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The district has sold Morgan Park school! After expenses, the sale, approved by the Board, didn’t clear a penny! In fact, it (we) lost money! This whole property sale experience is bound to go down in the history books as one of Duluth’s most sparkling civic moments!
To begin at the beginning, Morgan Park and Rockridge schools were supposed to sell as a package deal. Morgan Park was built in 1916 and would probably stand firm through a F5 tornado. As the property purchaser, Aaron Schweiger, put it, “That building is steel, concrete and brick. It’s a beautiful building and it’s a shame to rip it down. They don’t build them like that anymore.”
It should have been evident from the onset of the Red Plan that buyers were not going to be lining up to purchase the district’s “excess property.” The schools were touted as valuable assets, but they are proving to be an impediment to selling the property. The buildings are just too hard to renovate for other uses and they’re extremely expensive to tear down. The district’s Facility Manager estimated the cost to tear down Morgan Park at $750,000, and even that considerable price tag turned out to be a few hundred thousand off. Dumping these schools has been a predictable loser for Duluth.
Taxpayers dumped a lot of their hard-earned money into Morgan Park school over the years. A gym and kitchen were added in 1939. A new office and media center were built in 1966. A beautiful, six-lane swimming pool was added to the school in 1976. A new music room was paid for by generous Duluthians in 1983. An elevator was added (busting through nearly impenetrable walls and flooring at no small expense) in 2000.
The original asking price for Morgan Park school was $500,000. The Duluth News Tribune reported the original price for the property as $465,000, but the paper forgot an adjacent, undeveloped lot that had a conveyance attached to it. The property had been given to the school district by the county, but had to be returned to the county if Morgan Park ever ceased to be a school. The Red Planners apparently didn’t know the terms of the deal with the county, and originally counted $35,000 for the lot into the total asking price.
The other half of this loser deal--Rockridge school – will now go back on the market. Rockridge was built in 1965, which may seem like a long time ago to thirty-something millennials, but multi-million dollar public buildings should have a useful lifetime of more than 50 years. Just 23 years ago, taxpayers dumped a sizeable chunk of change into the building, to add more classrooms.
Rockridge is an especially beautiful school. A number of educational organizations were interested in purchasing it, but the school board would not sell to competitors. After running up a half billion dollar bill on “21st century facilities,” the Board worried publicly that it would be unable to compete. A little understood factor that also played into this decision was the influence the teachers’ union has on Board decisions. The school board of ISD 709 is essentially an auxiliary employee association. An inordinate number of Board members are current and past district employees, heavily influenced by all the bargaining units in the district, especially the teachers’ union. The teachers’ union does not want nonunion competition fostered in any way in Duluth.
The original market value placed on Rockridge in the Red Plan’s Property Value Assessment was $875,000. The original value for both properties added up to a total of $1,375,000 that was supposed to go into paying for the Red Plan.
Morgan Park is being sold separately now, for $100,000. The property has been sitting empty for three years, during which it has been costing the district a minimum of $50,000 a year for maintenance and utilities, adding up to at least $150,000. Which makes us about $50,000 in the hole. Another ten or twenty grand will be lost in the closing costs. The deal is a real lemon, not to mention that another building is going to be hauled off to a landfill.
A total of five schools – Laura MacArthur, Woodland, Lester Park, Piedmont and Morgan Park – will soon be decaying detritus in a landfill. The heap of Red Plan waste will likely also eventually include Central High and the two Secondary Tech buildings. That will raise the total to eight schools, along with five swimming pools! It’s almost breathtaking how much wealth Duluth is SAVING from the Red Plan.
I was naive enough to hope one of the five swimming pools would be preserved for community use in the Lincoln Park school, which was sold for a whopping one dollar. Recently, however, the annex containing the pool was quietly torn down and hauled off – where else? – to a landfill. The Red Plan’s Swimming Pool Search-and-Destroy mission is now officially a total success.
