CONCORD — When Mt. Diablo Unified School District officials first unveiled a plan promising quick, money-saving retrofits in fall 2021, wanting money The district agreed without objection.
What the district staff didn’t say, nevertheless, was that by tacitly signing as much as a series of “energy services” from Schneider Electric, agreement For recent ceiling tiles, lighting fixtures and heating, ventilation and air-con systems throughout the district, the board waived its right to barter guarantees that the alleged savings in electricity and operating costs would exceed the project's $50 million list price – a key legal requirement of the contract.
It's unclear whether the MDUSD board was aware that it could have crossed a problematic — though technically still legal — line with its unanimous decision, say several lawyers acquainted with the project who spoke to each regulatory officials and this news organization.
California's complex web of contract laws goals to eliminate corruption, fraud, nepotism and mismanagement by setting strict standards for the allocation of funds to local governments.
But MDUSD took advantage of an exception to those traditional rules: The projected energy savings related to the deal enabled the district to more quickly complete its contract with Schneider to design and execute the multi-phase construction project.
“I know that was a lot of information, but why not just hit the pause button and do a little more research?” said Dave Johnsen, one in every of the primary to publicly scrutinize Schneider's contracts. He is especially concerned that Schneider sold the board a posh deal that won’t have fully reflected what was actually stipulated within the effective print of the $50 million contract in 2023.. “They brought it up at the very end of the three-hour board meeting. It's just odd that they only spent 10 minutes talking publicly about the use of these funds.”
Johnsen, who monitors labor and contract compliance on public projects for a regional nonprofit, says Schneider's contract must be reviewed for unreasonably overstated costs and misstatements of energy projections, especially for such small jobs on lighting fixtures, ceiling tiles and heating, ventilation and air-con systems.
He is just not the just one. Supervisors are concerned that the district Best practices bypassed on a project that now accounts for one-third of a $150 million property tax bond, Measure J, that voters approved in 2018.
“It's important that the public be informed about how and why the committee makes decisions,” said David Snyder, executive director of the First Amendment Coalition. “To be fair, that's not always possible, but the best practice is to give the public as many opportunities as possible for comment and discussion – especially on items with such a high price tag.”
Several district administrators who helped get this project across the finish line have either dismissed any concerns of wrongdoing or left the district entirely, including the previous executive director and former general counsel.
In February 2022, an initial agreement was approved based on Schneider's evaluation that his construction projects would save $900,000 annually in electricity and gas costs. Two months later, the district awarded Schneider a $385,000 contract to develop the multi-phase energy savings plan.
But as a substitute of putting the subsequent multimillion-dollar phases of construction out to bid – an industry standard for awarding publicly funded contracts – the district opted to revise Schneider's contract to $24.3 million in May 2022. That amount funded the primary phase of the project to interchange LED lighting fixtures and ceiling tiles districtwide.
In March 2023, a contract amendment doubled the overall to $49.4 million and added a second phase of construction for HVAC systems, which was also not put out to bid. The district took Schneider at his word that under the March 2023 contract, MDUSD's cumulative savings would reach $1.8 million — 80% of its annual utility spending — after one yr and exceed $53 million inside 20 years.
But Schneider's initial optimistic guarantees about energy cost savings were watered down and eventually withdrawn when county officials greenlighted the corporate's final plan 14 months after the initial agreement was signed. In the yr after the project's first phase was accomplished, the county's energy savings were only 7%, in line with Schneider's own figures.
The current agreement explicitly states that the corporate's claims of expected savings have to be approved without additional measurements or verification. In addition, the agreement features a waiver that Schneider “makes no guarantees of energy or efficiency savings in connection with the project or the contract.” This waiver appears on the identical page because the requirement that Schneider's work will lead to energy savings.
In a final try and delay a choice on the ultimate deal last yr, Johnsen contacted the county trustees directly – including a one-on-one meeting with County Manager Adam Clark – and the Measure J Citizen's Bond Oversight Committee (CBOC), a volunteer organization tasked with ensuring the county spends its Measure J money as promised.
“(Local governments) have to be very careful about awarding $50 million worth of contracts on their own – that's problematic,” Johnsen said in an interview. “There was no urgency until I thought, 'Oh God, they're going to try to get another $25 million.'”
“I'm very confident that you're going to see (the projected savings),” Feldman said during a college board meeting in March 2023. “Once the (first phases of) the project are completed, you're certainly going to see really big progress from an energy savings perspective.”
Superintendent Clark claims the project is legal and the contract was awarded properly – and points to a public hearing in February 2022 that lasted only one minute.
Clark’s continued support of the project was echoed by MDUSD’s former Chief Business Officer, Lisa Gonzales, who received a vote of no confidence by union leaders in 2022 because of an absence of transparency within the district's funds. Shortly after the ink dried on Schneider's last contract, she took one other job in Washington state. Likewise, former general counsel Cesar Alvarado resigned in January, public records show.
The CBOC has unsuccessfully requested public records and independent reviews of Schneider's contract for the reason that contract was signed. Complicated by the recent departures of Gonzales and Alvarado, the CBOC claims that the district to dam their attempts to analyze this dealpossibly in violation of California law.
Gina Haynes, chair of the committee, said one in every of the most important warning signs emerged after Alvarado admitted to the CBOC that he had circuitously reviewed Schneider's last contract revision, valued at $50 million, because not all contracts are reviewed and district staff determine their value. Although he had not reviewed the March 2023 agreement, he insisted it was “proper and valid.”
Haynes fears the continued lack of open communication will jeopardize MDUSD's ability to ask taxpayers for extra money in the longer term, especially since there isn't much money left under Measure J for added improvements.
“They've lost their trust,” Haynes said. “If (the MDUSD trustees) really want to be transparent and want all of us voters to trust them, they're not going to let that happen.”
Originally published:
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