Local Views Counterpoint: ‘We Got Value, Without Cronyism’

Let’s dissect the central theme of Zis Weisberg’s 9/18 Local Views column: “We deserve the best possible value for the dollar, not cronyism.

First, the dictionary definition of “cronyism” is “the appointment of friends and associates to positions of authority, WITHOUT REGARD TO THEIR QUALIFICATIONS” (emphasis added).

Is Weisberg claiming that BWBR, the architectural firm, and Baird, the financial services firm, are not qualified to do the work they were contracted to do?

BWBR is one of the Upper Midwest’s oldest and largest design solutions firms and is consistently ranked in the top five architectural firms in the region. They have been working with the district for more than 20 years going back to Rutherford Elementary and, more recently, the ECFC. In addition to education, BWBR regularly handles multi-million dollar projects for the Mayo Clinic and Fortune 500 companies like 3M.

Baird has been around for more than 95 years, handles $171 billion in assets for clients and has 3,300 employees on three continents. Mike Hoheisel, a managing director at Baird, has been a senior VP specializing in education financing at Northland Securities and is affiliated with the Minnesota School Boards Association, the Minnesota Association of School Administrators, the Minnesota Association of School Business Officials, the Minnesota Institute of Public Finance and the Minnesota Rural Education Association.

Unqualified? Like most of his assertions, Weisberg’s use of “cronyism” fails the fact test.

But did we get the best possible value for the dollar with BWBR and Baird?

In 2015, BWBR was unanimously approved by the school board 6-0 (Mike Ptacek voted yes) as the architectural and design firm for the proposed facilities plan. A 1/19/15 Stillwater Gazette article on the vote noted that Kathy Buchholz abstained “due to her husband working for the medical design department of BWBR.”

BWBR was chosen over two more expensive bids and two less expensive bids. Then-district director of operations Dennis Bloom said “the selection team felt that BWBR was more familiar with our district.” He also said that BWBR had a respected education planner, they were committed to working with local engineers and that the BWBR proposal “showed that they had really studied our long-range facilities plan and were bringing some innovative concepts and ideas. They are going to be able to hit the ground running and work in our tight schedule.”

BWBR President and CEO Pete Smith certainly had a vested interest in providing the best value because he was a resident of the Stillwater Area School District who said he moved to the area specifically because of the district schools, which his two children attended.

Working with Baird and Michael Hoheisel, the district was able to secure six proposals for facilities bonds approved in the May 12, 2015 referendum with interest costs ranging from 3.027 to 3.75 percent. The school board awarded the bid to Piper Jaffray, which offered an interest rate of 3.027 percent and structured the deal to save the district over and above the rate.

The bottom line: Baird and Michael Hoheisel saved the district approximately $13.15 million.

The voter-approved borrowing amount went from $97.5 million to $90.565 million. Principal and interest that was conservatively estimated at $140.5 million went down to $127.342 million.

Value is about more than cost. Quality, expertise, cooperation, service and going beyond expectations also factor into value. Weisberg’s primary claim that we didn’t get the best possible value for the dollar with BWBR and Baird also clearly fails the fact test.

 

  • ISD834 parent

    Although you have correctly quoted a dictionary definition, I immediately understood Dr. Weisberg’s use of the term as referring to “an economy in which businesses thrive not as a result of risk taken for them, but rather, as a return on money amassed through a nexus between a business class and the political class.” I hope you’d agree that phenomenon is out-of-control in our country with “bought and paid for” politicians of all parties, and what he describes is merely a local instance of that widespread cancer. That this racket is doing it efficiently in the manner you describe only makes it worse from my point of view. That’s bad enough, but the triple-whammy in this case is that ISD834 could pull it off only by using the additional subterfuge of flagrant and unashamed deception of voters which is leading many to take a “fool me once, shame on me, fool me twice…” attitude toward future district bonds and levies. I would include myself in that group. Having adopted a stonewalling posture for the last year and a half with regard to this, the district apparently feels voters will have forgotten by the time their next request for money rolls around which appears to be imminent. In fact, if as much has been saved as a result of the “savings” you suggest, with ISD834’s declining enrollment there should be no need for more money for a very long time. “Oh, what a tangled web we weave…when first we practice to deceive.”