The waste from the Red Plan is an embarrassment. It makes Duluth look like a bunch of fools. Not only are we tearing down a number of perfectly good schools and throwing them away like drunks tossing beer cans, we’ve been spending big bucks to speed up our apparent quest to set some kind of landfill tonnage record. The last figures I have from the acquisition expenses of the Red Plan show that we’ve spent $7,565,820 to buy up 55 buildings. Most of them were torn down and hauled off to landfills (and removed from the tax rolls), in order to make room in our fair city for this massively misguided boondoggle.
Some movers and shakers have told me to stop harping on the Red Plan, because “it’s all over now.” First of all, that statement isn’t even technically true. The Board just approved $5.3 more spending on the Red Plan. Two of the buildings – Lincoln Park Middle School and Piedmont Elementary--have no more phantom Red Plan funds available, but thousands of dollars of Red Plan work still needs to be done. According to the district’s finance department, “the remaining project scope (all the crap that was supposed to be done with the Red Plan, but wasn’t) will be addressed by use of annual funding sources.” In other words, GET READY DULUTH TAXPAYERS! The Board is going to hit us again with its non-voter approved alternative facilities taxing authority next December. Other Red Plan projects left undone in this half billion dollar project (which supposedly left all our schools “new or like new,)” have already been shifted to the taxpayers, such as $714,000 for a new tile roof on Congdon School and a couple hundred thousand dollars to tuck point brick walls on the Myers-Wilkins School.
Another seamy subplot of Red Plan Without A Plan is that the school district’s facilities management department has been operating out of the Central campus. If and when the Central property ever does sell, the department responsible for district facilities will have no where to hang its collective hat. In other words, the long-range facilities plan will leave the facilities department with no home. A warehouse that was supposed to be sold on Garfield Avenue is now going to be upgraded, so it can function as the department’s headquarters. The taxpayers are going to be on the hook for the money once promised from selling the Garfield Avenue warehouse, and will also have to pony up thousands to make the warehouse comfortable for the Facilities Manager and his staff.
Just a few more bills, and THEN the savings will start.
The Long-Range Facilities Status Report from the 1/12/15 Business Committee meeting verifies the wonderful job done by the construction manager, JCI. The list of work that was supposed to be done in the schools, but remains unfinished, is extensive. 29 projects in the two high schools alone, such as “expanding and improving vocational spaces and equipment,” add up to a grand total of $1,334,820. As has been the case from the beginning, everything is so screwed-up and complicated it is difficult to track where all the money is coming from and going. The Red Plan was originally supposed to done three years ago, but in no way is it accurate to declare the Red Mess all wrapped up.
Sardines are good for you!
Even if it were physically done, the Red Plan would still require some attention. If you’ve built a house you can’t afford, and made all kinds of errors in the financing, and the mountain of debt is hurting your budget, forcing you to reuse your kids diapers and feed them sardines for dinner every night, it isn’t over just because you built the house. To say it’s all done, just because you’ve erected your posh mansion, is practically juvenile thinking. As any grownup knows, the hard part is paying for your new, extravagant pad.
Accountability is essential for good government. If we, this city’s citizens, want good government, we have to demand good government. We can’t just say, “You, are elected representatives, arrogantly ran us over and really f--ked this up, but, oh well, I guess that’s the way it goes. It’s all over now. Let’s just bury it and forget all about it.” We have to hold government officials accountable for their decisions. If we don’t hold officials accountable when they’ve made bird-brained moves with our money, we will never get good government. And good government is paramount, especially in a world where resources are going to tighten and needs are going to continue to grow. Nothing good can come from bad government, including an efficient and effective public education system. Bad government will produce foolhardy train wrecks like the Red Plan.
