Board member alleges 'mistakes' in bond projects, declines to offer specifics or sources
By CRISTINA JANNEY
Hays Post
The Hays USD 489 school board voted against hiring a project manager who would answer specifically to the school board at its meeting on Monday night.
The district is in the middle of construction projects funded by a $143 million bond issue.
The largest project is a new $100 million high school, which is set to open in August. Roosevelt Elementary School's addition and expansion are complete, and renovations at O'Loughlin Elementary School are ongoing.
The current Hays High School will be renovated into a middle school, and the former middle school will be renovated into an elementary school.
Board members Allen Park and Derek Yarmer have expressed concerns about bond spending.
Board President Curt Vajnar said he thought hiring a project manager was too late in the construction process.
Board member Ruth Ruder said she didn't think it would be effective to hire a project manager now that the district's largest bond-funded project—Hays High—is almost complete and the O'Loughlin project is underway.
Board Vice President Jayme Goetz said a significant portion of what a project manager would do is already done. The contracts on the projects have already been signed.
Yarmer said, "We have $61 [million], $62 million still out that is not spent at this point. That's a good chunk of money that could be some potential saving in that. I don't know how much a project manager would cost. I think it is worth looking into."
Park said, "I talked to a couple of superintendents, who said, 'If I was starting it, I would not do it. It's hard for me to do my job and be a project manager.' Really, it should be a separate job."
Park suggested a project manager not only look at projects that are underway, but Roosevelt, which is finished.
"Was it all done the right way?" Park said.
Hays USD 489 Superintendent Ron Wilson explained Nabholz Construction, the district's construction manager at risk, was providing project management. A construction manager at risk takes on the financial risk. They provide a guaranteed maximum price, which means they are responsible for any costs exceeding that price.
They are responsible for making sure projects stay on budget and schedule.
Project managers alone similarly deal with budgets and scheduling, but they don't assume any financial responsibility.
"They have the district's best interest," Wilson said of Nabholz. "I can tell you 25, 30, 40 times where they have looked at projects and [said] we can't do it this way, we need to go back and figure out how to do it cheaper.
"They have been tremendous. That is what they are. They are project managers. You have a project manager. You have a project manager who you are paying already."
"You are not quite understanding what Nabholz's role is," Wilson said. "They are an incredible organization that really is looking out for the best interest of the district because their reputation is on the line," Wilson said.
Nabholz's fee is set. They can't earn any more money. Savings go back to the school district, Wilson said.
Wilson said he and the other members of the administration team, including Chris Hipp, director of finance, Rusty Lindsay, director of building and grounds, and Scott Summers, technology director, were serving as owner representatives.
They are working with Nabholz and the design team and reporting back to the board and the community on the projects' progress, Wilson said.
"You are paying us as well to be representatives for the school district because we do care about this school district as well," Wilson said.
Park said he did not think Wilson had the expertise to handle the bond-funded projects.
This is the third bond Wilson has been involved in his education career, he said.
Yarmer challenged the spending on the bond projects.
"The people I talked to think we just got a high school out of this. I think I agree with them," Yarmer said.
"We're spending $164 million with the money we're making off the bond money," Yarmer said, "and we are still not getting all of the things that we expected out of the entire project."
The Hays Post contacted Yarmer after the meeting and asked him to elaborate on this comment. He responded by email. Because of the length of his response, it has been posted separately. See the link below.
SEE RELATED STORY: Opinion: Hays USD 489 board member critical of use of bond, capital funds
Yarmer continued to push for a project manager who would answer directly to the board.
"While contracts are signed for three of the projects, there is probably money we could still save on the other ones," Yarmer said. "I think it would be wise to get somebody to take a look at the books and the project to try to figure out what we can do to maximize what we have left."
"I have no idea what it will cost. $200,000?" Yarmer said of hiring another project manager.
Ruder said, "We should have looked at this beforehand, not when we are almost done with the bond. Folks, we are almost done with the bond."
Ruder also noted that it would take time to launch a search for a project manager, which means the district would be even deeper into its projects. Hiring a headhunter to perform a search for another manager would cost additional funds, she said.
She also questioned Yarmer and Park's estimates of the cost of hiring a new and separate project manager.
Multiple sources, including a source from Wayne State University, quoted project manager fees from 1.5% to 5% of the project's total cost.
At 1.5 %, that would have added more than $1.4 million to the total cost of the bond projects and at least $900,000 to the remaining $60 million in projects to have a separate liaison specifically for the school board.
Wilson said the project has a third party, Kaw Valley, which periodically inspects the projects, providing additional oversight.
Yarmer said to Wilson, "I have talked to people who worked for Nabholz or subcontractors who say you really don't know what you're doing. ... You have no idea."
Wilson said, "I disagree with you that I do know what I'm doing, and we've done a great job, tremendous job."
"On a $100 million high school, we've had $400,000 in change orders," Wilson said. "That's amazing."
$400,000 is well under the contingency that was established for the high school project.
Yarmer said the district is not taking care of the middle schoolers and elementary school students.
Wilson said he disagreed.
Yarmer said, "I have heard multiple things that have gone wrong step-wise throughout the project, and they got swept under the rug and money moved to other things."
After the meeting, the Hays Post asked Yarmer to elaborate on what specific problems had occurred on the new Hays High School project and where he received his information.
He refused to answer, saying that he wanted a copy of his quote before he would discuss it further with the Hays Post.
The Hays Post contacted Yarmer on Wednesday by email, asking him what specific proof he had of malfeasance on the Hays High project. He again did not give specific instances of mistakes or who had made the allegations.
His response is below:
"I spoke to several people who have worked on the bond project in different capacities. The people I have spoken with have expressed concerns about the management of the project and gave me several examples of mistakes that were made and not brought to the board’s attention. I am keeping the people’s names and the information that I have received confidential at this time because I promised them I would. I was only given 24 hours to respond to these questions and due to my busy schedule, I was unable to speak to all the individuals involved prior to giving my response."
"The common theme expressed by the people I spoke with is that Ron Wilson is not qualified to oversee the bond project. It was stated by multiple people that he is in over his head and says 'yes' to everything. The comments I made at the meeting were in response to the lack of forethought, planning, and responsible allocation of resources to the different components of the bond project."
Wilson said after the meeting on Monday there was no malfeasance in the Hays High project, noting that Yarmer had no proof of any major issues or errors in the Hays High project.
At the meeting on Monday, Park continued to push for hiring another project manager.
Park said, "We have half of the bond left. I agree we are way late. It doesn't hurt. Let's see what we can do. ... It is something fiscally important that we do so we are accountable to our taxpayers."
Although most of the members on the school board now were elected after the bond issue was passed, Park was a part of the board when the bond plan was created.
Yarmer made a motion to look into hiring a project manager for the remainder of the bond and interview a prospective manager under the guise of the board.
Yarmer's motion failed on a vote of 3-4. Yarmer, Park and Vajnar voted in favor of the motion, with the remaining board members voting against.