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“Because we actually have the tax-ing authority that we need in place to spend that $48.5 million…” Bill Gronseth began to expound during a Jan. 29 special school board meeting, a few months before leaving town.
Our former Super continued to wax on about a taxing authority the school district could use to address deferred maintenance on Old Central. He explained to his school board acolytes that the $48.5 million “would be long-term facilities maintenance money. We’re looking for alternatives that would cost less and do more than we would be able to do with the $48.5 million for this building.”
The CFO, Kathy Erickson, chimed in: “That was really our charge. That was one of the important things that we felt, as a group, that we wanted to do: that we wanted to be fiscally responsible and be good stewards of taxpayer dollars.”
Erickson went on about how the $48.5 million wasn’t the best expenditure of money, because it wouldn’t even address all the needs of the old icon of Duluth architecture: The money wouldn’t do “anything new or improved (for education.) That ($48.5 million) is just doing deferred maintenance work.”
Gronseth picked up the conversation again and kept the spin going, outlining how past failures could be transformed into a success story: “That (the need to spend even more than $48.5 million in Old Central) pairs with the need for doing repairs or rebuilding transportation. We’ve heard a lot about that (transportation) building.”
Bless our visionaries
In 2010, $11.6 million worth of work was erased from the Red Plan, including a $2.5 million new transportation building and most of the maintenance work originally scheduled for Old Central.
One year later, $19 million more taxpayer burden was added to the cost of the plan, with none of the erased work reinstated.
During that meeting, held on 6/27/11, our government mimicked what happened on 1/29/20 – $34 million was on the table that night. Well into the meeting, two resolutions popped up out of thin air. Chair of the board, Judy Seliga-Punyko (ISD 709 teacher, union- and DFL-endorsed) went on the record in the Zenith News two and a half months later (9/13/11) and declared that the additional millions she and her allies had rubberstamped “is not costing taxpayers.”
Payments on the levied bond from that meeting ironically started this month. Taxpayers began paying 84% interest ($10,793,672.85 on a $12,801,327.15 bond,) nearly a decade after the 2011 rubberstamping party – orchestrated on the heels of another scheming Super slipping out of town.
Recent boardroom government has been déjà vu all over again.
On Jan. 29, with $31.5 million on the table, a resolution again materialized during the meeting, instead of three days before, as it’s supposed to.
Chair of the board, Jill Lofald – another ISD 709 teacher, DFL- and union-endorsed – didn’t even read it before declaring full support for it.
This plan is nothing but the Red Plan extended and reprised, on every level.
Dixon got 3 votes for a second resolution on 6/27/11, to add ANOTHER $19 million cost overrun to the massive scheme he’d initiated. That additional $19 million would have effectively reinstated all the work scope from the original plan.
Now, for a mere $31.5 million more, we’re finally going to get the Red Plan all properly finished up. Thank you, Bill.
Keith is undoubtedly busting at pride at what his protégé came up with: careening those of us still living here further down this dead-end path, while both of you have gotten far away from the carnage.
CFO Erickson told the PTA board: “Because we’re trying to become a fiscally sustainable district, these decisions are very important and very critical.”
The critical state of ISD 709’s finances is precisely why we shouldn’t do what she was proposing to our rubberstamping representatives: repeat history and extend the foolish Red Plan. This new investment will raise the total bill for the plan, with bond interest, to more than half a billion dollars, and the taxpayers will have had no vote on any of it.
First, the financing
In making her pitch to our PTA-adjunct school board, the CFO used the same language from the sale of the original Red Plan: “right-sizing ourselves to our need.” The district is again promising us, if we spend these millions, it will be set up “for the next 50 years.”
“Right-sizing” was a key phrase used repeatedly in justifying the Red Plan’s borrow and spending extravaganza.
Just look at how “right-sized” everything turned out to be: The $50 million dollar copper-sided palace built on the mountaintop in Wheeler Park is little more than half full, while Congdon Elementary is busting at the seams. Nothing turned out to be “right-sized,” including the bill, which was supposed to be half paid-for through “savings” and the sale of “excess” properties.