About three decades from now, Johnson Controls is going to come back into this town and say, “Jeez, Duluth, why don’t you have any schools in the center of a city thirty-five miles long? You need to build some brand-new 22nd schools, and have we got a deal for you! A once-in-a-generation opportunity! We will charge you full price on all these facilities. In fact, before we’re done, we’ll throw out some of our promises and jack the price by millions, but you’re going to SAVE so much money (though, mind you, not contractually guaranteed), our plan is really half free, already half paid for!”
If we, the current citizens of this city, don’t get some honest admission of failure and accountability today, some future bone-headed Board will say, “Golly gee, duh! That sounds really good! It’s such an obviously fantastic idea, we don’t even need a vote! Let’s just do it!”
The black hole
$3.5 million is being appropriated annually out of the district’s General Fund to pay for the Red Plan. The withdrawal is supposed to be tapping into a fountainhead of revenue from “the sale of unused district properties, utility rebates (and) general fund operational savings…” Clearly property sales are not working out and the State Auditor’s Office concluded the savings projections were “skewed.” Utility rebates were always just a pittance. The district keeps pulling the money out unabated, with no adjustment to reality, as though all predictions from Red Plan’s crystal ball have happened precisely as forecasted. This withdrawal from the General Fund is one of three major fiscal problems besetting the public school district.
Another problem is that the Board has had a ten-year, reckless attitude towards contract negotiations. The Board has been rolled ever since Dixon came to town. Dixon even talked the dodos controlling the Board into eliminating the Board’s negotiating committee. The whole Board was now declared the committee, with no one from the Board actually in the room during teacher contract negotiations. Dixon of course wanted to hand out as much candy as he could to keep the teachers’ union from revolting from all the disruption and damage (including massive layoffs) from the Red Plan. The reigning Board Chair at the time argued: “We don’t need to know every detail! We set the parameters!” It was like declaring: “We don’t need to guard the bank! We told the robbers they could only take $10 million!”
My hope is that the Board member who did sit in on the last contract talks – Rosie Loeffler-Kemp – will be the chief negotiator for the other side if I’m ever hammering out a financial agreement. I can then look forward to spending my retirement in the Caymans, while the poor bloke who negotiated a binding agreement with me lives out the rest of his or her years in a cardboard box in the ghetto.
It was revealed during the last Business committee meeting that the district’s payroll will jump another 4.7% this year, from $57 to $60 million! I don’t begrudge teachers and other hard-working employees more pay, but the district for years has been caught in a circular problem. It keeps paying out more money for salaries and benefits, and then has no money left to staff the classrooms and other parts of the operation adequately. That $3 million jump is just for payroll. It doesn’t include benefits or retiree costs. The only people whose jobs appear to be bullet-proof in this new economy are corporate CEOs and some public employees. If a business or a government organization is struggling, payroll needs to be controlled until finances are back in order.
The teachers’ long term self-interest has actually been eroded by salary hikes. I know this is unrealistic, but if the teachers’ union had negotiated its raises, then said, “You’ve committed this money. We’re going to forgo this raise, however, so you can afford to hire more teachers and finally get our class sizes down, so we stop running ourselves ragged and can finally compete,” I would have been the first to applaud them and support an even bigger raise for them down the road.
Again, the district is caught in a circular problem. Because it can’t channel enough money towards lowering class size and other educational improvements, it has been suffering a perennial lost of students – the third major reason it cannot get its financial house in order. Families are growing unhappy and restless because some public schools are underperforming, and they’ve lost faith that the self-destructive, dunderheaded Board will ever doing anything to deal with their complaints.
The district lost 340 students again last year – another $3 million in lost aid. If you lose $3 million in aid, jump payroll $3 million and yank $3.5 out of your General Fund every year to pay for a half billion dollar capital project, you’ve created a black hole. The Red Plan numbers are skewed and other systemic problems are draining the district’s revenue. At the rate the district is losing students, it could easily drop a thousand more in the next three years, especially with a major competitor soon opening the doors of a new high school.
How in the world did we spend so much money to position ourselves so poorly in the educational marketplace? It’s a legitimate question, and everyone in this city should be asking it.