Duluth school officials in court today over facilities plan

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Duluth schools administration building
The Duluth School District is headquartered in the ornate Central Administration Building; itself once Duluth Central High School.
MPR Photo/Bob Kelleher

The complaint filed by five individuals does not challenge the Duluth school district's long-range school facilities plan. That's the plan to close seven school buildings, build four new and remodel several others. Instead, they're challenging a deal the district made with Johnson Controls, a company that specializes in energy efficient buildings.

Johnson Controls was paid $250,000 to help develop the Duluth facilities plan and will be paid a percentage of the construction and remodeling costs, a total bill that hasn't been added up yet, but could be millions of dollars.

But opponents say that deal was unlawful. Attorney Craig Hunter of Duluth said the district has to follow its own competitive bidding requirement.

"There's also case law, that whatever procedure a school district follows, it's got to be reasonable," Hunter said. "And it just cannot be reasonable to agree to buy services that end up maybe being in the range of tens of millions of dollars, before knowing what those services are going to cost."

Attorney Sue Torgerson, with the Kennedy and Graven Law firm in Minneapolis, said the district's deal with Johnson Controls was a contract for services, exempt from bidding requirements.

"Minnesota law makes it very clear that contracts for personal services, such as when a school district or public body is hiring an attorney, for example, those kinds of arrangements or contracts are not competitive bidding situations," Torgerson said.

Competitive bidding, she said, focuses on the purchase of goods. The deal with Johnson Controls, she said, purchases a service, not goods.

Meanwhile, the district has thrown its opponents a counterpunch.

The district is asking the court today to make the plaintiffs put up a surety bond - a bond that could cost several million dollars. Torgerson said Minnesota law provides a shield against frivolous lawsuits.

"This statute is designed to protect public entities from exactly this type of suit," Torgerson said. "Not because the suit can't be in court, but because when you have a large public project in the works, a taxpayer suit of any nature can slow those projects down and inflate the costs to the public."

Construction delays could be costly, she said, especially in Duluth with a short building season. And conditions are favorable now for financing, labor and materials.

Craig Hunter, attorney for the opponents of the deal, said he'll argue the bond isn't necessary.

"The statute allows the court to determine what the merits of the plaintiff's case is in determining whether to require a bond or not," Hunter said. "We believe we should win on the merits, and therefore no bond should be required."

But Hunter concedes the five individuals may not be able to post a huge bond and, if approved, they may have to drop the suit.

Meanwhile, in another development, a group organized against the district's facilities plan, Let Duluth Vote, could have problems of its own. Another group, calling itself Move Forward Duluth, has asked the St. Louis County Attorney to look into Let Duluth Vote's fund raising and expenditures. Since Let Duluth Vote was formed to promote a ballot measure, it has to account for its money, according to Move Forward Duluth's Robin Downs.

"We're not accusing them of doing anything illegal," Downs said. "But, we are asking that they play by the rules. They've been very critical of the school district, and accusing them of being less than transparent, and we find it ironic that they're doing just that."

Let Duluth Vote's Harry Welty concedes his group will have to file the financial disclosure statements.

The opponent's complaint on the school's contract with Johnson Controls gets a hearing today in St. Louis County District Court.