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Serving Northern St. Louis County, Minnesota

ISD 2142

Time for state officials to demand a response to evidence they were misled

Posted 2/13/10

It’s time for state officials to step in and start demanding some answers from St. Louis County School officials and their consultant Johnson Controls.

The evidence is piling up that both state …

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ISD 2142

Time for state officials to demand a response to evidence they were misled

Posted

It’s time for state officials to step in and start demanding some answers from St. Louis County School officials and their consultant Johnson Controls.

The evidence is piling up that both state and school officials were taken for a ride by a Fortune 500 corporation that had a multi-million dollar conflict of interest when it developed its restructuring plan for the St. Louis County School District.

Officials from Johnson Controls and its hired partners appear to have presented information to both state and school officials that exaggerated the school district’s actual financial condition as well as the savings their restructuring plan could achieve.

The public and members of the St. Louis County School Board were given details of those exaggerations Wednesday night— and the information raises serious questions about the accuracy of the claims made by Johnson Controls to state officials as part of the Department of Education’s Review and Comment process.

The state officials had a key role in deciding the fate of the plan concocted by Johnson Controls. Had state officials given the district’s $78.8 million bonding plan an unfavorable rating, it would have required 60 percent support from voters for approval. As it was, the plan barely passed despite an aggressive campaign of misinformation waged by Johnson Controls and school district officials and board members.

While Department of Education officials granted a favorable rating for the project, they did so based on the information provided to them. Department officials have confirmed to us that they do not verify financial data submitted by school districts. “It is the local school board’s responsibility to assure that the financial information provided on the proposed project is as accurate and timely as possible,” stated Christine Dufour, a spokesperson for the department.

If, as now appears likely, that information was inaccurate, outdated, or otherwise misleading, it could have had a material impact on the department’s decision— and on whether this plan ever went to voters.

State officials can not allow school districts or consultants like Johnson Controls to skate off with millions of taxpayer dollars based on faulty information, whether it was presented out of incompetence or an intent to deceive.

Right now, we still have plenty of questions. But we do know some things for sure. On June 22, 2009, the St. Louis County school board approved a 2009-10 budget that included significant staffing cuts and additional revenues. As the school’s business manager reported at the time, the district’s financial condition was “much better than previously projected.”

Yet, in August— two months later— Johnson Controls used those old “previous projections” to dramatize the district’s purported financial crisis to state officials. Most disturbingly, the budget projections presented to the state inexplicably failed to include the 2009-10 budget year. Had they included that data, it would have shown that the district’s financial situation was substantially improved, since the district’s general fund deficit had been trimmed from approximately $1.3 million in the 2008-09 school year to just $457,000 as a result of the budget changes approved in June.

In addition, Johnson Controls failed to account for the cuts made in June when presenting estimates of the savings their restructuring plan would make possible. In their presentation to state officials they claimed at least $1.75 million in savings that had already been achieved through cuts approved two months earlier.

So, we appear to have an exaggerated financial crisis. We have what looks like overstated savings from a restructuring plan. And we have a consultant that stood to reap $10-$14 million from the plan’s approval.

Let’s be perfectly clear. It stinks to high heaven.

If state officials allow this situation to stand, it’s a travesty. Forget the fact that the plan is flawed from top to bottom. If state officials are unwilling to act in the face of compelling evidence that they were misled, it will be a declaration of open season on the pocketbooks of taxpayers around the state. Voters look to state officials to provide them guidance on the merits of school district bonding proposals. But that guidance is of little merit if state officials can be misinformed without consequence.

State officials must act, and act soon. With Johnson Controls pushing the board to move ahead at a feverish pace, the board could well award construction contracts by next month. Then, reversing course becomes both difficult and expensive— and viable communities will be severely harmed. State officials have the responsibility to put a hold on this until the facts can be sorted out. Failure to act would be a dereliction of their responsibility.

Johnson Controls, ISD 2142, Minnesota Department of Education