ECCL Contract of the Day

Announcing a new feature of the Tattler: the ECCL Contract of the Day.  The Emery School District and the City of Emeryville is entering into many contracts with consultants and builders for the Emeryville Center of 'Community' Life.  The money spent on these contracts is public and the public has a right to know.  Large contracts and small, the ECCL Contract of the Day will highlight what your money is being spent on.

Today's Featured Contract:

 $6.5 Million to Nexus Partners 

for design services

approved April 2012.

We'll start the new feature with a big one, the $6.5 million overall contract for the architects for the ECCL design process, Nexus Partners. Nexus Partners is an architectural/design team comprised of the firms MKThink, dsk, and Concordia. This contract includes 11% mark up for 'fixtures, furniture and equipment', meaning the architects will get money from the School District for every desk and chair and other equipment the District buys.

The early ECCL design phase was covered by an agreement made in January 2010 between the City, the former Redevelopment Agency, and the District called MOU #1. That agreement called for Nexus and other consultants to be paid $615,000 for architectural services for their work on the project during 2010 and 2011.

Under a subsequent contract, approved in April 2012 as part of MOU #2, Nexus will be paid $6,564,798. This 74-page document is notable for several reasons.  First, on pages 3-9 it contains the architects "Conceptual Opinion of Cost" of the ECCL construction as well as the furnishings, fixtures, and equipment ("FFE").  This figure comes to $58,325,000 and does not include many expected costs, and mostly estimates costs based on expected costs per square foot, but it nonetheless provides the most detailed budget for the ECCL construction yet provided.

Also of note is what the document does not include.  A detailed specification of what individuals will work on the design, at what rates, and for how many hours is not relied upon.  Instead, the $6,564,798 compensation is apparently based on an 11% rate of compensation based off of the "Conceptual Opinion of Cost" of the construction and FFE costs.

Under a percentage-based compensation structure, such as this, one might expect that the arrangement covers every conceivable aspect of the design work.  Not so.  As was the case with earlier agreements with Nexus, numerous change orders have already been approved for additional work outside the defined scope of work, partially summarized here:

Date Approved	Amount	Details
01/19/2010	$448,060	MOU #1 Architectural Services ($615,000 total*)
Sep. 2010	$103,850	Addendum 1
Jan. 2011	$111,376	Addendum 2 (partially replacing amounts in MOU #1)
May 2011	No additional charge	Addendum 3
Aug. 2011	$341,850	Addendum 4
01/09/2012	$174,585	Addendum 5
02/27/2012	$168,700	Addendum 6
04/16/2012	$6,564,798	Overall Design Contract
10/22/2012	$137,495	$48M feasibility study
02/13/2013	$168,650	Full Service Community Task Force
02/13/2013	$18,750	Space utilization update
05/22/2013	$479,151	11% fee for increased project scope
Partial sub-total	$8,717,265	(approximate)

Typical Chair
Cost to School District: $335
Nexus Partners take: $36.85

*Some of this amount from MOU #1 went to other consultants.

The amendment approved by the School District on May 22, 2013 is of particular interest.  Among a few other small changes, the project's scope was increased to have a construction, furnishings, fixtures, and equipment cost of $62,699,375, up from the prior $58,325,000.  So, Nexus sent an additional invoice for approximately 11% of the increase, adding $479,151 to their coffers.

This is a particularly lucrative way of doing business, particularly given that the compensation percentage is based off a total that includes the furnishings, fixtures, and equipment.  Just imagine, whenever our School District buys a chair, a desk, a table, or a bookcase, Nexus collects 11% of the cost of that item.  See page 70 of the overall design contract which explains, "FFE includes moveable furniture, fixtures or equipment that have no permanent connection to the structure of the building, landscape, or infrastructure."

That's what makes this contract, and its amendments, the Tattler's ECCL Contract of the Day!

Thanks to Brian Carver for providing research for the Contract of the Day

Lawmaker Attempts To Curb Emery School District's Corrupt 'Pay To Play'

Today's Bay Citizen features a story about California school bond corruption that conjures up abuses from the passage of Emeryville's 2010 Measure J school bond.  
Emeryville's Measure J, like other recent school bonds statewide, was funded by firms that would benefit financially from passage of the measure.   Measure J cleared $95 million in Emeryville taxpayer funded bonds for the building of the Center of Community Life.
The Measure J campaign was funded by:

• $3000 from Nexus Partners- the architectural design team hired by the School District after the election to the tune of $6 million 
• $10,500 from Caldwell Flores- the politically connected Emeryville bond writing firm who got the Measure J contract worth millions of dollars
• $1000 from Greg Kato- the vice-president of Caldwell Flores
• $5000 from Jones Hall- a bond counsel firm
• $10,000 from Turner Construction- the contractor selected to build the project worth millions of dollars

It should be noted all these campaign donations occurred before the election and subsequent passage of Measure J.  Only two private citizens not expected to receive pay back donated (a small amount) to the campaign, everyone else stood to benefit financially with passage of the measure.

