by Matt Robertson, Scott Long Construction
Pastors deciding to build, remember these words: contingency is your friend. The World English Dictionary defines contingency as a possible but not very likely future event or condition; eventuality. From my years of designing, funding, and building church related facilities, something always pops up that was “not very likely” to happen. Why? That’s just construction.
Take for example one client who failed to explain that there had once been a home on the site that had been knocked down and buried under several feet of dirt 15 years prior. Geotechnical studies had been completed, the normal soil borings, etc., yet no indication from the initial due diligence work that would indicate an issue. What appeared to be a beautiful grassy knoll with suitable soils turned out not to be the case when a dozer hit not only foundations and various parts of the home, but also an old oil tank. Boom! Just kidding, it didnât blow up. But, then we had to get the EPA involved, temporarily shut the entire job down, clean up the oil spill, and at the end of the day, cost the client substantial dollars. Unforeseen conditions must be planned for.
One of the biggest factors that often affects whether or not a church project breaks ground is inflation. In the DC Metro area, it is not uncommon to see a church project take at least five years to break ground. So, having a healthy contingency for inflation is imperative. Per the International Code Council, just five years ago a church cost between $142 to $196 per square foot to build. In February 2017, the same church on average would cost between $155 to $212 per square foot to build, up 8.6%. Per McGraw-Hill Constructionâs Construction Cost Index, overall construction for the same time period was up over 13%. If you were building a 10,000 square foot church building, the inflation over that 5 year period could mean $135,000 to $180,000, possibly enough to stop a project in its tracks. So, when starting a project, remember that it will not cost the same when you start the design process as when you start construction. Unfortunately, in the DC Metro area, some church projects can take five years or more to develop. Plan for it and do all you can to move the project along at a healthy pace. You can save substantial money by doing so.
Anyone who has ever built a house knows that there is always something you would love to change after the construction has already started. Something you just couldn’t “see” when it was being designed. Maybe it will be the size of the stage for
you, or a doorway that would be better as a double door rather than a single door, or maybe an entire wall needs to be removed to make your building team happy. These occur on almost every church building project so having the money set aside in the overall budget will ease the stress of how to pay for such changes when they happen.
So how much contingency is recommended? I have seen architects recommend 10-15% contingency in an overall project budget for design and construction. Inflation alone at 2% per year over a 5 year period could result in 10% or better in increased costs. And then you have the “unknown” or unforeseen conditions to plan for. So, a prudent range for contingency is somewhere between 20-25 % of an initial overall project budget for planning purposes. The contingency budget can be whittled down as drawings are developed, budgets and cost estimates are prepared by your design and construction team, and you get closer to breaking ground. But even as construction begins, carrying a 5-10% contingency budget is wise. Just in case no one on the building team âknowsâ that a house is buried on site.
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