HURLOCK — The project to construct a new Hurlock police station inched along for the past couple of years but the nearly $1.7 million project took a giant step forward at the Feb. 11 council meeting. In August 2011 the council authorized architects Crosby and Associates to provide planning, programming, schematic design and cost analysis for a public safety/police center in Hurlock.

In October 2011 architect Tim Crosby presented a study and schematic design for the new public safety building. An Open House in 2012 with the architect, a lender, and town officials graphically demonstrated the deficiencies of the current building.

By last fall, after Mayor Joyce Spratt and the Council chose Hebron Savings Bank as their lender of choice, proposals could be solicited. Hebron’s loan pays for construction and is repaid after construction with a pre-approved USDA loan. According to Mr. Crosby, the 3.125 percent interest rate obtained in 2011 by the town is “the lowest interest that USDA has ever given. Current rates are 4.45 percent.

At the recent council meeting Mr. Crosby reported that general contractors Harper & Sons, Inc. of Easton submitted the low bid of $1,336,761. The contractor was then asked to review the building, a procedure known as “value engineering,” and see if there was anywhere to reduce the cost. The contractor said the building was very efficiently designed and contained nothing that would be considered “gilding the lily.” The few changes resulted in a $37,000 reduction.

As the ultimate mortgage holder, the USDA requires Hurlock to allocate 8 percent of the low bid for unexpected additional costs, or contingencies. That amounts to $107,000. But, Mr. Crosby noted, “The rule is if you don’t spend it you don’t borrow it.” The loan also requires an on-site inspector to be hired by the town. That cost is $65,000. Money already paid for architecture and engineering costs was $115,000.

Three prefabricated steel cells will be constructed offsite and installed with a crane. Their cost will be $39,000 each, totaling $117,000.

A performance and payment bond is also required in case the contractor cannot finish the job. The cost of construction, performance bond, prefab cells, and an on-site inspector totals $1,698,701. The council must decide: First, to approve the construction contract; second, look at costs and decide which costs you’d like to include in the mortgage vs which should be paid with existing funds. Borrowing $1.4 million requires monthly payments of $5,110; if borrowing $1.65 million, then payments would be $6,026 monthly.

“When we started this process in 2011,” said Mr. Crosby, “it was a whole different world of finances than we’re seeing today. On our projects we’re seeing the costs spiral significantly. Those planned a year or two ago are coming in today 20 percent higher.” He explained the general contractors are busy but the subcontractors are very busy. “From 2008 to 2011 we lost 40 percent of all of the subs who were in business in 2008,” he explained. “They are reluctant to hire new people and being very selective about the jobs they take on. Now is the best time and the prices are only going to go up in the next 12-18 months.” He added that 90 percent of the subcontractors will be local.

He suggested that “Anything that you would call equipment or fee, if you can afford it, I would not put that in a mortgage.” Mr. Crosby recommended three items to include in the loan: Construction, contingency, and the three cells.

The heating and cooling system is all geothermal, explained Mr. Crosby. “The savings from that is really significant. Lighting inside is LED which is 10 times the amount of light and 1/10th the cost. It is a very energy conscious design.”

Following Town Administrator John Avery’s recommendation that the financial piece of the construction be delayed until “we actually see where we are on that.” He felt it would a “wrong decision to limit yourselves at this point.”

The council unanimously approved Harper & Sons, Inc. to be the general contractor for the new police station with financial decisions made at a later date.