Procedural fouls scrap $1.3 million deal
By Marcus Clem
Noncompliance with policy and law has put off, for at least several weeks, usage of a $20 million public education debt plan that voters recently approved.
The St. Joseph School District said that the main $1.3 million contract in the matter can’t stay in place. That’s because members of the elected Board of Education did not participate during interviews of competing firms.
Further, the district did not perform a verbal request for qualifications, or RFQ. In response to a March 1, March 8 and March 15 printed RFQ, S.M. Wilson & Co. of St. Louis, Missouri, and Universal Construction Company Inc. of Kansas City, Kansas, competed in secret bids.
“This is unfortunate, because had they simply read the policy and followed it, they could have avoided that,” said Stephen Hofferber, a local resident who compelled the district to review all of this. “Probably, for the two companies it’s unfortunate because now they each know what the other one bid on it, and any new bidder is going to know that as well.”
The process, including the secrecy of each bid, is carefully regulated to generate the best possible deal for taxpayer-funded agencies. Otherwise, firms would know what their rivals are charging in advance, enabling potential price manipulation.
The district is required by policy and statute to ensure board members are involved, and that the RFQ happens correctly. The district printed the RFQ in the St. Joseph News-Press, but this does not suffice; a verbal RFQ must be given seven days before a notice is printed. As a result, S.M. Wilson & Co. will, if it so desires, have to go through a new competitive bid.
“In an attempt to be proactive so that work could begin as soon as possible after the potential passage of the bond, the district violated a technical piece of the state statute,” the district said in a statement.
All of the money is tied to Proposition St. Joseph School District, which passed at the ballot box by nearly 66% on April 2. Private investors will fund various school improvements, and the district will pay them back plus interest with local taxes, via a 53-cent debt service levy. The levy had already been in place but could have eventually seen major reductions if fewer than about 57% of voters had been in favor of the April 2 bond issue. That will not happen now.
Superintendent Gabe Edgar and Assistant Superintendent Robert Sigrist oversaw the S.M. Wilson & Co. hiring and took responsibility for the violations in emails obtained by the News-Press.
“I’ve communicated with Dr. Edgar on ways to take the proper precautions going forward to make this process compliant with policy, so that errors such as this can be prevented,” Board President LaTonya Williams said.
Hofferber, who has kept a close eye on district goings-on since retiring from the City of St. Joseph, filed for public records on April 3.
Reached by phone on Thursday, Hofferber said he knew by intuition that policy violations had taken place; he made the filings in order to prove it. The district issued its statement a few days later. Hofferber said this is all owed to sloppy decision-making.
“They said they would turn it over, or they would consult with their legal counsel about what steps they needed to take, and apparently the legal counsel said they need to re-do it,” Hofferber said. “Which is unfortunate. I mean, it’s probably the right thing to do now, but it’s unfortunate.”
The afternoon of April 3 saw a 7-0 vote by the school board to ratify S.M. Wilson & Co. as construction manager-at-risk. Had things gone to plan, the company (for $1.3 million in combined fees) would have taken charge of more than $18.3 million, and set to work on a number of school improvement projects.
The construction manager-at-risk role is meant to guard against cost overruns when the budget is constrained by instruments like a bond issue. Once work is initiated, the company is at risk for paying every cost that goes over budget.
The plan is likely to get back on track soon. However, new bids must first come in, interviews with board members involved must be done, and the board must ratify a new construction manager-at-risk contract.
