Avoiding Budget Bloat in Church Construction
Church construction projects (and their budgets) seem only to grow over time, not shrink. Here are three tips to prevent construction budget bloat.
Tip number one is to make sure you have everything in the project budget to begin with. Your project budget should be one that includes everything including site acquisition, site development, architectural design, engineering (including survey, civil and fire), construction interest, fees & permits, consulting fees, contingency and furniture and fixtures. Whatever you forget in the planning stage you will pay for later in the project, usually after you have already used up all of your budget on the things you did remember.
Secondly, make sure the budget is reasonable. Your builder should the church a complete project budget prior to construction. One of the safest contractual arrangements for the church is one that provides a guaranteed not-to-exceed price. In this agreement, the builder is responsible for underbidding, errors, and omissions. This is typically easier to do with a design/build firm, as they are responsible for both the design and construction. If something is left out or underbid, they can blame no one except themselves. Whoever provides the project budget should have some responsibility and liability for that number. For planning purposes, you should figure that your project budget (including everything) will be no less than $100-125 per square foot. Certain states and metro areas will be higher.
Finally, watch the change orders. Change orders will happen. If the changes are required due to code compliance, there is little you can do except grin and bear it (note, the building inspector does not always interpret things the same way the planning department did when they approved your plans). If the change order is because of a design deficiency, you can try to pursue the architect’s errors and omissions insurer (best wishes with that) unless it was design/build, in which case you can probably make some or all of the problem the builder’s. That all being true, the biggest threat however, to budget creep is often the church! Once the church has had designed just about all it can afford (and sometimes more), sometime during project construction the pastor, a deacon, or building committee member will get a “great idea” and ask the builder if they can do it. Generally the answer is yes, however, is always at a cost. It all adds up, $80,000 here, $12,00 there, and pretty soon a budget that was already tight becomes super-critical.
In summary, know what you can truly afford, design to your budget (and stop there), don’t make changes once construction starts, and keep an eye on those change orders. Change orders make up a large portion of many builders profit objectives, so watch out that you don’t pay more for them than they really cost.
Related posts:
- The Most Asked Question in Church Construction "How much will it cost to build the church?" is by far the most asked question we receive. This is a very important question, and...
- Contracting for Church Design & Construction Which Way is the Right Way? There are a myriad of ways for a church to contract for the design and construction of a new...
- How To: Estimate a Church Building Program Budget “What man would build a tower without first counting the cost?? – Jesus Millions of dollars every year are wasted on church building plans that...
- The Worst Way to Design & Build a Church I have seen a number of articles recently that echo what I have been saying all along, that the “traditional” Design/Bid/Build (DBB) model is not...
- Count the Cost of Church Construction One of the things that fails to concern me is the general lack of financial skills in the leadership of many churches. If I had...
- Intro to Church Design & Construction I’ve been threatening to do this for a long time, so I am starting this Church Design & Construction blog to provide a forum to...
- The Biggest Mistake in Church Design As I look back over the years and hundreds of church building stories I’ve heard, by far the single biggest mistake made by churches in...
- Architects and Church Construction Cost I had to laugh today as I was reading a Scout Merit Badge Review on the usscouts.org website. One of the merit badges which boy...
