Gonna go to hell

by Loren Martell

Painting by Ted Heinonen
Painting by Ted Heinonen

When word reached me that ISD 709 was considering moving its administrative operations to the New Central property, I was actually HAPPY.  That’s the only word that accurately describes my reaction: For the first time in well over a decade, I was actually HAPPY about a decision from our school district.    

I thought the district had finally realized it could benefit from using the long-abandoned buildings on the Central site.  

Rather than choosing a commonsense plan, however, our district always trends towards grandiose.  Their previous BIG plans have worked out so well, our leaders apparently thought it was a good idea to keep the ball rolling.  Anyone who dares to point out the flaws in their latest BIG thinking will, of course, be branded as obstructionists getting in the way of another GRAND vision, naysayers standing in the way of progress.

The BIG idea

In a nutshell: District administration has recommended moving administrative operations as well as transportation up to the new Central campus.  On the face of it, moving administration, at least, is a good idea.  Two multi-million dollar buildings have been sitting empty on the new Central campus (a third being used by Facilities Management) for going on a decade.  Even after sitting vacant for so many years, the two empty buildings are only 48 and 23 years old.  The one being “temporarily” used is only 25 years old.  

The size of the 48-year-old Central high school is 228,826 sq. ft.  The 23-year-old lower campus Secondary Tech Center building is 52,775 sq, ft.  The 25-year-old upper campus STC building is 16,000 sq. ft.  Both STC buildings together are about a third of the size of the high school, but for now the district intends to spare them from the wrecking ball.  It’s the high school our leaders intend to tear down, another environmental crime that will waste well over a million dollars.    

Our leaders want to replace the high school with one of our district’s infamously “right-sized” buildings, for a mere project price tag of $31.5 million.  They want to slice and dice up the rest of the 77 acres and get back into the real estate market.  We’ve fared so well from selling property, our leaders are eager to get back into the game and make some more “deals” for our community.  

Good reason for skepticism

Our school district needs to regain trust, but this plan may do the opposite.  This new BIG scheme is flawed, beginning with the price tag.  What happened with the Red Plan should make everyone question any construction cost estimate that comes out of our school district.  The cost overruns and mission creep of that project should keep this town on RED ALERT for at least a generation.  In 2010, Johnson Controls tossed $11.6 million of the original work scope over the side of the boat when the Red Plan’s budget first went south.  Two major projects--a new transportation building and work on Old Historic Central--were eliminated, at no reduction of the price.  This deferred work is plaguing our school district now.  

On top of THAT, just a year after JCI tossed $11.6 million of the work scope over the side of the boat, $15 million MORE was added to the cost of the plan.  Four months later, $4 million MORE was added.  When I asked one of the Board members at the time how he could have allowed such a thing to happen, he responded with a whine: “I didn’t have any choice.  They had us over a barrel!”

You’d think our school board would be cautious about being put over another barrel.  

Another flaw of this plan: If we slice and dice the property up too much, we will make it unusable for educational purposes.  The Red Plan was a bad fit for Duluth.  The costly scheme produced a highly predictable result: It worsened the East/West divide and drove down enrollment.  At some point, in the not so distant future, we are going to need educational facilities in the center of our city again.  Whatever we do with the Central property should keep its use as a future educational facility alive.  

Another very significant flaw: Our school district made all its facilities “new or like-new” in a short span of time.  From the beginning it was evident this was a poor long-range plan that would make it impossible to stagger out a sensible maintenance schedule.  All these “new or like-new” facilities would need maintenance about 25 years or so down the road, about the time we got the bonds paid off.  Two years ago, the district’s Facilities Manager, Dave Spooner, warned the school board that we have a remaining 5-10 year “grace period” before we get hit with “a huge number”--in other words, millions and millions of dollars--a veritable tsunami--of maintenance costs.  

Our school district not only doesn’t have money to cover the coming crisis, it has been raiding the already abysmally inadequate long-term facilities maintenance fund--borrowing against it, as well as paying employee salaries and benefits out of it.  The district now intends to use its recently-hired legislative lobbyists to convince State legislators to allow ISD 709 to raid the long-term facilities maintenance fund in a new way--to finance a construction project being recommended by another Superintendent, just like Keith Dixon, who is slipping out the door.  

The argument being made is that we’ll be SAVING the $48.5 million of repair work needed for Old Central, but there is good reason to anticipate a price escalation of this new venture.  Like past BIG “savings” claims from our school district, much of the promised return will likely vanish like smoke.  

Instead of using taxpayer money to commit an environmental crime (at least $1.5 million, to tear down a 48-year-old building) we could use that money to pay for a new roof and other repairs, at a fraction of the cost of this scheme.  Money gained from selling Old Historic Central could actually be (dare I say it?) SAVED, and used for what it’s supposed to be used for: Maintenance.    

Any person looking at a huge expense coming in the near future in his or her private affairs would grow conservative, buckle down, make do with what he or she has and start pulling funds together to meet that obligation.  Fixing up New Central High school and using it for a while until the district has gained firmer financial footing should at least be considered.  Such a move would also hold open the option to reuse the location as an educational facility.  One “good” outgrowth of the Red Plan is that the foolish endeavor drove away so many students, one central high school would no longer be anywhere near as large as it once would have been.  

