Appeals court: School contractor must reveal subcontracts

North Woods School
The future front entrance for the North Woods School in Cook, Minn., part of the St. Louis County school system.
Derek Montgomery for MPR, file

A company hired by the St. Louis County school district to manage a major construction project cannot keep its agreements with subcontractors secret, the Minnesota Court of Appeals ruled Tuesday.

The Timberjay newspaper and its editor, Marshall Helmberger, had asked Johnson Controls, the company overseeing the St. Louis County schools project, to turn over its subcontract with an architectural firm. Helmberger had wanted to evaluate Johnson Controls' use of taxpayer money for the $78 million reconstruction project.

The matter ended up before an administrative law judge, who ultimately dismissed the case. The judge concluded that Johnson Controls' contract with the architectural firm did not meet the definition of "government function" under the state's open records law, the Minnesota Government Data Practices Act.

The three-judge appeals panel concluded otherwise:

"A contractor who contracts with a school district to perform project management, construction, and architectural services for the school district is performing a governmental function within the meaning of the Minnesota Government Data Practices Act and, therefore, contracts relating to those services are public data under that act," it wrote.

Johnson Controls has 30 days to decide whether to ask the Minnesota Supreme Court to review the opinion. Johnson Controls has 30 days to decide whether to ask the Minnesota Supreme Court to review the opinion.

Johnson Controls, a multinational engineering company based in Milwaukee, released a statement saying officials were reviewing the ruling and evaluating the company's options. Meanwhile, the appeals court sent the case back to the Office of Administrative Hearings for further proceedings.

The appeals court issued a published opinion, meaning it could impact future cases dealing with government subcontracts and questions about whether they are public.

"Government agencies spend hundreds of millions of dollars every year on private contracts for a variety of goods and services, and without this statute being interpreted the way the Court of Appeals has, it would be very difficult for citizens to adequately hold government agencies and their contractors accountable," said Mark Anfinson, the attorney representing Helmberger.

Anfinson is representing MPR in a separate matter.

Helmberger said Tuesday he plans to ask the administrative law judge to order Johnson Controls to reveal its subcontracts in the St. Louis County schools reconstruction project. The details of the agreements might allow the district an avenue for recovering cost overruns stemming from architectural errors in the project, he said.

The Timberjay's reporting has challenged Johnson Controls' projected cost savings for the district under the reconstruction plan. The company has said those projections were made in good faith.

"The only way to understand this project in its entirety is to have all the contracts in hand. It was astonishing that the school district did not request all of these contracts from the get-go," Helmberger said.

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