St. Paul school district puts hold on building projects

Major renovations of St. Paul's public schools are being put on hold after the first wave of the projects came in tens of millions of dollars higher than initially projected.

A monthslong review of the district's facilities-management practices found the blown estimates were due largely to changes enacted after projects were underway, not overspending.

"You got more stuff than was originally planned," Chappell Jordan, of the Dallas-based civil-engineering firm Jacobs, said Tuesday. "You changed the scope."

Jordan was part of a five-person review team assembled at the direction of Superintendent Joe Gothard, who said in May he wanted to rebuild public trust in a five-year, $484 million facilities plan that was launched in 2017 with makeovers of nine schools and construction of a new RiverEast Elementary and Secondary.

In remarks to reporters and then to school board members during their meeting Tuesday night, Jordan said district officials should have outlined the potential "risks," or additional costs, the district could face as it renovated buildings as old as 129 years.

Board Member Steve Marchese said he, too, found it troubling that "things about risk were not including in the initial estimates." The facilities plan is ambitious and necessary, he said, but board members should have been told how individual choices could affect commitments promised elsewhere in the community.

"There was an undermining of our ability to do our job," he said.

As for the work that has been done, Mike Vogel, a retired South Washington County School District administrator who also served on the review team, said the study found no excessive payments to contractors: "It was fair value for the work that was performed," he said.

The review, however, pointed to the need for better coordination between the district's facilities and finance departments, as well as the hiring of an experienced capital construction manager to take over implementation of what had been envisioned as a 10-year facilities plan.

Tom Parent, the district's facilities director, who has been the public face of the program, still has that title, said Cedrick Baker, the district's chief of staff. He said the issues that arose with the first wave of projects were systemic in nature and not the work of a single individual.

Gothard told board members it was too early to say what he would recommend on the personnel front. He also said he could not say whether the sequence of the next round of projects will remain intact. The priority now, he said, is to ensure "we're doing it right."

Unlike most state school districts, St. Paul does not have to win voter approval to issue bonds. The district's facilities plan also differs from traditional bonding projects approved by voters. Budgets, in those cases, are fixed. St. Paul, on the other hand, can make adjustments if the scope of individual projects change.

The owner of a median-valued home — $151,500 at the time of the program's launch — pays an additional $30 per year in taxes to cover the facilities costs, an amount that Baker said Tuesday he does not expect to see changing for the "foreseeable future."

The review team's report pointed to the district's difficulties in handling a facilities budget that has risen from $30 million to now $112 million a year.

Jordan said that the district should have built in a 40% contingency for unexpected costs when it began work on the first phase.

A makeover of Humboldt High on the West Side initially was expected to cost $26.8 million when it was in the conceptual stage. But it rose to $48 million in a 2018 update, in part because of new educational moves involving special education plus a need to replace mechanical systems, Jordan said.

He said the district also failed to account for the costs of furniture, fixtures and equipment.

Still to come is an accounting of an additional $5 million in expenditures for work on the Humboldt and Como Park High and American Indian Magnet School campuses, Jordan said.

He recommended the district create a master schedule of projects with potential costs updated, and it regularly post information as invoices are paid.

No timelines were given on when work might resume.

Despite the difficulties, Gothard said people should be mindful of the transformational nature of some of the building projects.

"It's amazing how you forget about all this," he said, referring to the concerns that have arisen, "when you're cutting that ribbon."