Serving Northern St. Louis County, Minnesota

Time for legislators to focus on the elephants

Marshall Helmberger
Posted 8/21/13

Why does it seem that the Minnesota Legislature prefers to swat at gnats rather than address the elephants in the room?

Here’s an example.

A couple years ago, the Minneapolis Star Tribune ran …

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Time for legislators to focus on the elephants

Posted

Why does it seem that the Minnesota Legislature prefers to swat at gnats rather than address the elephants in the room?

Here’s an example.

A couple years ago, the Minneapolis Star Tribune ran a few stories about abuses at a handful of charter schools in the Twin Cities, where board members appeared to be steering jobs and contracts to friends and family, rather than to the most-qualified for such positions.

These kinds of abuses, unfortunately, occur all the time, whether it’s in business or government hiring. But because the Star Tribune’s reports focused on charter schools, the Legislature reacted by passing the strictest conflict of interest rules in the state, that apply only to charter schools. Regular school boards, city councils, state agencies and other government entities can continue to hire friends and family unaffected by the new law.

I’m not relating all this to complain about strict conflict of interest rules for charter schools.

What surprises me is that the Legislature will react so aggressively when the abuses amount to a few tens or hundreds of thousand of dollars, but will ignore massive conflicts of interest that entail hundreds of millions and even billions in tax dollars. They swat at the gnats, and leave the elephants, like Johnson Controls Inc., peacefully munching on our tax dollars.

JCI makes millions by engaging in the most open and obvious conflicts of interest on a daily basis, and state officials routinely give the company their blessing in spite of it.

The experience in the St. Louis County School District was hardly an anomaly. JCI has crafted an extremely lucrative business model— that starts with a relatively low-cost “strategic planning” effort but quickly morphs into a gigantic capital facilities plan that soaks taxpayers, yields few benefits to school districts, and nets JCI millions in profits.

This is the very model that left taxpayers on the hook for millions in the Lake Superior School District, the Duluth School District, the St. Louis County School District, and that now threatens to do the same in the Hermantown School District, where JCI is pushing a $50 million facilities plan.

In the three local instances where JCI worked its “magic,” school districts were left financially strapped and mired in controversy, and taxpayers were left burdened with long term debt. As we reported last week, the St. Louis County School Board passed the so-called Bakk levy in order to try to keep the district’s financial head above water. That new authority was granted to school districts at the urging of Senate Majority Leader Tom Bakk, who knew that ISD 2142 had no chance of passing an operating levy given the widespread voter anger over the JCI-inspired restructuring of the district. Meanwhile, the $5.6 million in projected “savings” promised as a result of the district’s implementation of JCI’s facilities plan have proven largely illusory.

Down in Two Harbors, the Lake Superior School District is down to a four-day school week in an attempt to keep the lights on, and the Duluth School District is in the most desperate straits of all, in part because of the tremendous community upheaval JCI’s plan wrought there.

JCI has, time after time, left chaos and financial woes in its wake, because the advice it gives to school districts and other government entities is self-interested, designed to steer much larger contracts in the company’s direction.

There is no question that public entities, like school districts, often need guidance from those with financial or facilities expertise. But that guidance should be entirely separate and truly independent from any of the companies that stand to benefit from the recommendations or advice given by such advisors.

Had the St. Louis County School Board hired a truly independent consultant for strategic planning back in 2008, they would almost certainly be in a different place today. While JCI sold its plan to the school board as the only viable option, the truth is, the district could have gone in many other directions that could have yielded real financial savings and educational improvements. But the day they hired JCI, the doors to all those alternative futures were slammed shut because the company’s primary focus was to steer the plan toward a massive facilities project.

That’s been the end result of almost every JCI strategic planning effort that we’ve seen in our region, regardless of the circumstances involved. And here in northeastern Minnesota alone, that advice has left taxpayers on the hook for roughly half a billion dollars and yielded few, if any, benefits to the region’s school districts. And JCI, unfortunately, isn’t the only company that’s using such tactics.

You might think that someone in St. Paul would be paying attention and might be concerned that companies are using clearly predatory practices to take advantage of public entities that are simply looking for practical assistance.

It’s not as if state officials are unaware. Sen. Bakk is certainly aware. But rather than propose legislation that could put a halt to such costly conflicts of interest, he passes legislation that authorizes the St. Louis County School District, and others, to tax voters without their approval to help fill the funding gap left by JCI’s broken promises.

I’d rather see JCI get the bill.

It’s time that legislators and state officials who are supposed to oversee government spending sit and take notice of what’s happening. Spend less time swatting gnats and start shoveling the elephant dung in the living room. It’s getting pretty deep in there. Or, better yet, get rid of the elephant.

Comments

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Great minds think alike, Marshall. As you well know, I have, for years, deemed JCI should shoulder the costs associated with their flub-a-dubs on our school project. I see where the county is working on the Alango Road. Why should the county road and bridge fund pay for this when if the schools stayed where they were, this project would be unnecessary? Good op-ed!

And how about the unilaterally approved change orders that resulted in cheaper materials being substituted from the original plans to save money wasted on poor management of the project overall?

Thursday, August 22, 2013
jtormoen

Marshall, not sure if you intended the impression or not, but I got a kick out of it. I know only little of the specifics of the whole Johnson Control thing ... mostly only several years of TIMBERJAY articles ... but seems that the simple "follow the money" thing plays a role here. Who's hand is in who's pocket?

Thursday, August 22, 2013

Albertson has openly admitted that the project has failed to produce the results promised. He also said that we might as well quit enjoying its failure because no matter what we were doomed to pay for it.

Thursday, August 22, 2013
Hardrockminer

There is no place in the public sector for cronyism or nepotism. Our legislature and public employee unions would have to cease operations if ethical business practice was the law. The superintendents' husband has a sweet deal going with ISD 2142. If he is such an asset, let him get a job elsewhere. Privately owned businesses (no shareholders other than the owner) can hire/fire whomever they choose. Unlike government jobs, the poor performers can be fired at will. JCI seems to have mastered bait and switch. You would think elected leaders wouldleaders would have heard "fool me once shame on you, fool me twice etc.....' JCI made fools of the board, legislators that knew better, and the unnecessarily burdened taxpayers. Keep up the peoples work Marshall!

Saturday, August 24, 2013