This referendum is supposed to be about space for our growing School District, but it has also become a referendum about trust. If passed, the bill to taxpayers is $172 million in new additional debt payments over the next 20 years, assessed to your property tax statement. And yes the number is real, taken directly from the report of the District’s financial consultant. The question is, should we trust the competency and integrity of the School District’s business office, to administer the spending of these funds in an efficient and effective manner, and for the right purpose.
Should we trust the integrity of the two founders of Nexus Solutions who got their foot in the door under questionable circumstances, and are the principal drivers of the referendum project including related budgets and fees? Should we be comfortable with the fact that these are two outsiders to our community who submitted a proposal to our District’s Business Director, who subsequently signed the contract that commits the District to “contract with Nexus Solutions for all professional services required to implement this work”, including but not limited to “program management, engineering, architecture, construction management, and commissioning”. There is no mention in the contract of how much Nexus would get paid for these services that turned out to be $8.7 million by mid 2016.
A letter to the editor from Mary Haugen (Nexus contract doesn’t change District’s needs) helps explain where the money goes on Nexus directed projects. According to Haugen, the District will have spent a whopping $854,778 by the end of 15 years, on two generators that were purchased from Nexus. We knew that $602,000 had already gone to Nexus, as reported in my commentary two weeks earlier (School Board should answer questions about generators), but didn’t know it would take another quarter of a million dollars. The question is, what do we get in return.
When the School Board approved the acquisition of the generators, it was based solely upon being able to receive a reduced electrical rate from MN Valley Electric (MVEC) for having stand-by generators on site. The analysis presented to the Board by MVEC and Jim Dellwo a District employee, showed that if the generators had been in place the full year prior to the Board’s decision, the District would have realized an energy savings of $41,321. Savings in future years would depend upon electrical usage and electrical rates. If usage goes down which it should since we paid Nexus $3 million in part to reduce energy usage, the annual savings would go down. On the other hand, as the cost of electricity increases the savings would increase. Future savings are a guess, but if we use the $41,321 figure as the savings per year for 15 years, the energy savings in 15 years would be less than $620,000, for which we will have spent $854,778. I suppose we should be thankful to Haugen for her disclosure that the generator deal with Nexus is much more expensive than we thought, by a quarter of a million dollars, but it doesn’t make me feel any better. Is this simply incompetence, or something worse?
This pattern in the District/Nexus relationship seems all too familiar. Nexus makes a recommendation for which they get paid a healthy fee, taxpayers foot the bill for what turns out to be a losing proposition, and applause is heard from the School District offices. How many business executives in the real world would bite on this kind of deal? Not many if they want to keep their jobs. The $426,511 authorization to Nexus from J. Cink for consulting services for the artificial turf project is just another example.
Until I can see evidence of integrity and competence being exercised by the Board and the Administration, I will not personally support a referendum. For me the qualities of integrity and competency are core values that ought to be the foundational in every decision that our School District makes. When some in the leadership of our District employ a strategy of character assassination against individual members of our community, against community groups, against our local newspaper, and even against a colleague on the Board who raised legitimate concerns, we have a problem. Whether the referendum passes or fails, our community is divided, and it will remain divided until that problem is addressed and fixed in a credible way. Since the current Board majority includes the same four individuals who were on the Board when the initial deal with Nexus was approved, I’m not optimistic that the problem will be addressed until we see a change in the mix, hopefully at the end of next year.