If the Central campus is abandoned for educational use, who will take over what amounts to our local version of a national park?  Are we going to carve a freeway up the hill?  Put administration, all the buses from the transportation department and the new owners of portioned real estate parcels up on that hilltop, without expanding access, and the place will be a perennial traffic snarl.  

Spending money to make money

Just before he slipped out of town, Keith Dixon claimed the mission of his multi-million dollar extravaganza was to “reduce our out-of-classroom costs as best we can, to maximize the amount that goes into the classroom.”  During the meeting he made this absurd claim, Dixon introduced two resolutions to add $34 million more to the Red Plan.  The money approved by the Board actually robbed more funds from our classrooms, and will through 2032, to pay off the $9,134,917.50 debt of the 2012b bond.  

This claim of spending money to be fiscally responsible has become an increasingly commonplace argument used by school districts and the vendors who are making money off them.  The lobbyists working for our school district call themselves the Costin Group. They were on the team that came up with this plan.  The same lobbyists are working with the school district in Ely to help “explore potential funding options” for a multi-million dollar facility renovation project, according to the Timberjay Newspaper.  “It takes money to make money.”  Ely’s Superintendent proclaimed, as he recommended hiring the Costin Group.  

In its report about this latest Duluth venture, the Minneapolis Star Tribune quoted the school district’s CFO, Cathy Erickson, this way: “I truly believe that a component of fiscal responsibility is sometimes we don’t have an option but to spend dollars.”

What caused so much of the escalating cost of the Red Plan was that the consultant justifying the work was positioned to make money from the work.  Some of the people positioned to make money from this venture--the bond broker, the real estate agent who has been trying to sell the Central property, for example--were part of this working group.  These players do have expertise to add to the mix, but they also have a conflict of interest called profit.  

Just look at what Johnson Controls led us into on the Central campus.  Property with “extraordinary“ development costs has been sitting empty for nearly nine years.  We’ve lost millions of dollars from upkeep and utilities and insurance and inflation and real estate expenses, and we still can’t sell it for its current asking price, slashed from the original listing of $13.7 million, to $7.9 million.  

You’d think a failure like this would make our representatives put another scheme proposed by administration and hired consultants under a microscope and parse it out very carefully, to avoid repeating past mistakes that lost public trust.  

 One voice tried  

During the meeting held 1/29/20 on this proposal, Board Clerk Oswald worried about spending $31.5 million on a new building by using tax money that again circumvented public approval: “I don’t think I need to remind any of us here that taking away the public’s right to vote on their taxes is an extremely harsh thing to go over in this community.  And I don’t want to create any more consternation.  We have lots of (members) of the public who say, ‘Do not ever take our right to vote on our money away from us again,’ and that’s exactly what we’re proposing to do: To ask the legislature to override their vote and tax them automatically--which is a hard pill for me to swallow.”

Member O then asked: “Should they (the legislature) approve the $31.5 million request to use LTFM money for this, do we have to use it all?”

Mr. Gronseth, our Super, who will be gone by summer, dismissed member Oswald’s concerns this way: “We already have authority to spend $48.5 million on this building, and we could start (spending) that this summer.  What we’re looking to do (by doing this) is spend less.”

“And my response to that is,”  member O came back, “four years ago when I sat here and asked, ‘Does the public really want to spend $18 million on this building?’ and the response was mixed.  And that was a lot lower price tag.”

The ever-vigilant member Oswald put her finger on two truths: The public wants a say about its money and the original estimate always escalates.  

“If you frame it like we’re taking their right to vote away, I think that’s adversarial, and I think that’s harsh language and it’s somewhat stirring a pot we don’t need to stir.”  Chair Lofald countered.  “Is there some (part of the) community that will push back?  True.  Is that a majority?  I don’t think so.  This community has voted for referendums.  They have just told us in many focus groups that we have--that our best assets are here, in Duluth--with teachers, kids, students, buildings.”

The lecture continued from the sage on the stage:  “And so, as a Board, I want to embrace that.  I don’t mind sharing or even talking verbally right now that we understand that there is going to be a couple of people who come to the podium to tell us that we’re gonna go to hell because we’re taking their vote away...”  

Member O responded, a few minutes later: “I appreciate your support for this resolution that I’m not even sure you’ve read yet, because it was just handed to us.”

The Chair, who had not read the resolution, responded off-mic, making her words hard to pick up.  It sounded like she said: “I’ve got the gist of it.”

Holding up the resolution, member Oswald looked at administration and said: “This was ready-made.  We could have had it; now I feel rushed to read it.  And, you know--materials three days in advance, those kinds of things.  Thanks.”

“I’m going to ask that as we move forward we’re respectful to each other, and scolding each other in an open forum is not an appropriate way for us to treat each other,” member Eder, scolding in an open forum, dressed member O down.    

Lofald praised the peerless wisdom of administration throughout the meeting, at one point exclaiming that she was “impressed the whole night, tonight.”  Our democracy-prone Chair argued that “trying to go to the public for things is not always easy” and that the school board was “actually asking for a way of getting a better tax deal.”  At one point, she declared: “I think that a courageous Board knows that the courageous thing to do, the right thing to do, is to use our money wisely.” 

The people controlling our school district are again contending they’re using money “wisely” for a grand venture.  They’re again taking the “easy” path around democracy, claiming majority support.  They’re again describing themselves as “courageous,” without having the courage to put another of their BIG schemes to a vote.