The new Central campus, with the STC buildings included, was originally listed at $13.7 million. The district has since dropped the price to $7.9 million.
The Red Plan’s financing scheme is a colossal failure. Erickson pointed that failure out to the successors of the same group – DFL- and teacher union-endorsed – who failed: “We have it listed at $7.9 million, and we do not at this time expect – we have not seen interest at that high of a value.”
We were supposed to make $28 million from the sale of these properties and we haven’t even made $4. Now, rather than making money, the plan is to raid the maintenance fund and toss in another $31.5 million.
Give district leaders credit for political chutzpah. It certainly takes some to spin this as “savings.”
During a Business Committee meeting two and a half years ago (May 2018), Dave Spooner, the district’s Facilities Manager, articulated a very trenchant warning that seems to have just flown over our representatives’ heads: “It’s important for everyone to note that the (Red Plan) buildings were constructed between ‘08 and ‘13, and we’re (now) 10 years out from the first buildings, and we may have another 10 years. We kind of have a grace period – another five or 10 years – and once that (our grace-filled existence) ends, all the buildings will need work in a five-year period, and that’s going to be a huge number, so that’s important to note.”
One of the many flaws of the Red Plan (pointed out to deaf ears, years ago) was that all the buildings were being made “new or like-new” in a short span of time. This meant that it was virtually impossible to stagger out a sensible maintenance schedule. Tenty or 30 years down the road, about the time we finally got the bonds paid off, our wise leaders had set us up for a huge wave of maintenance.
There is still no plan in place for that expense. The maintenance levy is barely more than half of what it should be to protect the investment that was made (the overall tax levy has spiked so high, they’re afraid to raise it any higher,) the district has already been borrowing against it for years and has been paying more than a million dollars of wages and salaries a year out of it.
Erickson told our amiable PTA/school board that we were selling Old Central because we couldn’t afford the $48.5 million for repairs. Our school district doesn’t have $48.5 million.
What it now has, by using the maintenance fund, is the authority to force a tax onto the public. If the district is going to use that authority (which it fully intends to), it actually makes sense not to use the money on Old Central – a building that still wouldn’t be upgraded for modern educational use.
We are better off selling the historic structure to a reputable entity willing to spend $48.5 million, and then redirecting tax money to prepare for a coming maintenance crisis.
Instead, our district plans to (once again) exploit the maintenance fund by raiding millions more out of it and using the money for something it is not intended to be used for: new construction.
The phony argument is that, if they sell Old Central, and dump the $48.5 million liability, they can use the $48.5 million as a “baseline” for any further spending, and blow it any way they want. Our wise leaders in fact claim they are actually “saving” us $17 million.
Other maintenance expenditures that need to be met are not going to go away. The taxpayers are going to be on the hook for it all, sooner or later.
I repeat: The entire $48.5 million should be saved for maintenance. Duluth citizens should approve any spending for new construction with a bonding referendum.
Not a single Red Plan building held to its original estimate and the Central campus, up on that rocky hill, is a particularly tough place for construction. It is unlikely the district is going to accomplish what it claims for $31.5 million.
Staying within budget has been made even less likely by the fact that construction and demolition costs have shot through the roof (no pun intended) since COVID-19 hit. Just like with the Red Plan, a suspect figure was thrown out to our hapless representatives, no questions were asked, and no adjustment is being made to reality. The DFL-,union-endorsed boardroom dominators (who have been inept in protecting the public’s interest in these property/finance matters since Dixon came to town) will likely find themselves rubberstamping change-order after change-order again, much to the taxpayers’ chagrin.
Each board member who votes for this when it comes up for final approval should also sign an agreement holding him or her personally responsible for any cost overrun. If our so-called representatives put their own finances on the line, I think they would sit up straighter and ask a few more questions.
During the special meeting held on 1/29/20, they performed their duties even worse than their predecessors, because their predecessors did not have the advantage of hindsight.
This raid on the maintenance fund is being used to levy for the project without voter approval. That is the only reason the Old Central and New Central projects are linked.
