An ambitious and costly effort to rehabilitate aging buildings throughout the St. Paul school district has been plagued by staggeringly inaccurate cost estimates, employee turnover and a lack of oversight.
Eighteen high-priority projects alone will cost around $471 million, according to recent estimates — $179 million more than expected two years earlier.
“Every contractor wants to come work for St. Paul Public Schools because it’s frickin’ open checkbook,” said Nan Martin, a former administrative services manager within the facilities department handling the projects.
A Pioneer Press review of planning documents and financial records and interviews with two dozen people connected to the facilities department has found:
- The man charged with executing the plan disregarded criticism and staff recommendations, and minimized the projects’ rising costs.
- Faulty planning and overspending in facilities have gone largely unchecked as the administrators he reported to have come and gone.
- Oversight from elected leaders has been lacking, too, as school board members have rarely challenged the growing costs.
The most striking project so far has been Humboldt High, which is expected to be completed next year.
An early design plan for the addition and renovation estimated total costs at $14.4 million. That number jumped to $26.8 million by spring 2016 and $48 million by fall 2018.
As costs for that and other projects ballooned far beyond expectations, the district also failed to line up appropriate funding, bringing a rebuke from the state of Minnesota.
After finishing the last fiscal year with a $27 million hole in its construction budget, the district asked the state for permission to reclassify three ongoing projects so they would qualify for an additional $93 million in special bonds tied to school desegregation.
RELATED: 18 St. Paul school projects, $179 million over schedule
Then-Education Commissioner Brenda Cassellius approved the request but criticized officials for “shifting funds from approved projects to other projects without seeking advance approval from the Department.”
In the December 2018 letter, she continued: “This undermines the approval process and puts the district at risk of not being granted levy authority for the projects if the Department determines later that they don’t meet the statutory requirements.”
The facilities overspending has left the conservatively managed district uncharacteristically vulnerable.
The long-term facilities maintenance account — which gets around $26 million to spend each year — finished 2017-18 with its own deficit of nearly $10 million. Although it pays for facilities improvements, that account is part of the general fund, which mainly pays for district employees’ salaries and benefits.
In January, the district cashed out a $25 million emergency fund to help make payroll.
“It concerns me,” Chief Financial Officer Marie Schrul said of the cash-flow crunch.
To keep tax increases in check, the district in 2017 and 2018 pushed back seven large construction projects, raising concerns about how much it can get done before its debt load becomes too burdensome.
FLAWED PLAN, TROUBLED LEADERSHIP
Several former employees say Facilities Director Tom Parent rejected advice from experts in his office as he developed a deeply flawed Facilities Master Plan, then presented a rosy picture to his supervisors as project costs soared.
“The (Facilities Master Plan) would be a challenging and ambitious undertaking for a well-seasoned, experienced public-sector facility director who managed a similarly large portfolio of properties,” retired assistant facilities director Jose Cervantes said by email.
“Tom Parent was neither.”
An architect and planning manager promoted to director in 2014, Parent has overseen a sudden increase in spending on St. Paul’s school buildings — from $30 million a year in 2016 to around $112 million each year since.
Starting in 2014, facilities staff met with schools and sketched out plans to improve the look and function of every building in the district. The resulting Facilities Master Plan was approved by the school board in 2016 and laid out $484 million in school renovations, expansions and maintenance projects to tackle over the next five years.
Besides modern heating and plumbing systems, schools are getting secure and welcoming entrances, more natural light, gender-neutral restrooms and more functional learning space.
The district is borrowing to pay for the increased spending by issuing long-term bonds. The average homeowner was told to expect a series of $30 property-tax increases each year.
But the initial five-year plan quickly went off track as costs soared and numerous future projects were postponed.
RELATED: St. Paul schools facilities department’s other budgets also in the red
Parent has blamed tariffs and unforeseeable complications hidden underground and behind walls and ceilings.
But former employees say Parent disregarded staff members’ advice about how much each component would cost, settling on lower estimates that would enable him to take on more projects faster.
“He had talented and experienced managers and supervisors at his disposal but was unable to trust, support and bond with these staff,” Cervantes said.
Parent gave trades foremen less than a month to estimate costs for each of the 60-plus projects, Cervantes said.
“When Tom got the cost-estimate numbers … he reduced the cost in many areas,” said Cervantes, who retired in late 2016. “The failure of this first and most critical step doomed the project from the very beginning.”
STAFF: PARENT PAID LITTLE ATTENTION TO COST
Dennielle Handt worked under Parent for five months before she was laid off in 2016. She said Parent asked her to estimate the cost of installing security cameras in a number of buildings.
When she told him that there’s no simple way to do that without exploring how each school is configured, “he just did not want to listen to me,” she said.
Ultimately, Parent settled on cost estimates that Handt warned were too low, she said.
Brian Kinder, chief accountant for facilities until he retired in August, said Parent pushed ahead with construction at several schools at once but paid little attention to how he’d pay for the work. Projects had high contingencies and numerous change orders, he said, and Parent quickly blew past the amounts the state and school board had authorized him to spend.
“He was very much working with the idea that, hey, the board approved the (Facilities Master Plan) and that was it,” Kinder said. “Too many projects got issued way too fast.”
Raydenne Hagan, another facilities accountant, said Parent drove up costs by soliciting construction bids late in the season, when many contractors had already secured work.
