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Commentary: School board has to rethink referendum details

Posted: Friday, May 27, 2016 12:15 pm
By John Diers

On Tuesday, voters rejected the school referendum, sending it back to the Prior Lake-Savage Area School Board for reconsideration and, hopefully, revision. Clearly, more work has to be done.

The board must revisit the entire proposal, especially its costs and priorities, but it especially has to reconsider the decision to use a consultant to manage the project. That decision, to engage the same consultant to manage the construction projects as it used to develop the scope of the project and the budget, was a mistake. Worse, rather than negotiating and paying the consultant a fixed fee for construction management, it agreed to a percentage payment schedule based on the size of the project budget and the referendum, not the actual costs; hence, the bigger the budget, the bigger the scope of work, the more money for the consultant.

There is absolutely no incentive in the agreement to limit the overall scope or control costs. It is a classic case of the fox guarding the hen house. The May 21 Prior Lake American estimated the consultant would walk away with $14 million. I’ve looked at the contract and believe the consultant’s fee could be much larger than that.

Interestingly, the contract was originated by the consultant on its stationery, not the school district’s, which is unusual in itself, but it implies who was in charge of the negotiations and explains the fees — program management, 2.25 percent of total program cost; 7.95 percent of architectural construction cost; 8.95 percent of engineering construction cost; 2.5 percent commissioning construction cost; and 5.75 percent for construction management services.

The district first hired nexus Solutions in 2012 shortly after the company was founded. Their website www.nexussolutions.com offers no information on the company’s size in terms of revenue or number of employees, no information mentioning specific clients or projects and no information regarding whether the company has licensed engineers or architects on their staff. It does list the names and bios of three founders. It begs the question: did the school board exercise its due diligence?

There’s more: The contract identifies Nexus Solutions as the exclusive provider of all professional services for implementing the facilities plan and gives it ownership of all documents produced by Nexus and its subcontractors even though taxpayers pay for them. It gives Nexus, not the district, the right to select the architectural firm and all other engineering or professional services firms. It states that Nexus would have no liability for any damages arising from the work performed under the agreement, even though they control all professional services.

The contract is available online at the Prior Lake American website; I’d encourage readers to review it. I’ve worked with contracts throughout my business career and I’ve never encountered anything like this.
The board should carefully review the list of projects, costs and work plan and look carefully at how what’s proposed directly supports academics. Very clearly, more classrooms and ancillary facilities are needed along with building security, but the board should justify and explain how it proposes to spend $2.125 million per year for 10 years on technology and how that technology will be integrated, specifically in support of academic programs. Technology is a tool, not an end in itself. Such things should not be left to the Apple salesman.

It also needs to thoroughly rethink the $20 million-plus it wants to spend on athletic facilities at the high school and elsewhere, along with other programs and projects. Do they in any way facilitate academic learning or collaborative problem solving, or are they about competition and fostering a culture of winners and losers and entertainment — bread and circuses? If these are part of the next referendum, they should be on the ballot as a separate question.

Finally, it should cancel its contract with Nexus and re-evaluate how it proposes to manage the overall project. It could hire a construction management firm for a fixed fee. Or it could separately hire a qualified individual with a professional background in civil engineering and architecture along with a contracts person to manage the project as well as take responsibility for facility maintenance and engineering over the long term. Adding qualified staff costs money, but it’s less expensive in the long run than paying $14 million to a consultant, who will simply wave goodbye and walk away with the money when the work is done.

None of this is meant to be anti-school or unfair to school board members and district staff who, in fact, do have education and the students’ interest as their highest priority. However, mistakes were made. It’s time to come together, move on and fix them.

John Diers is a Prior Lake resident who spent 40 years working in the transit industry and author of “Twin Cities by Trolley: The Streetcar Era in Minneapolis and St. Paul” and “St. Paul Union Depot.” To submit questions or topics for community columnists, email editor@plamerican.com. (Editor’s note: Diers is a community columnist and not employed by, or paid by, the newspaper.)

Please read more from the Prior Lake American: http://www.swnewsmedia.com/prior_lake_american/news/opinion/columnists/commentary-school-board-has-to-rethink-referendum-details/article_d00681dd-3e2a-569e-a471-34af536f9eac.html