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Robert Aho sent this column to the Trib. They chose not to publish it. As Robert says: " . . . The DNT was not interested in publishing this in column form, nor have I seen any reporting on the conflict of interest and fee issue, although I gave them that information.. ."

The Reader Weekly published it today.

Red Plan Outrage

By Robert Aho

There is no doubt that the existing buildings owned by the Duluth Public School District have some maintenance issues that need attention. I am a strong advocate for fixing and maintaining these buildings, many of which are historic treasures. I have also reviewed what needs to be done with these buildings, and the list is long. The facilities manager for the school district certainly has his work cut out for him. Tragically, however, simply maintaining what we have is not on the table for discussion with the Red Plan.

In casual conversation this summer, with guests from out of town, I was asked to explain slightly reducing the size of the school district infrastructure--and spending a half billion dollars to do it. This, of course, was met with thunderous laughter. They all asked me who was selling us this bag of loose nuts? It doesn’t take a rocket scientist to see how ludicrous this is.  

I told them that at the heart of this Red Plan is a company that mainly manufactures and installs temperature controls for buildings—more laughter. They are not planners, nor are they architects or other design professionals. What they are is a Fortune 100 company that is brokering a deal that greatly favors themselves. This would not happen if the Duluth Public School District simply directly hired their own architects from the start. Architects recommend, per their licensing requirements, the best value for their clients. It is the architect’s professional duty to make honest recommendations to their clients, as an advocate for their construction and design needs.

In the case of the Red Plan, Johnson Controls, not the school district, hired the design professionals as part of their own package deal. This means that it is the duty of the architects to make recommendations to Johnson Controls, and Johnson Controls has the right to veto any of these suggestions before the school district hears about them. The school district should have known about this basic flaw in this type of project delivery.

With the first couple of school projects on the Red Plan, Johnson Controls wound up acquiring subcontracts to install products they manufactured. Some of these systems that will be replaced were relatively new. Much from JCI , and the companies it owns, wound up in construction, although this was not made well known to the public. There was even at least one instance in the specifications, the access controls, or various security systems, where there were no alternate manufacturers or installers allowed. This is a huge conflict of interest! It is certainly unethical. In their position of authority, it is easy for JCI to require their own products and installation. The school district should have immediately called this into question.

This sort of manipulation of the project could net the project manager, JCI , an additional $30 million or more to install and provide their own products, based roughly on what we know so far about the project. This will also secure on-going system maintenance contracts for JCI -- another very lucrative element of the Red Plan for them. On top of this, over $55 million in project fees will be collected by JCI —an 18.8% gross return on their basic estimate of the project cost, or 88 people working full time at $100 per hour for 4 years! This is a very lucrative amount of compensation and hard to justify.

By comparison, with schools, architects typically charge 6.2% of the construction costs for larger projects over $50 million in size, this according to nationally published data. Was the school district completely unaware that the fee JCI proposed is simply enormous?

We were initially told by Superintendent Keith Dixon that JCI will collect only 2% of the cost of construction. Then there was discussion of it being 12%. Now we learn that it is actually over 18%, not including service contracts and construction. Is there more? Drip, drip, we keep hearing one drop after another in expensive bad news.

We are being pillaged.

Why on earth does the Duluth Public School District allow this sort of impropriety? Why didn’t the School District restrict JCI to being the program manager and prohibit them from bidding on the equipment they would be manufacturing and installing? We need to be outraged by this.

What the school district should have done was to hire one of the big local architecture firms in Duluth to work directly for the school district. Then the school district should have hired an architect or two in-house for additional project management. This could have led to better overall results at a fraction of the cost. It would have, undoubtedly, led to a long range plan that is actually cost-effective in our stagnant economy.

This Red Plan makes no sense at all.

If you care about Duluth and its schools 
don't put your faith in the Duluth News Tribune
The last word on the Red Plan can be found on Harry Welty's blog:
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You never can tell what you'll find.