How To Hustle Small Town Taxpayers, or
Eliminate The Middleman Before He Eliminates You
It would be a perfect plot for a movie on the Comedy Channel: A vain and acclaimed business leader who writes cheesy biz-advice books, admires Bucky Fuller and conducts feel-good seminars for corporate titans, turns out to be a common hustler on the public teat who endangers schoolchildren and hospital patients. Lawsuits and hilarity ensue.
In January, a series in the Denver Post revealed that at least 15 schools built by a prominent Colorado contractor had structural problems, some serious enough to keep students out of buildings. Two school buildings in Alamosa must be evacuated if a foot of snow accumulates on the roof. A school in Monte Vista must be abandoned if winds exceed 25 mph (which they do frequently). Spring winds in Kremmling lifted the roof of a new gym by several inches. The contractor for these schools faces similar complaints about other public buildings: A new hospital in Granby has to keep snow shoveled off its shaky roof, and a new county fair complex in Loveland quickly succumbed to winter storm damage. Perhaps the most egregious example is the new elementary school in Meeker, which held 350 students for a year before being declared too unsafe to occupy.
Looking more like a budget housing complex, the generic and bland new Meeker Elementary School sits unused while undergoing massive repairs.
For the Meeker School District, where the drilling boom had created a desperate need for more elementary classrooms, it all started when school principals were schmoozed at a Colorado Association of Schools conference by reps from the Fort Collins-based Neenan Company, a.k.a. “Neenan Archistruction.” Billing itself as a “design/build” firm, Neenan targets rural and small-town school districts and improvement districts that lack know-how for big capital projects. The Neenan website assures school districts it will provide “better designs, less risk, lower costs, better communication, tighter schedules, fewer surprises,” and most important of all, a “single point of responsibility.”
That’s the hard sell: Nothing is more intimidating to most volunteer school board members than being charged with construction of a new building, which could potentially result in a smoking pile of lawsuits and asbestos, with fingers pointing back and forth among dozens of architects, consultants, contractors and suppliers. Thus, it’s tempting to put all your eggs in one basket with a company that declares it has “re-engineered how the construction process works” with its “leading edge design principals” and “innovative people approaches.”
Neenan Archistruction, now the 72nd largest design/build firm in the nation, has in the past decade built or upgraded nearly 100 Colorado schools, along with scores of new buildings for local governments and tax districts. Neenan tells school officials it can take over nearly every vexing aspect of the process, and get them on the inside track for state grant money to boot. The Post revealed that, since 2008, the company has built $158 million worth of schools funded through Colorado’s BEST (Building Excellent Schools Today) program, and that two of Neenan’s rival school builders have seats on the BEST board that bestows the state grants. The Post also revealed an elaborate network of kickbacks from builders and subcontractors that makes a mockery of school bond elections in Colorado. Neenan and other contractors have poured tens of thousands of dollars into bond campaigns, and Neenan offers free “pre-election services” IF it gets the bid, which include “Identifying community movers and shakers,” mailing brochures, recruiting volunteers, identifying donors, registering voters, walking precincts and making calls to voters.
David Neenan is a regional business guru who has given seminars for Disney, Hilton, AT&T, Hewlett Packard and the U.S. Army on how to “build wealth with integrity.” He writes biz-advice books like “No Excuses: Be The Hero Of Your Own Life.” An Entrepreneur-in-Residence at Colorado State University College of Business, where he’s also been a commencement speaker, Neenan explains how he approaches construction “as a group of artisans working together.” The Archistruction portfolio prominently includes the green and cutting-edge New Belgium Brewing complex.
Neenan’s cost-savings pitch gained adherents on the Meeker School Board, which decided that previous bids for the new elementary school were too high. After some debate, they hired an owner’s rep with a potential conflict — the rep had worked for two other Neenan projects. Ultimately, Neenan got the contract with no further bids taken, and the new elementary school was built and occupied by 350 students in the fall of 2010. Soon thereafter, ominous indications of structural problems were observed: cracks, bulging walls, moving slabs and failing connectors.
Gary Howell seemed to comprise most if not all of the Neenan structural engineering staff. Initially, Howell tried to discourage the Meeker School District from seeking an evaluation by independent engineers. When the district did so anyway and the problems were found out, he creepily warned against “impugning a fellow engineer.” In December 2011, Howell’s state license was suspended. A school year had elapsed before it was confirmed that the building was unsafe to occupy.
