Should we ask the expert?

Loren Martell

One detail in particular caught my attention during the school board’s interviews of superintendent candidates. The boss of the candidate from Green Bay had once been a lobbyist.

John Magas, our newly hired superintendent, mentioned this in both rounds of the interview process. He referred to his boss’s lobby experience as something he valued and had learned something from.

Not many years ago, being a former lobbyist would not have been such a glittering gold star on the resume of a superintendent. Lobbying state government, however, is increasingly becoming part of doing business (and another taxpayer burden) for school districts and other forms of local government. In both tiers of the interviews, our school board questioned candidates about their experience “working with legislators” and “legislative platforms.”

The Minneapolis Star Tribune wrote about this lobbying trend in its March 3, 2016, edition: “The lobbyist of the public imagination is decked out in Gucci shoes and a bespoke suit, arguing on behalf of a corporate behemoth or powerful labor union. But (these days) plenty of lobbyists work for slightly less glamorous clients: the cities, counties, school boards, watershed districts and other government entities that spend millions every year lobbying the Legislature. In other words: Government lobbying government.”

Our public school district hired a lobbying firm last year. ISD 709 hadn’t had a lobbyist in the Minnesota capital for about a decade. If memory serves me correctly, the last lobbyist was making about double a teacher’s salary plus a per diem for meals and lodging. His position was axed when the budget started taking a nosedive under Dixon’s massive mismanagement.

ISD 709’s budget is still in recovery mode, after the folly of the Red Plan, but precious pennies have been reallocated for a lobbying presence during the state’s legislative sessions. The school board hired a firm called the Costin Group. One of the lobbyists from Costin, working on behalf of our school district, is prominent DFLer and former city councilor Jeff Anderson. My problem with lobbyists is that they are just pr/sales people. After last year’s legislative session, Mr. Anderson gave the school board a “report” in which he declared: “All of this is falling down on you from above.”

In other words, a DFL lobbyist sent by a DFL-dominated school board to lobby DFL legislators produced a closed loop of the same story: All of ISD 709’s fiscal problems are due to failures from the State of Minnesota, and none of the mess is due to poor local decisionmaking.

The problem with this manufactured story is that it hides real problems under a cloak of victimhood and stymies accountability. Anderson and his partner, Gary Cerkvenik, from the Costin Group, were part of the team that came up with the idea to tear down Central High School and borrow a boatload of money against the district’s maintenance fund to put up another building for Administration. The Costin Group lobbied DFL legislators at the start of this legislative session, and succeeded in getting bills moving in both the state Assembly and Senate.

When the deliberative process of our government boils down to a DFL-DFL-DFL “information” loopthe-loop beginning with the school board chair not even reading the resolution in the boardroom – where is the check-and-balance? Who in our local leadership is really looking at this idea – an extension of the failed Red Plan – with a jaundiced eye and asking any question other than the same question that dominated the Red Plan process: “How can we shove this thing through?”

Taxpayers are paying for government lobbyists to lobby government, but are taxpayers really the beneficiaries of their lobbying efforts? The main purpose of lobbyists is to convince government to spend more money. Lobbyists also try to convince government to spend money differently – to prioritize spending and channel resources to propitious missions, such as educating our youth. The problem still comes down to properly vetting the proposal our salesmen-lobbyists are pushing, however, and making certain it will produce the claimed results.

Duluth should have learned one hard lesson by now: If a massive investment in
educational facilities fails, that failure will actually HURT real education in the classroom.

Lobbyists’ first cousin: consultants

The American Association of School Administrators (AASA) has an article
headlined “The Consulting Boom” on its website. The article examines the recent trend to hire management consultants in school districts: “Schools seem to be increasingly following the business world’s lead and buying expertise when they need it. And consultants in turn are keeping close watch on a potentially lucrative market – a market that includes more than the traditional superintendent searches, workshops on classroom discipline and the latest curriculum trend or help with finances…”

The article quotes from the executive director of the Yankee Institute for Public Policy Studies: “Consultants are hired with an agenda in mind. And given their need to be hired – and stay hired – their findings can drift toward the conclusion that school districts are looking for. What that results in is year after year of giddy good news.”

The author of the article, Donna Harrington-Lueker, points out that “many outside experts (being hired by school districts) are also former insiders – superintendents, principals, technology directors and others. And some (administrators) are wary of the closeness of their connections.” She quotes a superintendent from Strafford Mo., who expressed his viewpoint on this consulting boom in blunt language: “I see it as a form of prostitution. They’re trading on their past and their connections.”

The biggest problem with fast-talking expert consultants is that they can so easily bowl over school boards. Former Board Chair Ann Wasson (one of the Red Plan’s biggest boosters) declared that “the experts and the facts are my leading force to the desperate need of the plan for our district,” and waxed in the boardroom about the “hours and hours and hours” that had been put into the plan by “professional people with degrees and backgrounds in numbers and how things work.”

Most of the “hours and hours and hours” invested in the Red Plan were spent conjuring up a scheme to push it through and sell it. The taxpayers of Duluth were shepherded to the fleecing barn by people who truly were expert at “how things work.”

