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.