BUT WE NEED MORE CLASSROOM SPACE, AND RESPONSIBLE MANAGEMENT OF THE RESOURCES REQUIRED TO GET US THERE.
Population growth plus the Board’s open enrollment policy, have overloaded available classroom space in our District.
We believe the problem must be fixed, but in a fiscally responsible manner.
CAG does not believe the Board’s relationship with Nexus Solutions, and the resulting fiscal policies meet a criterion of fiscal responsibility or accountability.
FISCAL CREDIBILITY SHOULD BE RESTORED BEFORE PUSHING THE TAXPAYERS DEEPER INTO DEBT.
THE NOVEMBER REFERENDUM APPROVED BY 5 OF 7 BOARD MEMBERS IS COSTLY.
If passed, it commits in-district taxpayers to:
$172 million in tax payments over 20 years, to pay off just the new referendum bonds.
A 37% increase in the cost/student local operating tax levy
Taxpayers in the District pay the total bill for the referendum. Out-of-district residents with students in our District schools, pay none of the referendum imposed tax.
OTHER FINANCIAL FACTS (Ref. 2017 Audit)
- District operating cost/student/year = $10K. MN pays $7K. District taxpayers pay the extra $3K for 1029 out-of-district students. ($3k times 1029 students = $3.087 million.)
- General Fund spending (operating cost) increased 28% from 2013 to 2017, while the cumulative effect of increase in enrollment and inflation was only 22%.
- CAB proposed creative financing adds $9.4 million to total cost as compared to conventional financing. It makes the referendum look cheaper when it’s not.
NEXUS IS PRIMARY CONSULTANT TO SCHOOL DISTRICT, RECOMMENDING PROJECTS & BUDGETS.
If the referendum passes, Nexus receives an estimated $13 million revenue, in addition to approximately $10 million they received since hired-assuming budgets and projects don’t increase as they have in the past, where Nexus has been involved.
THAT $23 MILLION TO NEXUS DOESN’T BUY BRICKS OR TILE TO BUILD NEEDED CLASSROOM SPACE.
WHAT NEXUS GETS PAID FOR
Nexus was paid $5.3 million to consult on maintenance projects like crack sealing of blacktop, repair of retaining walls, or resurfacing the running track, and on bigger projects like $3 million for synthetic turf.
District authorization to Nexus for professional services (consulting) on turf project was $426,511.
WHY DOES IT REQUIRE A CONSULTANT TO SOLICIT PROPOSALS AND AWARD BIDS?
WHAT SHOULD BE DONE?
THE CLASSROOM SPACE PROBLEM CAN BE SOLVED BY REJECTING THE REFERENDUM, AND THEN TAKING THE FOLLOWING STEPS.
1) ELIMINATE DEPENDENCE ON OUTSIDE CONSULTANT FOR FACILITY PROJECT PLANNING AND FISCAL GUIDANCE
- Terminate Nexus
- Hire a competent in-house facilities engineer/manager to oversee facility needs
- Return to the practice of competitive procurement on all major contracts
2) ELIMINATE OPEN ENROLLMENT TO THE EXTENT PERMITTED BY MN STATUTE
3) DEVELOP A FISCALLY RESPONSIBLE REFERENDUM FOR VOTER DECISION IN 2018
- Define needs based upon closed enrollment, instead of using open enrollment to accelerate growth and drive needs.
- Differentiate critical needs from wants, and let voters decide what to support. (Eliminate the all-or-nothing approach).
- Use conventional financing to reduce total taxpayer cost, instead of CAB financing that hides increased long-term cost.
CAG CANNOT SUPPORT COMMITTING MILLIONS OF TAXPAYER DOLLARS, TO BE SPENT BY THOSE WHOSE FISCAL POLICIES AND DECISIONS HAVE NOT EARNED TAXPAYER CONFIDENCE AND TRUST.
WHAT IS CAG’S NUMBER ONE CONCERN?
THE HIRING OF NEXUS IN 2012
May 17: School Business Director Cink meets with Michael David & David Jones.
May 24: Mr. David sends proposal to Cink.
June 20: Nexus registered as MN company
July 16: Board approves hiring of Nexus (Cink made recommendation to the Board, in absence of Superintendent Gruver.)
$$ A RED FLAG $$
In 2 months Nexus went from being non-existent, to receiving a facility planning contract signed by Business Director Julie Cink, with a requirement for the District to “contract with Nexus for all professional work required to implement the project”.
Cink’s justification included written adulation from Superintendent Gruver, that of companies considered, “one company clearly stood out: Nexus Solutions”.
Nexus, a start-up consulting company with no operating history, references, or financial report that we’re aware of, was handed a sole-source multi-million-dollar package.
AS A BUSINESS MODEL, THIS IS IRRESPONSIBLE, AND TOTALLY UNFAIR TO TAXPAYERS.
WHY CAG RECOMMENDS VOTE NO
NEXUS: We cannot support millions of taxpayer dollars going to a company whose hiring defied all credible business practice.
PRIORITIES: The proposed referendum is an all-or-nothing basket, with no prioritization of critical needs vs wants, some driven by small groups with special interests.
CAB bonds: The use of creative financing (somewhat akin to variable rate mortgages) reduces initial payments, but increases total cost to taxpayers’ vs conventional bonds.
OPEN ENROLLMENT: Continuing open enrollment when we have overcrowded schools, makes no sense at all.
FISCAL MGT: We have no confidence in the integrity of the District/Nexus connection.
WE CAN DO BETTER, FOR OUR KIDS, AND FOR THOSE WHO TEACH THEM.