side of the fire station story ... Our View: Governor should not try to tilt LNG process ... From the Council: Have a safe, fun Halloween ... Guest Opinion: The other side of the fire station story ... SINCE YOU ASKED Since You Asked: Who should pay for the police/fire station cost overruns? Comment MailTribune.com Writer Posted Oct. 24, 2015 at 12:01 AM Posted Oct. 24, 2015 at 12:01 AM » Social News In regards to the police and fire station construction in Medford, I carefully read what I think was the second article about the situation, and it very clearly said that the contractors had repeatedly said it would be a very specific budget. Later, the contractor claimed extra costs due to rising prices from subcontractors. Doesn’t that fall on the contractor to suffer the loss rather than the customer, which is the city? — Caryl, Medford You’re not the only one wondering what happened, Caryl. A few city councilors were caught off guard by the $6 million cost overrun at the police and fire stations. We’ll try to explain everything as best as we can without getting too much into the weeds. Since the city first began working with Adroit Construction Co. and Ogden, Roemer Wilkerson Architecture, there has been much talk about a “guaranteed maximum price.” Unfortunately, the city didn’t really lock in this guaranteed maximum price soon enough. In fact, the city began building the foundation and structural steel for the new police headquarters earlier this year before it locked in bids on the remainder of the project. During the design phase in 2013, the council received assurances that a collaborative arrangement with the architect, the contractor and the city would help contain costs and achieve a guaranteed maximum price. However, the city has relied on cost estimates for the past three years and only recently received firm bids on the projects, even though the police station construction is well under way. In September, three years after working with the contractor and architect, the “guaranteed maximum price” for the police station was given as $23.75 million, about 8 percent over the $22 million in bond proceeds available to pay for the project. That leaves about a $1.7 million shortfall — not including an extra $900,000 for a police parking garage facade. The council dropped the façade, and the contractor and architect pared back some features of the project so the cost overrun is now less than $1 million. The fire stations' “guaranteed maximum price” was $14 million, about 32 percent over bond proceeds of $10.6 million, creating an almost $3.4 million shortfall. The council has indicated it may only build two fire stations instead of three, but there is some concern there may not be enough to even build two. However, the idea of a “guaranteed maximum price” has been misunderstood, according to the contractor. The guaranteed price comes only at the end of the design phase of a project, just before construction. To answer your question, Caryl, the contractor is only on the hook once the guaranteed maximum price is locked in. Unfortunately, the city took a lot longer to get to that point than anyone imagined. Send questions to “Since You Asked,” Mail Tribune Newsroom, P.O. Box 1108, Medford, OR 97501; by fax to 541-776-4376; or by email to [email protected] . To see a collection of columns, go to mailtribune.com/youasked . We’re sorry, but the volume of questions received prevents us from answering all of them. MailTribune.com Writer Posted Oct. 24, 2015 at 12:01 AM » Comment or view comments Reader Reaction » STAY INFORMED Email NewsLetter Sign Up Today Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. Southern Oregon Directory Featured Businesses Loading... 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