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Cost Overrun in Vermont Construction Projects

Lawmakers are looking for ways to reign in cost overruns in state construction projects.

MONTPELIER, Vt. - Construction costs in Montpelier have the department of building and general services looking to the statehouse for more funding.

The Montpelier district heat plant project already has $12 million in state funding set aside but it needs another $2.5 million.

“That's a position BGS doesn't want to be in. We certainly don't want to be in,” Senate Committee on Institutions chair Peg Flory said.

Tuesday Flory and the rest of the committee approved budget adjustments for capital construction projects. That’s money Vermont borrows from lenders and pays back with tax dollars.

BGS is roughly $4 million over its capital budget for fiscal year 2015. The department was appropriated $45,742,126 originally and now needs $49,726,157.

BGS commissioner Mike Obuchowski says they're managing cost overrun as best they can, pointing out projects in Berlin and Waterbury that are on budget.

“I think it's working quite well,” Obuchowski said.

 Other projects are causing the capital budget to rise. BGS also receives capital dollars earmarked for other state departments that need projects completed. Security installations in several Vermont prisons and on kitchen remodeling cost an extra $800,000. Other projects for the Agency of Natural Resources, Fish and Wildlife and the Agency of Agriculture are adding millions more.

Lawmakers want to start knowing about these costs before they get out of hand. That's why they're forming a special committee to look over the Waterbury State Office Complex. If the project costs go above five percent ($6.25 million) of the original project cost then the committee members would have to be notified before additional funding could be granted.

“We want to make sure we're spending our capital dollars wisely,” State Sen. Flory said.

BGS and lawmakers are also want to do more cost analysis ahead of future projects as a way to manage taxpayer dollars from the start.

Those dollars are likely to shrink in the coming years anyways. A committee on debt management has already indicated the amount of borrowing from the state needs to decrease in FY 2016.

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