Warning: Beware of $12 million accounting errors
There are times you want something so badly that, well, you won’t necessarily lie to obtain it, but you may not make much of an effort to talk yourself out of it, either, no matter how much the facts, or reality, intrude upon your desire.
This seems to have occurred within County management over the past six months, as the County has mulled over whether it should continue to rent office space for its South County workforce, or whether it should construct its own building to accomodate its workers.
At the Mono County Supervisors meeting on Tuesday, Todd Lankenau of Reno’s Collaborative Design Studio presented the “Mono County Government Center Feasibility Study.” The stated purpose was to assess County office needs in Mammoth through 2026. The stated need: 43,000 square feet.
According to Lankenau’s analysis, the cost to lease space from Sierra Center Mall over the next 20 years ($26.5 million) was hardly less than the cost of building and paying off a 43,000-square-foot building ($27.42 million estimate).
No-brainer, right? If it costs the same to lease as to own, why not own?
Only problem with Lankenau’s analysis is that he made about a $12 million accounting error in assessing the cost of a new building.
Greg Jennison, who testified before the Supervisors on Tuesday, didn’t think Lankenau’s construction estimate of $527/square foot was too bad. However, he said, one normally adds 20 percent to that estimate in “soft costs” (architectural, engineering, project management, et. al.) which the consultant neglected to do. Multiply 43,000 square feet by an adjusted $630/square foot (accounting for the soft cost—at a slight discount, I might add) and that gives you a project amount of approximately $27 million.