The co-author of the statute that was exploited to bypass democracy during the Red Plan was quoted this way in the News Tribune: “The school board in Duluth abused and misused the law to move ahead with its Red Plan.”
This new hustle is another underhanded exploitation of the system that has only one real purpose: push through another over-the-top scheme and deny Duluth citizens their birthright to vote on what happens to the Central property, the crown jewel in the center of our city.
The Project Manager contract for this multi-million dollar new investment in the Red Plan has already been approved by the school board, before the required public meeting is even held. That meeting, scheduled for March 2, will be nothing but another sham of the democratic process, sort of like a condemned man being granted 3 minutes to address a jury that’s already decided from what tree he should be hung.
During the 1/29/20 meeting, Chairwoman Lofald, who didn’t even bother to read the resolution, proclaimed how “impressed” she was with “the whole night, tonight.” She also said: “A courageous board knows the courageous thing to do, the right thing to do…,” adding, for good measure: “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.”
It didn’t require an expert Court TV jury watcher to pick up on a predetermined verdict and see that any troublemakers daring to gripe about another stolen vote may as well be muzzled before being hung.
Our school board is once again trampling upon the democratic principle of “consent of the governed.”
The real “courageous thing” is engaging democracy, not conjuring up another scheme to go around democracy. If democracy had been exercised properly, and dissenting voices had been listened to during the Red Plan’s decision-making process, this whole mess in the center of our city wouldn’t even exist.
Quite a meeting
The Jan. 29 meeting exposed the flaws of the one-party government we have in Duluth. In no way was this plan properly vetted.
I asked Gronseth afterward about the cost of renovating New Central and using it, instead of tearing it down and building new. He responded to my question with only one specific detail: “The HVAC system is hanging by a thread.” When I questioned him further, all he added was: “It’s shot.”
But what does that really mean? How much money would it actually cost to upgrade the system? Again, who knows? Certainly not our representatives on the school board.
Essentially this plan completes the educational void created by the Red Plan in the center of our city. No students will use the Central campus. Administration and Transportation (with all the district’s buses) are going to be housed in new buildings. Facilities Management will occupy a former Secondary Technical Center building.
The existing high school is going to be torn down. Duluth’s Democrats (who often profess their love for the environment) completely control the boardroom. Not only have they all become mute; they’re the ones actually advocating to commit an environmental crime: to tear down a 228,826 sq. ft. building, barely 50 years old (with a replacement value of $40-50 million,) and haul it off to a landfill.
After demolishing a high school it claims is too big, the district plans to start leasing more classroom space in the center of the city. Leasing space to fill the educational void is not going to work for 50 years. It won’t be long before taxpayers are on the hook for new central school buildings.
School boundary discussions (spurred by the Red Plan’s failed demographic projections) are being kept partitioned from this decision about the Central campus. The tone-deafness of this plan is off the charts. Instead of coming up with a plan and process that would heal public relations, our brick of a board is gearing up to rekindle long-standing grievances.
“All of this comes with a funding challenge,” CFO Erickson (who lives in Two Harbors) continued spoon-feeding the school board, on January 29 last year.
“Other than long-term maintenance revenue, there isn’t a funding source that’s dedicated for this to happen. So, what our thought process was (rather than finally learning how democracy works and going to the public for a vote on a bonding referendum) is (instead) reaching out to the legislature to help us (find another loophole in the system.)”
Erickson described it as, “looking for ways to create authority.”
There is only one “funding source” here, and that’s the local taxpayers. The only real question about the financing is whether or not that funding source – the public of Duluth – will have a vote on another big building project.
During the 1/29/20 meeting, board member Oswald (who now appears to be selling out on the issue) questioned the wisdom of again stealing Duluthians’ birthright as Americans: “Taking away the public’s right to vote on their taxes is an extremely harsh thing to go over in this community.”
Chair Lofald responded: “Trying to go to the public for things is not always easy.”
Since the Red Plan was forced upon our town nearly a decade and a half ago, Duluth’s citizenry has been treated shabbily – repeatedly boxed out and ignored, denied even a vote. Democracy is clearly not always easy for our school board to do.