Oversight Might Be Blind

by Mark Scaramella, September 30, 2010

Valley voters last year grudgingly passed a bond issue worth $15.25 million dollars to fix up our 50-year-old schools. The money does not come without stipulations as to how it might be disbursed.

In theory.

The school board, bolstered by a community oversight committee, will see to it that the money, an enormous amount given the apparent limited magnitude of the project, is properly spent.

In theory.

To set the stage in a way sure to annoy the always self-deluding school persons involved, it has been years since the local school board functioned as a credible oversight entity and, in this county and probably everywhere, oversight committees tend to be see-through collections of rubber stamps.

That's where I, a member of this particular oversight committee, am, as the young people say, "coming from."

The second place I'm coming from is that I want as much of this $15.25 million dollars as is feasible spent locally, and it is feasible given the numbers of skilled workers in this community.

The local school bond construction project oversight committee met for the first time last Wednesday night at the High School. There are eight members: William Sterling, a semi-retired real estate lawyer from Navarro is the appointed chair. Rick Bonner of Boonville fills the position designated to be occupied by a member of a taxpayer organization; taxpayer organizations are assumed to be thrifty and gimlet-eyed on public spending of public money and was elected vice-chair. Other members include George Lee, a retired doctor and hospital administrator from Yorkville; Jean DuVigneaud, former School Board member from Philo; Jeanne Eliades of Boonville, parent; Doug Elliott of Philo, retired engineer; Floriane Weyrich of Boonville, parent; and yours truly.

This group is smart and well-meaning, but already, it seems to me, inclined to go about its oversight task solely on the terms of the applicable Government Code as reformatted by the District’s dubious attorneys into something called “oversight committee bylaws.” We can be sure that these attorneys, already mightily compensated by Mendocino County's captive school boards to provide legal advice, will freely tap Boonville's $15.25 million construction money.

The committee's bylaws are basically a summary of what the school bond section of the Government Code says. They only require the committee to operate in accordance with the Brown Act and other applicable laws, to meet at least semi-annually, and to issue annual reports on the project.

We didn't need a team of school lawyers to tell us that, but already the oversight process has been partly co-opted.

Of course the school board has ultimate authority for the project; the oversight committee does not approve anything.

This project is big — estimated at $15.25 million over as many as seven years, maybe more. Neither the school board nor us, the oversight committee, can be anything less than vigilant.

In 1999 residents of the Mendocino Coast Hospital District approved a $5.5 million construction bond to build an entirely new outpatient facility, a whole new hospital wing and upgrade the entire internal infrastructure of Coast Hospital.

$5.5 million for what might be more work than is proposed for the Boonville schools at $15.25 million.

At Coast Hospital, however, things immediately veered out of control.

The initial bids on the work were too high, the hospital administrator, Bryan Ballard, turned down the bids that were competitive and hired pals of his as “consultants” to manage the job. These consultants, to fatten their own compensation, proceeded to downsize the project so that it would appear to come in on budget. The Hospital had to dip into its limited reserves to finish the project, deploying hospital maintenance staff to do some of the work the contractors should have done to cover up the overruns.

The Mendocino County Grand Jury, in 2007, issued a report pointing out how badly the Hospital's bond was handled. The Hospital’s own internal oversight committee admitted after the fact that the project wasn’t very well handled — as if they were not part of the problem.

Example Two: Construction of Grace Hudson Elementary School in South Ukiah, an entirely new school construction project on the south end of town was originally estimated to be $13 million. A Covelo-based general contractor with offices in Ukiah, Rainbow Construction, got the job, only to belatedly discover literally hundreds of errors in the design plans. When Rainbow asked that they be corrected, and that they be compensated for the extra work involved, the Ukiah school board dithered, not knowing what to do as the architectural firm at first denied that there were any problems with the plans. Rainbow continued with construction because they felt they had a deadline to meet. In the end Rainbow claimed it was owed about $4 million more than the original $13 million because they'd had to incorporate so many changes in the construction.

The Ukiah School District, advised by the same Santa Rosa-based consortium of self-certified school lawyers that advises all of Mendocino County's schools, denied Rainbow’s claim and refused to sue the architectural firm for the money that firm had caused Rainbow to spend.

Rainbow never got any of the $4 million back they said they were out, and a long-time local construction company was put out of business. Ukiah Daily Journal Editor K.C. Meadows publicly and correctly blamed the entire problem on the school board but nothing ever came of it. Most of the Ukiah school board members at the time of Rainbow’s claim were not on the board when Rainbow got the original contract.