    • Bob Katula

      If Weisberg had used the word “red,” would you have immediately understood it to be “fuchsia” instead? He used the word cronyism. The obscure definition that you plucked out of the internet’s laziest source of information, Wikipedia, refers to crony capitalism, which has more to do with lobbyists seeking preferential regulation and favorable government intervention.

      Maybe you’d prefer the Business Dictionary definition of cronyism: “The act of showing partiality to one’s close friends, typically by appointing them to a position in a company or organization despite the individual not necessarily being the best person for the position. Although this is favoritism is frowned upon in many cases, it is often hard to determine what is or is not cronyism. In general IT IS NOT WRONG TO HIRE OR APPOINT SOMEONE YOU KNOW, AS LONG AS THEY ARE WELL QUALIFIED, so the boundary between the two scenarios is very unclear. Although accusations of cronyism are prevalent, they very rarely amount to any disciplinary action or removals from power.”

      Kathy Buchholz did not hire or appoint her husband. Kristen Hoheisel did not hire or appoint her husband. Both firms they work for are highly qualified and have delivered excellent value. Those are the facts. Putting quotes around “savings” doesn’t change the fact that real money was saved.

      834 Voice and its President, Weisberg, love to claim that they have lost in court time and time again due to technicalities and misinterpretations of the law. But now their last gasp rests on technicalities and implausible interpretations of the law. The district’s taxpayers were not screwed over by BWBR & Baird. There was no nefarious intent to skirt the law for personal gain by the Buchholz’s or the Hoheisels. But that’s beside the point for the vindictive Weisberg and anonymous cowards like you who want their pound of flesh.

      • ISD834 parent

        < "There was no nefarious intent to skirt the law for personal gain by the Buchholz's or the Hoheisels."
        When you have to cook up a scheme in dark of night to close three schools months after selling the public something to the contrary under false pretenses that in fact resulted in personal gain, legal or not, only terminally naïve person would conclude "no nefarious intent." The pound of flesh I and many others are after is not money but showing the door to blatant deceivers.

        • Carl Blondin

          The blatant deceivers were Tom Nelson and Denny Bloom. You attack the honest broker, Denise Pontrelli. She tells the truth and you have a hissy fit. What is your solution? Keep open 10 elementary schools and stuff high school classes with 40 students? Act like an adult, please. I am sick and tired of 834 Voice wrapping itself in victim status. Real tired.

        • Bob Katula

          It must be disheartening to know that most people in the district have caught on to the 834 Voice hyperbole by now and understand the clear distinction between the 2015 bond under the Tom Nelson administration and the 2016 consolidation under the Pontrelli administration 10 months later.

          You need to lose the talking point about subterfuge, deception and false pretenses in the matter of the bond. That argument has been dismissed by the courts, not once, not twice, but FIVE times.

          1) In August 2016, district court judge John McBride dismissed the case of Melissa Douglas alleging that the school board’s vote to close schools illegally changed the use of bond proceeds. 2) In June 2017, the Minnesota Court of Appeals found that the school board’s decision did not abandon the purpose of the bond referendum. 3) In April 2017, the Minnesota Court of Appeals upheld the board’s vote to close schools, saying “School boards are empowered by the Minnesota Legislature . . . to open, close, or reorganize schools as [the board] may deem advisable.” 4 & 5) In March 2017, Anoka County District Court Judge Daniel O’Fallon dismissed claims that the BOLD plan violated the state bond statute and the Minnesota Fair Campaign Practices Act by reversing promises made during the 2015 bond levy campaign.

          And if BOLD was a scheme cooked up in dark of night, the administration did a terrible job of keeping a lid on things by releasing the initial 24-page BOLD rationale and the BOLD Right-Sizing Our Schools Fact Sheet at the School Board Learning Session on December 17, 2015. That gave the board, parents and concerned members of the community a little less than three months to conduct public hearings and review the “secret” plan before it went to a vote.

          Interesting that you admit (anonymously) that you and many others are after a pound of flesh. The meaning of the phrase tells us a lot about the spite and nastiness that drives 834 Voice. A pound of flesh is something that someone merciless and demanding insists that they are owed, knowing that it will be hurtful or difficult to provide.

