The full $48.5 million saved by selling Old Central should have been left in the maintenance fund to prepare for the coming crisis. If the district wanted new buildings, the board should have put a bond referendum on the ballot and asked the people of Duluth for permission to spend their money. The reason the public wasn’t asked, of course, is because most Duluth citizens would have said, “You’re crazy!”
District leaders are assuring us they will soon design a new “long-range strategic plan,” because their previous long-range plan--after costing a boatload of our money--has gone south. Before moving on, however, our wise leaders have decided to take us all on one more fairy tale ride on the first plan. Most sensible people, after being burnt on some property/building investments in their private affairs, would be leery about jumping into another venture. Most sensible people certainly wouldn’t invest in another property/building deal before putting a new plan together.
By their own admission, district leaders have been steering our public school system down the road with no plan. Everything the board has done, since its multi-million dollar failed investment in the Red Plan, has been a knee-jerk reaction to crisis after crisis--effectively putting out countless fiscal fires by kicking everything further down the road.
The district clearly needs a new plan. There were 10,772 students in ISD 709 when the former Superintendent from Faribault came to town and started pushing the Red Plan. The official count from the 2020 school year is 8073, a 25% loss. In the private sector, the primary goal of any capital project is to position a company better in the marketplace. In the public sector, under the direction of a public board, we went backward in the educational marketplace.
Lost enrollment has cost district 709 about $17 million in state aid annually, just from the base formula alone. Some of the student loss is due to changing demographics and COVID-19, but the bulk of it is tied directly to bad decisions by our school board, which drove families to other educational venues.
Even the Minnesota Department of Education is warning that if the downward trend of ISD 709’s enrollment continues for 5 more years, Duluth may have to close schools, including one high school. The Duluth News Tribune quoted the department in its 6/26/2021 edition: “If the district’s declining enrollment projections between fiscal year 2021 and fiscal year 2026 continue beyond 2026 and they maintain their current net loss of students…the district will have more building space than needed and the school board may need to consider the closure of one of the high schools and/or other school sites to address likely future district financial challenges.”
This warning comes on the heels of a massive investment of hundreds of millions that was supposed to solve our enrollment issues. In the private sector, if a Board of Directors makes a decision that not only fails to deliver on promised outcomes, but actually costs the company millions of lost revenue, shareholders can sue and hold the decision-makers liable for that mistake. In the government sector, if a public board--such as our school board--makes a poor business decision that fails in its objective and costs a government organization millions of lost revenue, that loss is just dumped onto the taxpayers.
As previously stated, $11.6 million of the Red Plan’s original work scope was tossed overboard in 2010 when the budget went south. Besides the work on Old Central, construction of a new district transportation center was simply jettisoned out of the facilities plan. I often compare this arrangement to a private citizen signing a contract with a builder for a new house and two-car garage. After the project proceeds, the cost estimate turns out to be inaccurate, so the garage is simply tossed out of the work scope of the contract. This is obviously a good deal for the builder--who still makes the same amount--without any loss. It is not such a good deal for the person paying the bill, who no longer will have a new garage as part of the job.
One year after $11.6 million worth of work was tossed overboard because of budget problems, $19 million more taxpayer money was added to the Red Plan. Even after Duluth’s taxpayers were put on the hook for $19 million more, none of the work tossed out of the plan a year earlier--including the new transportation center--was reinstated. Meanwhile, just as with Old Central, as another decade passed, the district’s existing transportation became more and more dilapidated.
A new transportation center will now be built on the Central campus, after the high school is torn down. The cost is effectively being added onto the Red Plan’s half billion dollar bill. A building that was scheduled to be constructed and paid for a decade ago at a price of $2.5 million will now cost almost exactly twice that amount: $5,160,000, if the new estimate holds.