Example 3: Willits Unified is currently proceeding with a construction bond project similar to Anderson Valley’s. Willits is using the same bond agent — Caldwell, Flores, Winters out of Emeryville. They're maybe a year or two ahead of Anderson Valley.

According to a recent Willits News article by Mike A’Dair, “[Caldwell, Flores, Winters] will draft and adopt implementation documents, appoint various construction companies to projects, negotiate agreements with architects and construction firm managers selected to participate in projects, and secure California Solar Initiatives rebates. They also will hold initial meetings with the campus site councils from the four district schools slated for improvements.”

Does that sound like a proper bidding practice to you? Have you ever heard of a construction company being “appointed” by a consultant on a government construction project?

Not a peep out of the Willits School Board or their Oversight Committee.

As far as I can tell nobody at the Anderson Valley School District or on the Oversight Committee is aware of this local construction bond history or the many difficulties that can and do arise in major government construction contracts of this size and type.

So far, fortunately, nobody at Anderson Valley Unified has said anything about turning the entire project over to the Emeryville boys. Maybe Boonville is smarter, more wary than Willits, but maybe Emeryville simply hasn't delivered the news that they'll be taking over. "Thank you, rubes, for subbing your big bond out to us, but from here on we'll be driving the bus."
The project should be locally managed and the selection of contractors and the timing of the projects should be done by the School Board, assisted by whatever project staff they intend to hire.

And those project staff should be local.

And the financial people should stick to financing. They should not name the contractors and run the project as they're apparently doing in Willits.

The Anderson Valley School District and the Oversight Committee must ensure that this project is properly managed, that the maximum amount of work goes to qualified Anderson Valley companies and workers, and the Oversight Committee itself should commit to doing more than the minimum required by law to be, ahem, “proactive,” to invoke the favorite cliché of the positive thinkers among us. (Frequency of that meaningless term occurs in direct proportion to public salary: the higher up the secure job and pay ladder you climb, the more often you use it. But seldom do it.)

At last Wednesday’s meeting, after proactive school superintendent J.R. Collins told the committee that he expected us to be “the District’s eyes and ears and assist us on the project,” yours truly recommended that the Oversight Committee take a more active role in the project than the minimum called for by law. I said we should meet more frequently than the law requires, review all major plans and changes in advance, and make regular visits to the construction sites during construction. We should not be content to issue an annual report on what has already been done.

Oversight Committee Chair William Sterling was reluctant to adopt a more active role for the oversight committee, saying that the bylaws governed what the Committee did.

I argued that the bylaws only describe the minimum responsibilities of the Committee. If the school board and the Committee so chose, the Committee can advise prior to important project decisions.

In the end, after more discussion, there was at least agreement that I would prepare a list of project milestones that the School Board can consider submitting to the Oversight Committee in advance, the (obvious) idea being that the Oversight Committee might help the District avoid problems.

The “Bond Project List” as approved by the voters is vague and getting vaguer (sic).

Superintendent Collins said at last week’s meeting that it had to be “general” because how the $15.25 million is to be precisely spent is not yet fully known. To his credit, Mr. Collins did agree to provide me with the paperwork which shows how the school district arrived at the specific figure of $15.25 million.

“Make major health and safety repairs to Anderson Valley Schools. Replace/upgrade roofing, heating, mechanical, electrical and plumbing systems. Improve access to computers and modern technology. Make renewable energy improvements to reduce energy costs and put more money into the classroom. Construct new classrooms. Make improvements to grounds, parking lots and access. Furnish and equip schools to the extent permitted by law. Address unforeseen conditions revealed by construction/modernization (e.g., pluming or gas line breaks, dry rot, seismic, structural, etc.). Perform necessary site preparation/restoration in connection with new construction, renovation ore remodeling.”

A battalion of devils lurk in the details of these vaporous instructions.

And the final paragraph is truly frightening:

“The bond may be used to fund design, engineering and program management costs, as well as to make lease payments for leases, or to purchase authorized leased facilities. The bond may also be used to fund the cost of issuing the bonds, election costs, and the cost of obtaining and disseminating information as authorized under State law.”

Collins pointed out that the District is still in the early phases of the project, but that he expects the solar energy installation will be done first because the special low-interest financing for such work is time-constrained. After that Collins expects that roofing improvements will be next. (We assume that the building(s) to be re-roofed are not the ones slated for repair or replacement.)

We hope the School Board — which of course retains ultimate legal and financial authority for the project no matter what the oversight committee says or does — will manage the project in the best interests of Anderson Valley by first hiring a local contractor as project manager.

This thing should not be run out of Emeryville, and this oversight committee and our school board really, really have to do the right thing here.

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