Investigation revealed errors (and carelessness) of almost unbelievable proportion: the structural specs had been based on seismic standards meant for unoccupied storage sheds. Independent engineers likened the structure of parts of the building to a “giant teeter-totter” resting on undersized footings, which in turn rest on a deep fill of unique local soils that are highly compressible. Most of the exterior walls in fact mimic storage sheds, comprising steel studs, 24” on center, skinned by ½” of gypsum and ½” of fiberboard, with no “good path” to distribute wind loads.
Neenan has now promised all its clients that everything will be made good, which could cost a considerable amount. But the point of recounting this story is not to cast David Neenan as a singularly venal, hypocritical or spectacularly sloppy builder, compelling as the case may be. More likely and more alarmingly, these practices are typical of companies that target taxpayers. Equally worrisome is the absence of effective building inspections — a 2007 state audit declared Colorado has “shockingly poor” oversight of K-12 construction. Ben Serratto, the state’s inspector for Meeker Elementary, frequently never showed up for work, falsified reports and inspections and should be fired, according to Serratto’s superior.
Ultimately, this is an apt parable for how bad architecture has come to play a central role in the plight of our public schools. Here in Moab, where there is no boom in population, we are grumpy because we just built these expensive new school buildings (not really “we” — it was all out-of-town contractors) and then had to lay off already underpaid teachers. It’s the same everywhere: bricks and mortar (nowadays gypsum and waferboard) trump education, although nobody ever admits it’s an either/or situation. So, all of you members or wannabe members of school boards faced with new construction, here’s my list of recommended practices, in roughly descending order of importance, that will result in functional, sustainable, community-appropriate and economical new schools:
- 1. Proceed essentially as an owner/builder. Your district is now more solvent than anyone you might have turned this over to — you have just passed your bond issue and have $20 million in fresh credit. Hire an experienced local construction manager who will serve as the “single point of responsibility.” Hire your own staff and consultants as needed. Choose local architects and contractors. If your remote little town has a lot of small firms, encourage architects to partner up. Break up the construction into smaller contracts that locals can handle.
- 2. Conduct community meetings to solicit input, but don’t just go through the motions. Ensure that the final designs reflect the input as much as reasonable and possible.
- 3. Do your own research and be wary of experts, including state regulators, inspectors and bond salesmen. If there are architects or builders on your board, do not cede them undue influence — the district is not their client, and like you, they are there as adherents.
- 4. Have a real debate on whether you really need a new building. Would a remodel do? Often, ridiculous reasons are presented for giving an existing building the death sentence. I recall how, years ago, Gunnison avoided a costly new bond with a community barn-raising of new modular classrooms.
- 5. Have a real debate about the general concept: does it have to be a custom, potentially award-winning monstrosity, hastily sketched on a laptop by some far-off intern? Does it have to be surrounded by acres of asphalt and bluegrass? Does it have to be built like a prison so that students can’t sneak off and smoke and parents have to go through Homeland Security checkpoints? Say again why we can’t have opening windows, or classroom doors to the outdoors, or solar panels, or community gardens, or any number of innovations that speak to a unique, one-of-a-kind community?
You’ll get an immediate outcry from the enforcers of conventional wisdom: Schools have to be like this, and you have to hire someone who has built other schools like this. Besides, nobody locally would have the expertise, the esoteric knowledge, the resources, the bonding, the licensing, the insurance, ad infinitum, and we can’t afford the extras you speak of.
None of this is true, and you are being hustled. In every way, superior results can be achieved, at less cost, by staying local. And, if something does go wrong, you can seek redress no further than your fellow citizens and neighbors, rather than some superintendent furiously churning through the punch list so he can pack up the construction trailers and get back home to Fort Collins or Provo.
The same holds true for all of our new town halls, libraries, museums, police and fire stations, hospitals and clinics, senior centers, rec centers and government-owned housing projects. Small towns and tax districts are being hustled by companies who promise lower costs, yet their bids are padded with the not-insignificant expense of relocating serious human and mechanical resources to your far-flung little burg. If you are repelled by the WalMarting of your local retail economy, you should be equally repelled by the WalMarting of our schools and public buildings. In an era where individual consumers are pulling their money away from the big banks, it would be nice if our local movers and shakers could start resisting the hustles of the “experts” and carpetbaggers. If local institutions start granting their host communities more respect, I believe good karma will flow back.