Burlingame Daily News
The San Mateo Union High School District - consisting of seven major high schools - has gone downhill during the tenure of its current superintendent, Sam Johnson. His recent retirement announcement can only be seen as an admission of defeat, mostly in the area of finances. To be fair, Johnson is a likable person, did well in his former positions of director of personnel and associate superintendent, and inherited many of the district's financial problems when he took the top job.
The major bright spot during his three-year stint was the rehabilitation of the district's aging high school facilities. Ever since Proposition 13 limited the funds raised by property taxes, the district hadn't made major upgrades to its high school buildings, but generous voters approved the district's Measure D and Measure M bond proposals to fund improvements. Since then, Measure D projects have been completed and Measure M projects are soon to begin.
Even so, the management of Measure D projects by the district's administration and board of trustees left much to be desired. Apparently, due to poor stewardship by the overall project manager, Kitchell, various claims were filed by contractors, subcontractors and suppliers which cost the district an extra $74 million over the $137 million supplied by Measure D bond money. An overrun of, say, $5 million or so, might be understandable, but $74 million?
We're talking real money here - when you add up measures D and M bond money, we're talking about nearly half a billion dollars. I assume that once the interest is added, we're reaching toward the big B itself. When that kind of money is in the hands of people not expert in its handling (the superintendent and the board of trustees who seem to have neglected to get sufficient outside advice) - and companies are vying to be first to the feeding trough to get to those millions - you have an interesting state of affairs.
Now, as the district moves to get construction started on Measure M projects, Superintendent Johnson and the district administration have a curious attachment to a veteran of the Measure D era - John Maloblocki - who was the construction manager for Kitchell, the project manager. One would think that the district administration would want to distance itself from leading individuals associated with Measure D planning failures, but instead, the district maintained an affiliation with Maloblocki, who left Kitchell and went to work for a new company, Skanska (which seems to play in the same big leagues as Bechtel of San Francisco).
Soon, Skanska was being brought in to handle pre-planning for Measure M project implementation even before voters had passed it.
After Measure M passed, Skanska was positioning itself to become the overall project manager for all the projects on the district's list. As is traditional, the district doesn't select a project manager based on a bidding process, but rather through a request for qualifications, where companies submit resumes and the district ostensibly selects the best-qualified candidate and attempts to negotiate a fair contract.
Skanska was selected as best qualified and seemed to be the shoe-in for the job. The company, headquartered in Sweden, proposed to do the six-year total management job for $24 million, and a contract was prepared. I think that many assumed the board of trustees would rubber-stamp Superintendent Johnson's endorsement of the contract, but instead, Skanska's fortunes took a nose dive.
Cost estimates
One thing that brought concern to board members and the public were media reports that Skanska's bill had escalated from $11 million to $24 million. The $11 million was for construction management only but both the district and Skanska agreed that a wider scope of services was needed, so the estimate initially was increased to $19.5 million.
Everyone seems to agree that Skanska has a good track record and has quality personnel. It's Skanska's price tag that raised eyebrows. Now, if Skanska did its job so well that there was not a single cost overrun - which was its announced goal - perhaps it would be worth $24 million. But the company offers no guarantees that this would be the case. Also, the top execs on the Skanska team - including Maloblocki - would be paid over $200,000 per year.
At any rate, the board of trustees blanched when they saw the bill. Also, in the most recent board meeting, no one wanted to take credit for originating the proposed contract - the board, Skanska, or Superintendent Johnson. It was an embarrassing moment for all concerned.
A lawyer currently representing the district in Measure D arbitration and litigation, Mark Haesloop, suggested at the meeting that a project management bill should be approximately half what Skanska wanted.
In-house assistance
Haesloop also made an admirable recommendation: that the high school district hire one or more permanent (and impartial) construction experts to continually advise the superintendent and board, and help manage construction projects. Other large districts have them, he said.
Because of the mistrust and division that set in between the board and Skanska, the board refused to sign the proposed contract with the Swedish company and decided to return to another request for qualifications, essentially starting all over again. Skanska, feeling somewhat bitter, hasn't decided whether it will go through the process again. The company had already begun extensive work on Measure M project planning even before having a signed contract and will complete the work it has already initiated for this year.
It was about time that the board of trustees began to question the somewhat loose spending of so many millions and to assert its independence. They need to seek all manner of expert advice on how the district will survive financially, as it will need to repay the bond money and the other $74 million it borrowed over the coming decades.
Now, the Measure M projects have been delayed, and that adds expense as labor and construction costs increase. Hopefully, the next superintendent will start to turn things around, because in the end, our students and teachers don't need to be shortchanged by fiscal problems.
Also, don't expect district voters to approve another high school bond issue for many, many, many years.
Bil Paul's column appears Thursdays in the Daily News. Reach him at [email protected].
The San Mateo Union High School District - consisting of seven major high schools - has gone downhill during the tenure of its current superintendent, Sam Johnson. His recent retirement announcement can only be seen as an admission of defeat, mostly in the area of finances. To be fair, Johnson is a likable person, did well in his former positions of director of personnel and associate superintendent, and inherited many of the district's financial problems when he took the top job.
The major bright spot during his three-year stint was the rehabilitation of the district's aging high school facilities. Ever since Proposition 13 limited the funds raised by property taxes, the district hadn't made major upgrades to its high school buildings, but generous voters approved the district's Measure D and Measure M bond proposals to fund improvements. Since then, Measure D projects have been completed and Measure M projects are soon to begin.
Even so, the management of Measure D projects by the district's administration and board of trustees left much to be desired. Apparently, due to poor stewardship by the overall project manager, Kitchell, various claims were filed by contractors, subcontractors and suppliers which cost the district an extra $74 million over the $137 million supplied by Measure D bond money. An overrun of, say, $5 million or so, might be understandable, but $74 million?
