New London — The City Council has rejected the $39.3 million price tag for construction costs associated with the renovation of Bennie Dover Jackson Middle School because of a possible increase in costs to taxpayers, threatening to further delay the project on the eve of the start of construction.

The council voted 5-2 against the so-called guaranteed maximum price, or GMP, acting in part on advice of Finance Director David McBride and Mayor Michael Passero. The move halts the awarding of contracts by O&G Industries, the construction manager, to the trade contractors who bid on the project.

McBride said that while the project is technically within the $49.5 million construction budget, the state has so far deemed too many elements of the proposed project to be ineligible for 80% reimbursement from the state. As a result, McBride said more of the costs than expected would be shifted to taxpayers.

When taxpayers in 2014 approved the reconstruction of the high and middle schools at a total cost of $165 million, the middle school project had $55 million allocated to it. At an 80% reimbursement rate, the cost to the city for the middle school project would be $11 million.

McBride said while a certain percentage of school projects often contain ineligibles, the middle school project as designed is already beyond the $11 million the city expected to pay. He predicts that while some costs will become eligible, at least $2.3 million of the total costs will remain ineligible for the full 80% reimbursement.

“As a result, before a shovel hits the ground," McBride said, the project is not adhering to the 80%-20% reimbursable rate.

Councilors at a meeting on Monday appeared torn on whether to move ahead or risk months of delays if the project has to be rebid into a volatile construction market that could lead to higher costs.

Representatives from Colliers International, which is managing the project, said it already has spent months working to reduce costs and bring them in line with the budget. The GMP previously was approved by the School Maintenance and Building Committee.

Councilor Curtis Goodwin at Monday’s meeting acknowledged the risk of cost escalations but said the city needs to manage the project to protect taxpayers. He voted against it.

Councilor James Burke, a member of the School Maintenance and Building Committee, and Councilor Alma Nartatez both voted to approve the costs. Both said that while there were missteps in the past, the benefits of moving forward with the project would outweigh the potential delays and the near certainty of future cost increases.

The answer to what happens with the project is unclear.

“Quite frankly, I’m not sure what the next steps are,” Burke said. “We’ve done extensive value engineering and worked hard to get this project within budget. I stand by the fact that we need to get going as soon as possible.”

He said he is willing to move forward with cost-cutting measures but would not be happy if cuts impact school programming.

Mayor Michael Passero, who has expressed his frustration with the project budget and the fact the central office was not part of the renovation plan, is scheduling a meeting with representatives with the state Department of Administrative Services’ Office of School Construction Grants and Review in an attempt to work to reduce the costs.

Talks about using $5.5 million of the middle school contingency funds for the central office renovation have ceased, however, since cost estimates were beyond the budget.

McBride said his hope was that the state would agree to a higher reimbursement rate for ineligibles but said the school district might also consider dropping elements of the project that are not part of the construction — things like artificial turf for the school courtyard or new computers.

Councilor John Satti, chairman of the School Maintenance and Building Committee, said one of the reasons he voted against the GMP was what he considers redundancies in the two construction projects.

The school district has developed plans for three magnet schools: STEM (Science, Technology, Engineering and Math); International Baccalaureate, and Visual and Performing Arts. The high school, along with high school STEM and IB pathway students, will host an arts pathway for both middle and high school students in expanded art spaces.

Middle school STEM and IB students at Bennie Dover also will have newly constructed arts spaces — chorus, band and digital arts areas — as required by regular middle school curriculum.

Satti said portions of the middle school are being torn down only to have spaces that already exist rebuilt.

“I’m fiscally conservative and I have a responsibility to protect the purse strings of the city,” Satti said. “My problem is we’re spending tens of millions of dollars at the north campus to create performing arts space and we are also spending millions and millions of dollars recreating space where we already have space.”

The Bennie Dover school project earned site plan approval from the Planning and Zoning Commission in October. Plans call for a phased project that includes demolition of an older portion of the school, an addition, extensive classroom renovations, reconstruction of an interior courtyard and expanded outdoor space.

The $108 million construction project at the high school is underway.

g.smith@theday.com