Regents OK $32.6 million in UW-Madison construction overruns

MADISON — 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 to handle animal research.

Both projects were initially approved in 2012. Since then their costs have spiraled.

The Babcock work was initially estimated to cost about $32 million. As of April 2018 the cost had risen to $46.9 million. As of 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 designs for specialized equipment were complete.

The meat lab was initially approved in 2012 as well at an estimated total cost of about $43 million. That estimate had grown to $50 million by last October and as of this month had risen to $57 million. The documents said “highly complex technical design and construction needs" have become fully realized, including designing infrastructure to accommodate donated equipment, designing and installing a hydraulic plant and animal holding pens and equipment for chilling carcasses.

Money to cover the shortfalls would come from gifts, additional borrowing and cash from UW-Madison.

The overruns drew the ire of state Sen. Steve Nass, a Whitewater Republican who serves as vice-chair 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 regents Friday. Regent Robert Atwell, CEO of Nicolet National Bank, said the projects are important to the state's dairy industry but the overruns play into a perception that the system can't figure out how to handle construction problems 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. ”

Regent Becky Levzow, a Rio dairy farmer, said mistakes were made and people can point fingers but the projects will help propel the dairy industry into the future.

“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 regents approved the spending unanimously. The request is still subject to approval by the state Building Commission, a group of lawmakers led by Democratic Gov. Tony Evers.