Predictably, a huge expenditure of our city’s wealth only managed to make our schools more unequal. The last time I checked the school-ranking service, Duluth East was ranked 66th out of the 494 high schools in the state of Minnesota, while Denfeld High was 318th. Out of 518 middle schools, Ordean East was ranked at 56, while Duluth’s western middle school was ranked 387th. Congdon Elementary was 22nd out of 847 Minnesota elementary schools, while Stowe Elementary, on the far western edge of the city, came in at a bottom-scraping 655.

Does anyone in Duluth still believe we were well advised by these highly paid experts?

Marshall Helmberger, owner of the Timberjay newspaper in Tower, Minn., called Johnson Controls’ hustle in the St. Louis County district “a classic case
of over-promise and under-deliver.”

“So why the continued push for consolidation?” Helmberger further asked. “In many cases, it’s simply conventional wisdom. When you’re told something frequently enough, you simply accept it as true. But I suspect there’s more to it than that. In many cases, consolidation is pushed by special interests, such as consultants, engineering fi rms, large contractors, and the building trades, who are often tapped for studies, strategic plans, and large capital projects that frequently go hand-in-hand with consolidation efforts.

“School districts are like enormous ATMs for many in the private sector,” Helmberger continues, “and that’s particularly true as school districts and the challenges they face grow larger, requiring ever more advice from outside ‘experts.’ These purported experts are often well connected politically, and they’re happy to foster the conventional wisdom surrounding consolidation and its supposed benefits. It’s hardly surprising that their efforts influence the thinking of legislators…Consolidation, in effect, has a large and powerful constituency – and the ‘kids’ don’t have much to do with it, despite the rhetoric you might hear.”

A lucrative market

The same consultants seem to cruise around the school district circuit, getting hired over and over, sometimes as other firms. The consultant the school board hired a few years ago to help “tailor” its levy referendum questions and sell a tax increase to the public was the same person, in a new firm, who did the Red Plan survey.

That survey was a textbook example of a consultant being hired with an agenda in mind. Its findings definitely drifted toward the conclusion Dixon and his supporters were looking for. The most egregious – patently false – promise embedded in the survey was the claim that “the cost of each proposal would range between $257 to $271 million – but, due to savings and sales of unused property, almost half that total is already paid for.”

In its 2007 Review & Comment document, the Red Plan’s corporate expert, Johnson Controls, brayed to the State of Minnesota: “Residents support the Duluth Public Schools issuing bonds for the facilities plan, if the District uses the plan’s cost savings and property sales revenues to reduce the total cost of the plan.”

It was all nothing but a slick sales job, and should have made our school board more – not less – leery of fast-talking experts.

Another consultant brought into our flawed consolidation process was the demographer who produced the study used to determine school placement and boundaries. Members of our school board have pointed to the St. Paul district’s huge fiscal deficit as proof of a problem with state funding, but as Superintendent Gronseth has stated in the boardroom many times, “Enrollment is the base of the budget.”

The same demographer who blew it here, blew it in St. Paul, as well. The following is an excerpt from an article published April 12, 2017, in the St. Paul Pioneer Press: “St. Paul Public Schools (district) is preparing for a substantial decline in enrollment, just two years after an unduly sunny report. In January, 2015, (the Red Plan’s) demographer predicted the (St. Paul) district would gain about 2200 students in the coming decade…” But, now, in actuality, the reverse is coming true and “the district expects to lose 2200 students in the next 10 years, in addition to the 1,000 St. Paul lost in the last two years. The district should (theoretically) have 33,000 students by
2016, (the inerrable demographer) told the Board Tuesday. Her previous report (from just two years earlier) projected 38,200 by 2024.”

A month earlier the newspaper reported: “The St. Paul Public Schools will consider an early retirement incentive and an array of program cuts to close an expected $23 million budget deficit next year.”

Gronseth is right on this one: Lack of students equals lack of money. An inaccurate
enrollment prediction does no good.

A new attitude needed

What I’ve wanted for a long time is a house cleaning of all the experts who misled us. I was actually hopeful when I saw a new financial adviser listed in the school board’s agenda, a while back: R.W. Baird. What looked like something new turned out to be more of the same. A managing director at Baird previously worked for Northland Securities, the firm that underwrote most of the Red Plan bonds.

This individual and his wife (who has worked as business director for a couple of school districts his companies have done business with) have had more than one brush-up with unhappy taxpayers.

In a Feb. 2, 2017, article headlined “Stillwater school officials can’t explain financial advisor’s six-figure payday,” City Pages exposes the fact that a contract with R.W. Baird lists this consultant as the “exclusive…advisor,” but no documentation can be found verifying a competitive bidding process for the contract, or specifying the $115,155 fee wired by the Stillwater district to the company.

“It seems to  me a person ought to be able to find this document showing how much (Baird) was supposed to get paid,” a board member from Stillwater told City Pages.

The City Pages article is on the internet. At the minimum, the way business was conducted in a couple of other Minnesota school districts was sloppy – extremely poor judgment about appearances.

This financial consultant – Michael Hoheisel – played a role in the Red Plan and is now a member of the group of advisers who conjured up an extension to that misguided investment: District 709’s terrible scheme for the Central property. I think it’s time our school board starts taking a closer look at the “experts” it keeps blindly following.