        • MNGophers

          “Blatant deceivers”…? OK? Just because you have lost every court case, you did not get your way regarding the necessary closing of 3 schools, and you continue to see losses mount on your side, it therefore must be due to deceit, cronyism, lack of transparency, etc? Brilliant…

          Oh, btw, who funds 834 Voice? It would be nice to see transparency there.

  • I’ve served on nonprofit boards and worked for nonprofits and been involved in other organizations with accountability to the public. One of the “Golden Rules” I learned early and have lived by is that “the appearance of corruption is equally as harmful as corruption.” If they had nothing to hide in awarding lucrative contracts to their friends and family, they should have been upfront and transparent about it, but instead it was obscured in every way possible and their response was never to apologize but to rationalize. You can get hung up on how what dictionary defines one word in Zis’s article, but the fact is this behavior is not befitting a public agency spending public dollars and managing public resources. Awarding lucrative contracts to friends and family obviously has the appearance of corruption and conflict of interest, and should have been addressed head on. Because it was not, it has eroded public trust, which was further eroded by objectively deceptive (if legal) behavior regarding the school closures. Bob, I’m sorry you’re so angry, but this board has lost the trust of its community, and trust can’t be argued back into existence.

    • Bob Katula

      Greg, my only objective as a community journalist is to counter the misleading information and unsubstantiated allegations constantly made by Zis Weisberg and the organization he leads, 834 Voice.

      Is one of your “Golden Rules” telling the truth? Because your comment only perpetuates the lies that stoke the 834 Voice narrative of misinformation.

      I hate to go all Dwight Schrute on you, but:

      FACT: Kathy Buchholz and Kristen Hoheisel did not award lucrative contracts to their friends and family.

      FACT: Kathy Buchholz and Kristen Hoheisel were upfront and transparent about their husbands’ connections to businesses with which the district did business to avoid actual corruption and the appearance of corruption.

      FACT: Kathy Buchholz abstained from the 6-0 vote to award the contract to BWBR, as the Gazette reported “due to her husband working for the medical design department of BWBR.”

      FACT: The school board, not Kristen Hoheisel, approved the contract with Baird.

      FACT: The payment to Baird was not authorized by Kristen Hoheisel. She had no authority to make the payment. The payment was wired by Piper Jaffrey.

      FACT: The conflict of interest allegations have NOTHING to do with the school closings, but are part of the wide litigation net cast by 834 Voice to punish someone, anyone in their vindictive and divisive quest.

      • Bob – I’m not part of Voice 834 and thus my allegations are not part of any such “quest.” Like I said, the district leadership has lost the trust of the community and all your “facts” can’t change that, because other facts get in the way. The board and admin lost my trust at two specific points during the school closure process, when they ignored or misled the public:

        One, when the Met Council told them they were completely misinterpreting their population projections. The district insists population will decline in the northern part of the district in the next decade, and they used a Met Council PowerPoint slide as “evidence.” But then the Met Council said nope, that’s not what they said, no one from the district every actually contacted them to get the facts straight, and actually the population is expected to increase. The board and admin were informed of this mistake and chose to ignore it and continue misleading their constituents.

        Two, when the authors of a research paper about optimal elementary school sizes, which the district used as the foundation of its argument for fewer, bigger schools, told them they had misinterpreted their results. In fact, it was shown they had basically plucked the “400 students per school” goal out of the paper, even though it was merely an example number and in no way supported by the research. At public hearings, the board and admin were informed of this mistake and did not respond, and continued to push for that arbitrary numerical goal as justification for closures.

        My child’s school was not closed, but I’m glad that we have a new, truly “bold” elementary option in the area. While I’m grateful for the community members who worked so hard for the future of education in this area, I’m also relieved we don’t have to send our kids to a school under the purview of District 834. They have shown themselves to ignore data and the community, and make really poor decisions as a result. Closures aside, I worry about their ability to continue the district’s tradition of excellence in many regards. As a graduate of 834, that makes me pretty sad. Arguing with me and others who are mourning these failures isn’t going to change any minds. Listening might.