We're talking real money here - when you add up measures D and M bond money, we're talking about nearly half a billion dollars. I assume that once the interest is added, we're reaching toward the big B itself. When that kind of money is in the hands of people not expert in its handling (the superintendent and the board of trustees who seem to have neglected to get sufficient outside advice) - and companies are vying to be first to the feeding trough to get to those millions - you have an interesting state of affairs.
Now, as the district moves to get construction started on Measure M projects, Superintendent Johnson and the district administration have a curious attachment to a veteran of the Measure D era - John Maloblocki - who was the construction manager for Kitchell, the project manager. One would think that the district administration would want to distance itself from leading individuals associated with Measure D planning failures, but instead, the district maintained an affiliation with Maloblocki, who left Kitchell and went to work for a new company, Skanska (which seems to play in the same big leagues as Bechtel of San Francisco).
Soon, Skanska was being brought in to handle pre-planning for Measure M project implementation even before voters had passed it.
After Measure M passed, Skanska was positioning itself to become the overall project manager for all the projects on the district's list. As is traditional, the district doesn't select a project manager based on a bidding process, but rather through a request for qualifications, where companies submit resumes and the district ostensibly selects the best-qualified candidate and attempts to negotiate a fair contract.
Skanska was selected as best qualified and seemed to be the shoe-in for the job. The company, headquartered in Sweden, proposed to do the six-year total management job for $24 million, and a contract was prepared. I think that many assumed the board of trustees would rubber-stamp Superintendent Johnson's endorsement of the contract, but instead, Skanska's fortunes took a nose dive.
Cost estimates
One thing that brought concern to board members and the public were media reports that Skanska's bill had escalated from $11 million to $24 million. The $11 million was for construction management only but both the district and Skanska agreed that a wider scope of services was needed, so the estimate initially was increased to $19.5 million.
Everyone seems to agree that Skanska has a good track record and has quality personnel. It's Skanska's price tag that raised eyebrows. Now, if Skanska did its job so well that there was not a single cost overrun - which was its announced goal - perhaps it would be worth $24 million. But the company offers no guarantees that this would be the case. Also, the top execs on the Skanska team - including Maloblocki - would be paid over $200,000 per year.
At any rate, the board of trustees blanched when they saw the bill. Also, in the most recent board meeting, no one wanted to take credit for originating the proposed contract - the board, Skanska, or Superintendent Johnson. It was an embarrassing moment for all concerned.
A lawyer currently representing the district in Measure D arbitration and litigation, Mark Haesloop, suggested at the meeting that a project management bill should be approximately half what Skanska wanted.
In-house assistance
Haesloop also made an admirable recommendation: that the high school district hire one or more permanent (and impartial) construction experts to continually advise the superintendent and board, and help manage construction projects. Other large districts have them, he said.
Because of the mistrust and division that set in between the board and Skanska, the board refused to sign the proposed contract with the Swedish company and decided to return to another request for qualifications, essentially starting all over again. Skanska, feeling somewhat bitter, hasn't decided whether it will go through the process again. The company had already begun extensive work on Measure M project planning even before having a signed contract and will complete the work it has already initiated for this year.
It was about time that the board of trustees began to question the somewhat loose spending of so many millions and to assert its independence. They need to seek all manner of expert advice on how the district will survive financially, as it will need to repay the bond money and the other $74 million it borrowed over the coming decades.
Now, the Measure M projects have been delayed, and that adds expense as labor and construction costs increase. Hopefully, the next superintendent will start to turn things around, because in the end, our students and teachers don't need to be shortchanged by fiscal problems.
Also, don't expect district voters to approve another high school bond issue for many, many, many years.
Bil Paul's column appears Thursdays in the Daily News. Reach him at [email protected].
- Written by JC
Why they are called Skamska!
Argentina Judge Orders Searches In Skanska Probe -Reports
BUENOS AIRES -(Dow Jones)- An Argentine judge has ordered searches of 22 companies as part of a bribery investigation involving alleged kickbacks in a pipeline expansion project carried out by Swedish construction company Skanska AB (SKA-B.SK), Argentine newspapers reported Tuesday.
According to reports in leading local daily newspapers La Nacion and Clarin, Judge Javier Lopez Biscayart ordered the searches to be carried out Monday.
The judge is investigating allegations that Skanska used 118 false receipts with some two dozen companies to cover the flow of alleged kickbacks related to its subcontract to expand a pipeline in northern Argentina controlled by Transportadora de Gas del Norte (TGNO2.BA), the two newspapers reported. The government launched the pipeline expansion in late 2004 in a bid to meet rising demand.
Investigators suspect that some of the companies were fronts set up to funnel funds, the reports alleged.
Skanska Argentina officials were not immediately available for comment. Judge Lopez Bisayart's secretary said the court cannot provide information over the telephone.
www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20070424%5CACQDJON200704241110DOWJONESDJONLINE000673.htm
Posted by: KRN | April 27, 2007 at 08:38 PM
"Investigators suspect that some of the companies were fronts set up to funnel funds, the reports alleged."
Were any Measure D funds funneled (or the $73 million in loans), and if they were, who were they funneled to? Perhaps the author (or facilitator) of the recent construction management contract was set to get a slice of the pie...
Posted by: Mac | April 27, 2007 at 10:08 PM
Did anyone get a home built in Las Vegas?
Posted by: KRN | April 27, 2007 at 10:11 PM
JC,
Exactly what financial problems did Sam inherit when he took the job? As I recall, when Tom Mohr left there was $10 million in our
reserve fund and we were doing quite well. Am I mistaken?
Posted by: Judy | April 28, 2007 at 04:09 PM