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CAG encourages the School Board to withdraw the Referendum

Citizens for Accountable Government (CAG) has obtained a copy of an agreement between the Prior Lake-Savage School District and Nexus Solutions (a small consulting company) that was submitted to the School Board for approval last October. We believe this is the contract the School Board is currently operating under, but School Administration has been unwilling thus far to let us review contract documents. A review of the document raises numerous red flags.

It would appear that Nexus Solutions will stand to reap tens of millions in revenue from the tax payers in our District, by being placed in the driver’s seat as the exclusive provider of all professional services for the School District’s long range facilities plan. This is in spite of the fact that the Nexus Solutions website gives no indication they have the in-house capability to deliver. Nexus Solutions appears to be a very small consulting company that didn’t even exist before 2012. The website offers no information on the size of the company in terms of revenue or employees, no identification of specific clients they’ve served or projects they’ve completed, and no identification of executive officers other than a listing of three co-owners.

This agreement of course ties into the $150 million school levy referendum that voters are being asked to approve. The fees in the document for Nexus Solutions are staggering: Program Management, 2.25% of total program cost; 7.95% of Architectural Construction cost; 8.95% of Engineering Construction cost; 2.5% Commissioning Construction cost; and 5.75% for Construction Management services. Without knowing precisely how these percentages get applied to the various elements of the $150 million referendum and the $13.4 million Long Term Facility Maintenance Reserve (LTFMR) which also seems to be in the Nexus package, our best guess is that the cut for Nexus Solutions will exceed $30 million. From what we have been able to garner, The School Board was never given an estimate from either Nexus Solutions or District Staff regarding how much Nexus Solutions would get.

That’s a lot of revenue to a 4 year-old company whose website offers no indication that the firm has licensed Architects, Civil Engineers, or Construction Engineers capable of performing the task. It would appear they would have the sole right to select sub-consultants such as architects or engineering firms, and collect a substantial fee in the process.

It’s noteworthy that Nexus Solutions has been the consultant who developed the projects and the cost estimates to be funded by referendum dollars, and of course the bigger the budget, the bigger their share of the Referendum dollars.

The concerns we’ve outlined above are the tip of the iceberg. There are other numerous questionable provisions in the agreement we’ve seen. The 14 member Steering Committee of CAG strongly encourages the School Board to withdraw the Referendum, and to reassess the scope of what is needed to meet the needs of a growing student population in a fiscally prudent manner. Failing that, we CAG encourage residents to vote NO on the referendum.