$12 million in Change Orders, Board Never Notified

Some things are changing in the Duluth Public Schools.  We have three new members improving the demeanor of the board and a modest increase in funding has appeared from the State and from the recent levy referendum. Both have the potential to allow us to start concentrating on lowering our class sizes, reversing the erosion in the number of students, adding back curriculum that has been lost, and addressing the persistent low test scores and the achievement gap. 

But unfortunately, some things have remained the same.  We still have money problems. The administration is projecting record deficits in the coming years. We have an administration that still is working hard at sheltering the Red Plan program manager, Johnson Controls, Inc., from all financial disclosure and criticism.  And that is hindering us from moving forward on improving the conditions for our children and finding ways to put more money into the classroom.

The Red Plan was the $315 million revamp and closure of many schools.  Many thought it was excessive that Johnson Controls was contracted to get $40 million-plus of that amount for doing the contract administration and architectural designs.  That number now looks more like $60 million.

The most recent controversy is that two board members have become aware that the District had negotiated five change orders (contract increases) since 2009 for at least another $11.8 million increase on those Johnson Controls’ contracts. Most people would think that such a large amount of money coupled with our continued budget deficit projections would have been of interest to the administration.   But in classic Gronseth/Dixon tactics used by Superintendent Gronseth and former Superintendent Dixon, questions have been ignored and board members asking the questions have been scolded for having the audacity of questioning what is going on.

The school board approved none of these change orders. And few, if any, past or current board members were even notified.  The change orders were closely hidden from the public.

Of particular interest is one $8.7 million change order entered into on January 13, 2012.  Duluth residents will recall that the school board passed a hotly debated $19.3 million Red Plan increase in March of 2012.  But throughout that discussion, Superintendent Gronseth  never informed the school board, the media, or the Minnesota Department of Education that Johnson Controls had already been promised to get the $8.7 million, or 45% of that $19.3 million cost increase. 

The people of Duluth were told that this increased money was going to be used to build better schools for our children and employ local construction workers. If the public had been told the truth about where that money was going to go, there certainly would have been even more questions about the desirability and wisdom of such an increase. 

Johnson Controls and its architects certainly were entitled to some of that cost increase, but the industry standard is that less than 15% of construction typically goes to project administration and design.  45% is highway robbery.

To make matters worse, Superintendent Gronseth is blocking board members from even adding this item to the agenda so it can be discussed in public.   Is there a simple excuse and justification for such stonewalling? Is it legal to block a school board from being notified of multi-million dollar changes orders?  Who knows? But I know a lot of people care about this continued lack of candor and transparency.

We are talking about the money that should have been used to deal with large class sizes, curriculum cuts, raising test scores, and reducing the achievement gap.

Art Johnston

School Board Member, 4th District  

An edited version of this appeared in the May 3, 2014 edition of the Duluth News Tribune