Budget Adjustments Explained


In December 2019, the AHS Building Committee made a number of changes to the project design to bring the estimated cost in line with the project budget. This blog discusses these changes and their rationale. To best understand all the decisions that were made by the Building Committee, it is helpful to look at the process and decision sequence that was followed. Once certain decisions were made, others were inevitable because of the need to balance the project budget.

The Process: Value Engineering

Value engineering (VE) is an exercise required by the MSBA. At each cost estimating stage of the project, design-based estimates are created and compared to the budget. All items are scrutinized for value vs. cost. To allow for the most thoughtful discussion, the Building Committee prepared for the VE discussion in advance of getting actual estimate numbers. 

Over the months between September and December 2019, the Building Committee grappled with the many aspects of value engineering. Briefly, the Committee began in September with an initial discussion of the VE process, and the design team was asked to proactively create suggestions of possible VE items. These could involve changes in materials, design or project scope. Later, VE possibilities were assigned to subcommittees for review. These subcommittees reported back to the main Committee about potential VE items, having ranked them as A (recommended), B (recommended with reservations), C (not recommended), or D (rejected). To make their recommendations, subcommittees looked at the impact of changes to the project, examining the potential effect on the educational program as well as to building appearance and functionality. These recommendations were then discussed at full Building Committee meetings on December 3rd, 9th and 10th. 

The Budget Gap

The initial Design Development (DD) estimate was shared with the Committee on November 19th. Further reconciliation presented on December 9th gave a refined estimate of $259.9M vs. the construction project budget of $235.2M, a difference of $24.7M.

Among other contributing factors, the main source of the difference was the estimate for HVAC (Heating, Ventilation and Air Conditioning). Over the past year, Boston’s construction market has heated up and increased competition between projects has led to significantly higher than expected prices for HVAC. Because the DD estimate was higher than the approved project budget, this meant the Building Committee needed to make changes to the project to bring the estimate into line with the project budget.

Making Difficult Decisions

The decisions themselves were made in four main parts. First, a number of straightforward VE items were discussed on November 19th. All those that had been listed as recommended by the subcommittees were accepted as changes. These included items such as alterations to mechanical systems, changes to exterior materials, and removal of new athletic field light poles (though wiring and pole foundations were retained). These changes totaled $3.7M.

The second part was the review of the additional subcommittee recommendations over the course of meetings in early December. Recommendations fell into two loose categories: acceptable to all, or challenged by one or more members of the Committee. Challenged VE items were listed to be considered separately when final decisions were made, with voting scheduled for December 18th.

The third part consisted of the geothermal wells. The impact of changing the number of geothermal wells was also reviewed over the course of several meetings. At a potential cost of $7.7M, the geothermal wells overshadowed other VE items being considered (with max value $1.8M). On December 3rd, the Committee requested the design team to prepare three VE alternatives: one including all geothermal wells (as originally designed) one including geothermal wells only to supply both classroom wings (saving $4.8M), and one removing all geothermal wells from the project (saving $7.7M). These VE alternatives made clear that significant project changes would be necessary if all wells were included. The Committee also received a life-cycle cost estimate which showed there was little difference in total project energy consumption (or carbon production) even if geothermal wells were reduced or eliminated. At the December 10th meeting, the Committee opted to review only VE options that retained some, or none, of the geothermal wells.

The fourth part was on December 18th, when final decisions were made. The Committee began with geothermal wells. After review of the life-cycle cost analysis and discussion of mechanical alternatives to geothermal wells, the Committee voted to reduce the number of wells to 130, the amount needed to heat and cool both classroom wings. This change saved about $4.8M. 

Next, the school administration reported on remaining VE items and gave their recommendations based on educational impact. They recommended retaining the new artificial turf athletic fields (to allow extended seasons and additional availability in poor weather), the black box catwalk, auditorium audio visual, and full tiling of bathroom walls. 

After hearing these recommendations, the Committee went through the “no objection” list of VE items by category, approving a total of $17.9M in changes. This left a remaining gap between design and budget of $2.9M. 

The Committee next opted to discuss the new artificial turf fields ($1.8M), the east pedestrian ramp and stairs ($867k), and the Minuteman bike path connection ($693k) together. These three were the biggest ticket items remaining, and their inclusion or exclusion in the project would automatically dictate available funds for remaining VE items. The Committee again had vigorous discussion about the benefits and trade-offs of all three items. Votes were then taken, starting with the new artificial turf fields. These were voted to remain in the project although the vote was split, 11 to 4. The retention of the new artificial turf fields, their price and the magnitude of the budget gap meant that almost all other VE items under discussion would have to be accepted. Votes to change or remove the remaining VE items were then taken, including removal of the east pedestrian ramp, bike path connection, and more. At the end of the evening, the Building Committee had achieved a final project design that matched the project budget.

Considered but rejected

Not mentioned above are additional VE items that were considered along the way but rejected for various reasons. These included removing either the district administration or the preschool from the project (rejected because of lack of alternate space and lack of savings), reductions to the number of classrooms (rejected because of enrollment), changes to square footage of central spine (rejected because of encroachment on educational spaces), and changes to construction phasing (rejected because of high impact on students and little cost savings). All of these items and more were discussed at length over the course of the VE process.


In summary, the Building Committee followed a thoughtful path over the past four months during the VE process. A wide variety of changes to the project were considered, encompassing items with potential savings ranging from $6k to $7.7M. The Committee made the difficult decisions after significant deliberation and is pleased to maintain a building that is educationally exceptional but still meets the assigned project budget despite the challenges of today’s building climate. Next comes the start of site work, as well as continued design development with fleshing out of building details. 

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