The figures above illustrate the huge payout a small investment in a school bond can bring; the focus of the Bay Citizen story. 

The Bay Citizen story highlights a San Jose School District and its recent school bond, coincidentally also a Measure J.

Here then is today's Bay Citizen story:

Critics struggle to end 'pay to play' in school bonds

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By WILL EVANS on May 14, 2012 - 12:00 a.m. PDT

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Critics of the practice in which financial firms help pass school bonds that they profit from are continuing to push for reforms, but so far have faced resistance and failure.

In California, underwriting companies hired by school districts to sell bonds often make campaign contributions to help convince voters to pass the bond measures. A California Watch investigation found that leading underwriters gave $1.8 million over the last five years to successful bond measures, and in almost every case school districts gave underwriting contracts to those same firms.

Underwriters are essentially middlemen, buying bonds from districts and selling them to investors at a higher price. Underwriters say they generally only give campaign contributions after getting hired; school districts argue the money has no influence. But critics call it a “pay to play” system that potentially costs taxpayers more than a strictly competitive process would.

The California Association of County Treasurers and Tax Collectors has been pushing to end the practice for years. Last year, it sponsored a bill to prohibit financial firms from providing both underwriting and campaign services for bond measures. The bill failed in committee, but its author, Assemblyman Chris Norby, R-Fullerton, vows to bring it back next year and add limits on campaign donations.

"It’s a clear conflict of interest. Wall Street brokerage houses are buying local elections," Norby said. "The whole democratic process is being subverted and corrupted."

Norby acknowledged his efforts face determined opposition from school districts and some underwriting companies. Similar bills failed in 2010, 2009 and 2008.

"You have the public school establishment in an unholy alliance with Wall Street," Norby said. "It’s hard to beat it."

School districts are worried that Norby's legislation would freeze underwriter campaign donations, which are needed to successfully pass bonds, said David Walrath, legislative advocate for the Small School Districts' Association.

"We believe this bill, if enacted, would make it less likely that we could pass bonds, which would mean we’d be less able to provide adequate facilities for our students," Walrath said.

Walrath said the proposal would especially harm small districts in rural areas, which are less able to raise money for bond campaigns from residents. He also takes issue with the bill for singling out financial firms, while architects, builders and unions also routinely give money to bond campaigns.

"What is it about the service (underwriters) provide that’s so objectionable that they cannot have political free speech rights to assist in a campaign for something they believe in?" Walrath said.

Federal regulators have also expressed concern that restrictions on bond measure contributions wouldn't pass constitutional muster. The U.S. Supreme Court has upheld limits on contributions to individual candidates, but not for ballot initiatives.

"It does touch on a person's ability to make constitutional speech," said Ernesto Lanza, deputy executive director and chief legal officer of the Municipal Securities Rulemaking Board.

For years, some financial giants have been pushing the self-regulatory agency to adopt restrictions. In 2008, representatives of Morgan Stanley, JPMorgan Chase & Co. and Citigroup Inc. urged the board to limit bond measure contributions from financial firms because of "the perception that making such a contribution could cause an underwriter to be selected and to help ensure that the playing field is leveled for all underwriters."

Other underwriters, however, pushed back. School districts and other government entities “are in need of the public policy and campaign expertise of experienced regional investment banking firms," wrote an executive of George K. Baum & Company.

The Municipal Securities Rulemaking Board ended up requiring disclosure of campaign contributions and is still considering whether more regulations are necessary, Lanza said.

In California, the debate has focused on underwriters that provide election-related services along with their traditional underwriting business.

In 2010, for example, Franklin-McKinley School District in San Jose hired George K. Baum to help lay the groundwork for a bond measure campaign and to underwrite the bonds once they passed. The pre-election services included strategic planning, a public information program and a community opinion survey.

"George K. Baum & Company offers school districts a turnkey approach to facilities funding," the company advertised in its proposal. "Our school district bond election clients have been overwhelmingly successful."

The additional services are supposed to be free. School districts are prohibited from using public funds for bond campaigns. But county treasurers argue that school districts end up paying more under these arrangements. 

"We feel that these prepackaged campaign and underwriting relationships result in higher fees to the taxpayers," said Jackie Denney, president of the California Association of County Treasurers and Tax Collectors.

Neither the district nor George K. Baum responded to requests for comment.

But in its proposal to the school district, the company stated, "Our competitors would like you to believe that the District will pay a higher fee for our additional services, but this is patently untrue. The only differences in this regard between our firm and our competitors are our smaller profit margin and our dedication to specialization."

Under its contract with the district, George K. Baum stood to make 1.1 percent of the bonds sold. 

The company gave $8,500 to the campaign for Measure J, a $50 million bond measure on the November 2010 ballot. It also provided $10,000 worth of "Campaign Consulting Services," according to campaign filings. The measure passed with 70 percent of the vote, and George K. Baum has been selling the district's bonds since then.

