The time has finally come. Your city administration is ready to consider building the new station that your department desperately needs. Now, the city manager is asking for an estimated budget of what it’s going to cost. Where do you start? How do you explain your needs without giving him sticker shock? It is vital to present a realistic number that you and the city can work with.
Project vs. construction costs
When creating your budget, consider the total “project cost,” not just the “construction cost.” In the construction industry, project costs are discussed in terms of hard costs and soft costs. Hard costs include the cost of materials and labor associated with the building of the new station. The construction budget is comprised of hard costs.
Soft costs contain a variety of other expenses, including design fees, site costs, management fees, legal fees, insurance and administrative costs. Also included in soft cost are all of the furniture, fixtures and equipment needed to outfit the station. If you are replacing an existing station, your soft costs may include relocation fees, like moving vans or temporary facilities. Too frequently the soft costs are overlooked when discussing the cost of a new station, resulting in under-planning for the budget.
Additionally, with the construction budget, it is important to add a contingency fund to the project cost. Even the best-planned projects encounter additional costs during construction. These costs may be associated with unforeseen conditions or even be from a few owner-added items that were not considered during the planning stage. It is typically recommended that the contingency for new construction be 5 percent of the construction budget. The contingency will act as a slough fund to cover any unexpected costs that may arise during construction. Typically, renovation projects need a higher percentage of contingency due to unknowns that may be found hidden in the existing structure. Some people also recommend adding a small contingency to the soft costs to cover any additional changes or services required during design. The project cost represents the summation of hard costs and soft costs, including any contingency funds you may add.
Unfortunately, construction costs will vary over time depending on current costs of materials, fuel and labor, which can make planning difficult. The timing of a project can significantly affect cost, as the price of material and labor directly relate to availability. If the market is flooded with construction projects, the availability of products and labor is limited, increasing the cost of construction. Conversely, a shortage of construction projects creates competitive pricing. Understanding ideal times to release projects for bid will result in more competitive bids and the best return on investment.
The size of your project will also affect the cost per square foot. Smaller projects actually cost more per square foot than larger projects, as they still include the same mobilization and overhead fees as the larger projects and because material costs tend to run higher with smaller quantities. Identifying factors that influence the building costs will help you better prepare your budget.
Available resources
If this all seems overwhelming, don’t worry, help is out there. Architectural firms offer services, such as those related to facilities programming and feasibility studies. These studies can help your department determine what spaces your new station needs in order to get a general square footage of your building. Included with this study is a “statement of probable cost,” which will be a cost-per-square-foot based on current construction costs.
When researching construction costs, there are resources available, such as construction magazines and websites like Design Cost Data (dcd.com), which can help with conceptual square foot cost estimating. Calling other departments in your area is also a great resource. Remember to inquire about both construction costs and projects costs associated with their station. There is a strong network among fire departments. Use it and learn from others’ experiences.
Budget maintenance
We recommend that you hire an experienced fire station design professional to help guide you through the process in order to make sure you start your project on the right foot. However, if you decide to go at it alone, keep in mind that your station is not a residential home, nor is it simply a garage. Your fire station is a 24-hour commercial facility that protects the community and the building costs will reflect that function.
Once design on your station has commenced, it is your architect’s responsibility to help you maintain the budget. However, there are a few key strategies that you can keep in mind to help oversee the project cost. For one, know that a simple building form will have a lower cost. Although your building should have visual appeal and meet your city’s design standards, keep in mind that every corner or roof change costs additional money. A good architect will design a form that balances your budget, community image, and the function of your station. Your architect should employ simple cost-cutting strategies in the floor plan itself. For example, locating all of the restrooms together will cut down on plumbing. Having walls and corridors that align decreases structural and framing costs. Making sure that your exterior walls are dimensioned to meet masonry modules save material and labor costs.
Your architect should provide you with several statements of probable cost throughout design, each one increasing in detail. When you receive these statements, openly discuss them with the architect. Are they using local materials? Where are the fixtures coming from? Items coming from overseas are going to raise the construction cost. Discuss long-term maintenance costs. What light bulbs are being used in your fixtures, and can you buy replacements at a local hardware store or will you have to special order replacements? It may be better to use LED fixtures in areas that are hard to access and fluorescent ones in areas where they can be easily replaced. Though it is important to never skimp on HVAC systems, keep in mind the type of service providers available in your area. Large commercial systems initially cost more but are more efficient; however, if no one in your immediate area services them, the HVAC in your station may be down for a week or more. We typically use a Split Direct Expansion Air Conditioning system. Bottom line: This is an important topic to discuss with your architect.
Working as a team with your architect and being well-informed of the current design and budget status are keys to a successful project. We find that one simple cost-saving measure is for the fire department to separately purchase equipment for the station that the contractor then installs. Oftentimes the department can utilize grants or donations from local business to purchase items like dishwashers, gear lockers, extractors and generators. By making appliances and some of the equipment “owner-purchased, contractor-installed,” the contractor overhead costs will be avoided.
During design of one recent project, we knew the project scope and budget where not aligning. We discussed it with our clients and decided to present a few different cost-saving options at the city council meeting. Due to the historic area, many extra exterior details had been added to help the station blend with its surroundings. Because of the craftsmanship required to construct, these extras where an obvious cut. However, when presented at the council meeting, a local historical society in attendance decided that they would donate funds to the department to help preserve the original historic details. By openly tackling the budget together, we were able to tap into unknown resources and maintain an award-winning design.
Be open about your budget with your design professional. It is the architect’s responsibility to provide a station for you to meet all of your department’s needs within the budget you have set. Be upfront with what you need versus what you want. If there is concern that an item may cost too much, discuss with your design team the possibility of making this item an “alternate.” Alternates are items identified as possible additions or deductions from the construction documents. These alternates will be itemized separately in the bids for consideration to be included or excluded from the project. These changes to the scope of work can be as simple as switching out certain finishes and fixtures, or as complicated as removing bedrooms and reducing square footage. Alternates offer flexibility once the bids are received and a contractor is chosen, because you are allowed to select which combination of alternates to proceed with to maintain your budget. However, try to keep the number of alternates to a minimum, as they complicate the bidding process and may dissuade some contractors from bidding.
If a project comes in over-bid, there are usually opportunities to “value engineer” with the contractor to cut costs and realign the scope and budget without having to re-bid. Unfortunately, this is not true “value engineering,” and you generally will not receive sufficient compensation for the cuts you make to the project. Change orders, which are changes to the contract during construction, frequently contain inflated costs. Careful planning and drawing coordination during design can minimize the need for change orders. If there is something that you want but are unsure about adding to the project, discuss it with your architect. The later changes are made, the more they will cost you.
In sum
All in all, it is important to start your project with realistic expectations. Research and careful planning at the inception of the project are critical to its success. Clear communication with your city administration and the citizens will help ensure community support as well.
Develop a list of priorities so that you can work effectively, as a team, with your architect and community members during design to maintain your budget and ensure that you are receiving the best facility for your city and department. Coordinate the timing of your project bidding. Avoid bidding during the holidays or during construction of large projects in the area. Preplan with a contingency during construction and continue to work with your architect and contractor as a team to problem-solve when issues arise during construction, coming up with creative solutions which meet budgetary and project needs.
Never cut cost when it comes to the safety and welfare of your staff and community. Your station is not only housing some of the most expensive equipment that the city owns but also your local heroes. Your community wants to support you, so tap into any local support you can find. You have waited a long time to get this project started, so make sure it gets done right.
