Much more than inflation is to blame

Today we share a letter to Dr. Roumpos and our board of education in response to the Superintendent’s March 16th BOE presentation “Prop S Process Review” (click to download).  We encourage you to read this letter, written by Carl Suhre, a resident of our district who is a retired  finance director and controller for a large corporation.  Mr. Suhre has served on many district committees over the years, and regularly provides independent detailed analyses of district budgets and financial processes.

Please find below a summary, but we encourage you to click here to download the complete letter.

Exceptions taken to Dr. Roumpos’ presentation

“The District was working from incorrect FHN cost estimates from the beginning.
– $86,350,000 communicated to taxpayers ahead of Prop S vote”

This statement misrepresents what happened.  The district in 2018 paid Hoener & Associates $87,944 for a detailed Prop S cost estimate which included $93.5M for a new FH North high school. Then an internal committee (including BOE representatives) changed this estimate to $86M prior to the Prop S vote.  In this new estimate, the square footage was reduced from 380,000 to 350,000.

Dr. Roumpos also asserts that no inflation was built into the 2018 estimates. Board meeting recordings (Oct 2018, Sept 2019) show the Hoener representative and the FH COO stating that normal inflation was included.

Problems identified:

  • Architectural and construction management costs were not competitively bid, and these services were paid as a percentage of the final costs – an incentive for increasing those costs.
  • The district used a new “CMaR” process that they didn’t understand.  They did not competitively bid the entire FHN project, and construction began 6 months before a final price was presented to the BOE after $38 million was already committed.
  • Because we limited ourselves to one general contractor, we also may have reduced competition amongst the sub-contractors and thus further inflated costs
  • Because FH is a public entity, the contractors knew we had $244 million to spend
  • The BOE (prior to April 2022) completely failed in their responsibility to be good stewards of taxpayer money.
    • Earlier during the pandemic, the BOE approved other contracts (security vestibules, playgrounds, parking lots) either without competitive bids or knowing the Prop S budget. The actual costs were between 74% and 162% over budget, and should have been an early warning of trouble to come. The BOE should have stopped at this point to investigate these issues before moving forward with other projects, let alone a new high school.
    • The BOE didn’t vote on FHN increasing from 350,000 sq ft in the Prop S assumptions to 410,000 in the final design (an increase of 60,000 sq ft) until November of 2022.
      (Editor’s note: The board was represented by Director Mike Hoehn on the FHN design team. Were they really in the dark, or did they simply ignore their oversight responsibility?)
    • The BOE approved bid packages #1-4 for Francis Howell North for a total of $38 million without knowing the final costs or even how the bid packages compared to the Prop S budget.
    • Once the $79 million cost overruns on FHN were finally publicized in November 2022, the BOE then failed to immediately engage outside experts (construction, purchasing, legal, audit) to get a completely unbiased report of what went wrong and then of course what needs to be corrected before moving forward. Had this been completed immediately, maybe we would now be in a position to take corrective action and move the remaining projects forward.

Editor’s note:  Dr. Roumpos seemed careful in his review only to blame the prior administration and not the board (his bosses).   This is an inherent problem with an internal review, and another reason why an independent audit is required.  Francis Howell Families has joined others in calling for the State Auditor to conduct one.

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