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drawings are finished. As the project moves along the budget estimates wiil move closer to actual construction costs. Profor-na Billy Wasson noted the change in the interest rate (paragraph four). In his discussion with Melvin Mark and the cost estimators both noted the current construction environment is beneficial for the project. There are fewer projects of this size being done, which should result in a better bid. Billy Wasson said based on the current budget estimates, design development drawings, and current market it is stafPs recommendation to proceed to construction drawings and bid the project. R.G. Andersen-Wyckoff noted the difference in interest rates is not reflected in the current budget estimate for the project, The $600,000 savings in interest cost is a totally separate savings in the overall proforma. Streetscape Fundinq The Committee discussed the City of Salem~ Urban Renewal Fund contribution of up to $2 million for streetscape costs. The $1.6 miQion streetscape are harci costs. The $1.6 million estimate doe.s not indude ali oosts. espeaatly past expense for streetscape. Budget Estimate Discussion Jerry Vessello noted the total hard cost contingency is 12.5 %. He also noted he used A.C.C. one time and found their estimates conservative. David Cameron asked if the current design is different from the previous design to account for the budget estimate change. R.G. Andersen-Wyckoff noted the design has not changed from the original cost estimates. Billy Wasson noted it is the same square footage, same number of parking spaces, and the same project, only the level of detail has improved Maynard Hammer asked how value engineering plays into the new design and estimates? He also noted the tenant improvements on the second floor are $5-$7 lower than other floars. Leonard Lodder noted the change in open floor space design compared to individual offices is one item that has driven down the cast. Individual offices are more expensive to build than open floor space with partitions. R.G. Andersen-Wyckoff responded to the value engineering question. He noted a peer review was conducted by Tri-Met and Lane Transit District. Weekly review of the designs produced discussions on segments and the costs came down as changes were made. Craig Lewis noted tenant improvements came down several hundred thousand dollars when enclosed offices were c:hanged to open floor space. Jerry Vessello said he attended the gas versus electric HVAC system discussion and is satisf~ed with the choi~e to use a gas/electric combination with reheat on Minutes of August 24, 1998 CAC Meeting Page 4 of 8 12