By TODD RICHMOND
MADISON, Wis. (AP) — The University of Wisconsin System Board of Regents approved UW-Madison’s request Friday to spend nearly $33 million to cover cost overruns on two construction projects despite complaints that the work has been mismanaged.
The university is working to expand and remodel Babcock Hall, which houses the Department of Food Science and produces a variety of dairy products, including cheese and ice cream. The school also is building a new meat-science lab for animal research.
Both projects were initially approved in 2012. Since then, their cost have risen quickly.
The Babcock work was initially estimated to cost about $32 million. By this month, the cost had climbed to $72.6 million. UW-Madison officials said quotes for equipment and piping came in higher than expected and construction began before the designs for specialized equipment were complete.
The meat lab was initially approved with an estimated total cost of about $43 million. By this month, that estimate had increased to $57 million. Documents for the project spoke of “highly complex technical design and construction needs,” including infrastructure to accommodate donated equipment, a hydraulic plant and animal holding pens and equipment for chilling carcasses.
Under the plan the regents approved on Friday, the shortfall will be paid for using gifts, additional borrowing and cash from UW-Madison. The UW System plans to use $6.8 million in existing bonding, $7.5 million from gift reserves and $18.4 million in cash from reserves. Those transfers still need to be approved by the Board of Regents and the Building Commission.
The overruns drew the ire of state Sen. Steve Nass, a Whitewater Republican who serves as vice chairman of the Senate’s university committee. He issued a statement Thursday accusing UW officials of bungling the projects. He said regents aren’t paying enough attention to building projects.
The attacks weren’t lost on the regents. Robert Atwell, CEO of Nicolet National Bank, said the projects are important to the state’s dairy industry but play into a perception that the system can’t figure out how to oversee construction efficiently.
“The point is this recurrent theme (of) the difficulty of planning and executing construction projects that are badly needed,” Atwell said. “I’ve heard this theme over and over again. The problem with this situation is it feeds into a narrative. We have to do better. ”
Becky Levzow, a Rio dairy farmer and another Regent, said mistakes were made and people can point fingers but the projects will greatly benefit the dairy industry.
“I really see the value of this project that we have here,” she said.
Regent President Andrew Petersen concluded the discussion by saying “adults need to be in the room” to improve construction management, including himself, UW-Madison Chancellor Rebecca Blank, state Department of Administration Secretary Joel Brennan, the UW System president and the governor.
The bulk of the cost overruns come from the Babcock Hall expansion, whose general contractor is C.D. Smith. That project is adding three stories and remodeling the building so it can better accommodate UW-Madison’s Center for Dairy Research.
In early 2019, quotes for equipment and piping on the project came in over budget. According to the UW System’s brief to the regents, officials with various agencies have been meeting regularly to look closely at the project and hae hired Hill International, a construction-risk consultant, which recommended officials enlist an owner’s representative. The UW System brought Gilbane Building Company on for that role in November.
Mike Mikalsen, a spokesman for Nass, said the cost overruns on the Babcock Hall project are particularly troubling.
“The project wasn’t properly managed,” Mikalsen said. “The project manager let things get away, and (the UW System) knew of potential cost overruns.”
Though not as costly, the Meat Sciences building, whose general contractor is J.P. Cullen, has also stumbled since work began on it in 2017. When crews were excavating for the project, they discovered a large amount of contaminated soil. That had to be removed from the site and crews had to add structural soil to support the building, according to the UW-System.
The regents attempted to patch the budget by approving more money for the project in April 2018. But the costs have continued to increase. Even as on classrooms in the Meat Sciences building has moved ahead on-schedule, project officials have nonetheless been struggling with other parts of the project, such as the need to instill keep animal carcasses chilled.
“Significant efforts were made during construction to support the original vision– to construct the most state-of-the art facility of its kind, which subsequently impacted the budget and schedule,” according to the UW System.
– Daily Reporter staff writer Nate Beck contributed to this article.Follow @natebeck9