Source: The Bay Citizen (http://s.tt/1btIB)

Nexus Partners Changes Posting About Teacher Pay

Damage Control: School District Takes Down Inflammatory Post

Yesterday the Emery School District moved to stanch criticism that it is enabling a debate meme that would tie teacher pay to student test scores by removing a story from its Center of Community Life blog site.
The Nexus Partners, a School District client paid to forward the Center of Community Life, responded to a Sunday Tattler story  critical of the blog post by swapping the story about the Education Secretary Arne Duncan forwarding the wisdom of tying teacher pay to student performance with an innocuous story about the Secretary advocating for "community schools".  The District's blog does allow readers to read the original story by linking it but new readers will now have to pay the New Yorker Magazine, the source of the Arne Duncan story.  Before yesterday's swap, readers of the Center of Community Life blog could read the teacher pay story pasted right on the blog for free.

District officials were evasive about reasons for the Arne Duncan story swap on their blog and they refused comment to the Tattler.

Readers can access the February 1, 2010 New Yorker story by Carlo Rotella for themselves on the magazine's website,  but a fee must be paid.

UPDATE / CORRECTION:
Friday May 4, 2012
The Nexus Partners have been revealed to be a consortium of three architecture / city planning firms plus the Emery School District.  Nexus Partners exists exclusively to forward the Center of Community Life and there is no web presence associated with the partners.  


Nexus Partners made changes to their blog and as of today, readers may now read the 'teacher pay' article for free.


The architecture/ city planning firms that comprise Nexus Partners are: mkThink, dsk architects, and Concordia.

School Consultants Say Link Teacher Pay To Student Performance

$6 Million Nexus Partners Lets Their Bigotry Show

Opinion

It's official: the Emery Unified School District thinks we need to bust the Teacher's Union and strongly consider tying teacher's pay to student academic achievement.   Oh, and never mind the fact that child poverty has been proven beyond a doubt to negatively effect their academic achievement.   

The anti-teacher message can be found at the Emeryville Center of Community Life blog and an entry about Education Secretary Arne Duncan posted by Nexus Partners, the moderators of the website.  Perhaps it should be further pointed out that we, the Emeryville taxpayers paid $6 million for the Nexus Partners' expertise to, among other things, allow us to hear this missive about teacher pay and academic achievement.

The toxic message about busting the union and holding teachers responsible for their student's parent's income comes courtesy of this group the Nexus Partners, the architecture / city planning consortium of  firms that the School Board hired several years ago to push forward the Center of Community Life.  That in mind, the Emery Unified School District also, is responsible, by extension, for this outrageous anti-teacher message.  

The Nexus Partners thinks Emeryville is best served by forwarding the anti-teacher message without any counter message in support of teachers, it should be noted.

It's hard to know where to refute this absurdity, but a good place to start is the idea that tying teacher pay to academic performance will somehow work to improve academic performance.  A good analogy is the idea that we should tie police pay to crime rates to  bring down crime, something the Emeryville Chief of Police Ken James said would bring the opposite results.

The teacher pay thing is especially egregious for a School District to float since not only does it bear no allegiance to reality, one only needs to consider the downward spiral  it would engender: As the pay rate goes down, down goes the ability to attract good teachers to the district, creating a negative feedback loop.  Plus it runs roughshod over the truism that children raised in poverty, a high percentage of Emery's demographic it must be noted, are scholastically disadvantaged from the start.

We are so tired of all the right wing attacks on teachers the last few years.  Why, precisely should teachers be held accountable for their students' disadvantaged home life?  Why is it teachers are expected now to solve the problems of poverty and student learning; that intractable problem of disadvantaged children's inherent disadvantaged academic achievement?  Are there any other fields where the workers are expected to produce results for things outside their control?  How about if we started blaming soldiers on the field of battle for how the war is going?  Instead of looking to the top brass, let's blame the soldiers.  How about if we dock their pay if the war starts going badly?

We have to ask, why would a school district, entrusted with children's educational welfare be enabling such an obviously false and disruptive narrative as tying teacher pay to academic performance?  The district has known about their consultants, the Nexus Partner's posting of this anti-teacher, anti-student piece of nastiness since it's inception but they have done nothing to remove it.  At this point we have to assume it meets with the District's approval.  
This has not been a worthwhile spending of $6 million of taxpayer's money, to put it mildly.  How about if we get a little pro-teacher, pro-children message for that substantial sum of money?

UPDATE / CORRECTION:

Friday May 4, 2012

The Nexus Partners have been revealed to be a consortium of three architecture / city planning firms plus the Emery School District.  Nexus Partners exists exclusively to forward the Center of Community Life and there is no web presence associated with the partners.  

Nexus Partners made changes to their blog and as of today, readers may now read the 'teacher pay' article for free.

The architecture/ city planning firms that comprise Nexus Partners are: mkThink, dsk architects, and Concordia.