Altogether, the district so far has at least started construction or secured funding for 18 projects that were included in the original 2016 Facilities Master Plan.
As of 2016, those 18 were supposed to cost $292 million.
The district’s latest estimates put that figure at $471 million — an increase of $179 million, or 61 percent, in two and a half years.
IN DEFENSE OF PARENT
Parent declined multiple interview requests for this report.
School district spokesman Kevin Burns provided a written response to the concerns raised by Parent’s former co-workers, but that statement did not address each of the specific allegations they made against Parent. Burns was adamant that information was not hidden from the school board.
In an October interview for a previous report, Parent told the Pioneer Press that his office “had a learning curve” as it nearly quadrupled annual spending on deferred maintenance and capital improvements.
“Some of our historic models for doing some of that cost estimating didn’t scale appropriately,” he said then. He added that flaws in the process had since been corrected.
Parent has also cited increased materials prices; scope revisions negotiated with school staff, parents and neighbors; and costly “surprises” they’d encounter once work was underway, such as poor soil at St. Anthony Park elementary and faulty plumbing at other schools.
EXPERT: UNDERESTIMATES COMMON
It’s common for school districts to underestimate the cost of construction, said Jeff Vincent, director of public infrastructure initiatives at the University of California, Berkeley’s Center for Cities and Schools.
Some of the factors Vincent identified as contributors to unanticipated costs have been present for St. Paul: old school buildings, a legacy of underinvestment in building maintenance and substantial competition from other school districts hiring contractors for their own building projects.
The Minneapolis construction firm Kraus-Anderson, which has been awarded bids on some recent St. Paul projects, helped the district estimate costs before the 2016 Facilities Master Plan was assembled.
John Huenink, the firm’s director of K-12 construction, maintains that those estimates were “fairly accurate.” However, he said, the scope of a project inevitably changes when the district talks to the school community to finalize plans before soliciting bids.
“In hindsight,” Huenink said, “maybe they could have done these community meetings first.”
DID LEADERSHIP TURNOVER AFFECT OVERSIGHT?
Parent is one of the few key employees to stay in the same job since the Facilities Master Plan was created.
His supervisor, Chief Operating Officer Jean Ronnie, left the district weeks after the school board approved the plan in 2016. Her successor, Jackie Turner, previously worked in school family engagement and has no construction background.
The plan is on its third superintendent. The school board bought out Valeria Silva’s contract just after the 2016 facilities plan was approved. John Thein served a year as interim superintendent before Joe Gothard was hired in 2017.
Turner and Gothard declined interview requests for this report.
Within the facilities department, Parent is on his third planning manager since he was promoted to director. The first, a woman who quit in March 2016, said Parent created a “hostile work environment.” The second, a woman tasked with producing more accurate cost estimates for a major update to the plan in 2017, was fired before her probationary year was up.
Parent underwent sensitivity training in January to satisfy terms of a settlement agreement with the second woman, but his employment records with the district contain no record of discipline.
The school board, too, has seen substantial turnover. Six of the seven members are serving their first terms. Approving the facilities plan was among the first significant actions four of those members took in 2016, just before they removed Silva.
During school board meetings, Parent has been asked to justify newly created positions and explain relatively minor cost increases on individual projects.
But board members have not called him to account for how the Facilities Master Plan has come to cost far more than he said it would in 2016.
Former employees say Parent has worked to mask the impact of those cost increases, which have delayed school improvements for thousands of students.
Kiel Schmitz, who ran data for the facilities department until he left for another job in March 2017, helped Parent communicate to the school board that the projects were on track financially.
He said Parent would give him a narrative and direct him to find data to support it — to “highlight the highlights (and) don’t make it a big part of the presentation for anything that was necessarily negative.”
Schmitz said Parent “never asked me to falsify information or anything” — just present the data in a favorable light.
“Just help me tell the story,” he said.
Burns, the district spokesman, says information was not hidden from the school board.
“Throughout the development and annual revisions of the (Facilities Master Plan), SPPS administration has been open, honest and forthcoming with our school board. These discussions, updates and changes in scope and costs have been fully communicated in public settings,” he said.
‘TRUST THE STAFF’
Amid the churn in supervisors and board members, facilities employees said they took their concerns about Parent directly to fifth-term board member John Brodrick.
In public meetings, Brodrick has been the only board member to consistently express an interest in facilities spending.
Brodrick said in an interview that he felt he had a good handle on how the master plan was progressing. But he acknowledged he never asked about the district cashing out its $25 million emergency fund, and he was not aware just how much costs have grown since the 2016 estimates.
“As a school board member, I’m always torn between being an effective steward on a governing body and at the same time not kidding myself into thinking I really understand all of the numbers involved in all the things we’re doing,” he said.
Board president Zuki Ellis and members Steve Marchese, Jon Schumacher, Jeanelle Foster and Marny Xiong did not return phone messages for this report.
Mary Vanderwert, one of six school board members serving first terms, said members “get updates and we knew there were cost overruns,” but she didn’t know the extent of the overspending.
Vanderwert didn’t know, she said, that the district recently cashed out its $25 million emergency fund. And she never waded through the latest year-end audit to discover that the capital fund finished with a major deficit.
“At some point,” she said, “you’ve got to trust the staff.”