LOWELL — The Massachusetts School Building Authority cut a check for $10,594,239 to the city of Lowell in March.
The money represents a partial reimbursement of supplemental funding that was approved for school building projects across the commonwealth in the fiscal 2024 state budget signed last August. Lowell’s share came to almost $37 million.
“On behalf of State Treasurer Deborah Goldberg, MSBA Chief Executive Officer James MacDonald, MSBA Executive Director Mary Pichetti and the MSBA Board of Directors, we are pleased to provide you with this reimbursement, and we look forward to continuing to work with you on the completion of the Project,” said a notification of payment email from the MSBA obtained by The Sun.
In 2019, the MSBA voted to commit $210 million to Lowell’s then-$344 million project.
The rebuild and renovation started in 2020 with the demolition of the doctors’ offices at 75 Arcand Drive, now home to the Riddick Athletic Center.
In March 2022, representatives from Suffolk Construction and Skanska told the City Council that construction costs were going to be higher from supply-chain increases due to COVID.
On average, steel went up 139%, curtainwall by 38% and drywall by 24%. Those budget overruns raised the project to its current $381 million cost, with the $38.5 million difference the responsibility of the city and its taxpayers. City councilors have long argued the unexpected costs should be the responsibility of the state.
State Sen. Ed Kennedy filed legislation to address the issue in January 2023.
“There are a lot of communities who went to the MSBA and got funding to move ahead with their project,” Kennedy said at the time. “They found out later that the building material costs had skyrocketed, and had raised the price.”
In addition to Lowell, other communities were over their MSBA-approved budget funding, such as Groton at $16 million, Stoneham at $19 million and Somerville at $30 million.
The MSBA uses the School Modernization and Reconstruction Trust Fund to fund school building projects, which in turn is funded by taking one penny from every sales transaction in the commonwealth. The Massachusetts sales tax is 6.25%.
But the funding for Kennedy’s bill came from revenue generated by the Fair Share Amendment, also known as the “millionaire’s tax.” Passed by voters in the last state election, these funds are dedicated to transportation and public education.
The legislation included 30 school projects estimated to receive approximately $270 million in additional grants based on increased funding limits from the MSBA.
The supplemental funding was approved by the MSBA’s Board of Directors in October 2023.
Skanska Project Manager Jim Dowd told the School Building Committee in February that the MSBA increased its maximum facilities grant for the almost $400 million project.
“The potential for the maximum facilities grant went from $215 million to $252 million, which is a total increase of $36.9 million,” he said.
Some of that money is against the construction contingency funding, which may not be spent, thereby limiting the remaining $1.5 million overrun burden on the taxpayers of Lowell.
A construction contingency is money set aside to pay for change orders from new requests or unforeseen construction requirements, and that amount of $21.2 million is built into the overall budget figures.
As of February, the remaining funds in the contingency account were $17.2 million.
“There have been 18 change orders to date totaling $3.9 million,” Dowd told the committee.
The Executive Office of Education will transfer additional funds to the MSBA in April and June, which in turn will disburse remaining funds to the city.
Kennedy is a member of the School Building Committee and City Manager Tom Golden publicly thanked him for his legislation during the February meeting.
“Thank you to Senator Kennedy for spearheading this, and the representatives for making sure it got through on the House side,” he said. State Reps. Vanna Howard and Rodney Elliott also sit on the committee.
“We’re very, very thankful for these additional funds that you shepherded through,” Golden said. “Senator Kennedy, on behalf of the entire city of Lowell and the City Council, I want to say thank you very much.”
Melanie Gilbert
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