At a time when Browards school district cant afford to repair its decaying school buildings, it has spent more than $1 million on a controversial maintenance facility that will likely never be completed.
Broward Schools Superintendent Robert Runcie moved last year to cancel the project, planned for an overgrown lot in a remote section of western Pembroke Pines. Yet the checks kept going out two installments in 2012, totaling just over $1 million.
The question of whether those payments were justified is at the center of a dispute among Runcie, the district administrators who signed the checks, district auditors, and the company involved, Palm Beach County-based Royal Concrete Concepts. Royal Concrete specializes in building portable classrooms/office buildings.
The School Board will likely attempt to sort it all out in the coming weeks.
One thing is certain: Royal Concrete has delivered no buildings, obtained no building permit, nor even provided a completed set of building plans. And now it is asking for another $200,000 to agree to an out-of-court settlement, according to a letter the companys attorney sent to the school district last month. The company says it is still owed money for design fees and other work, plus a delivery fee of $48,545 to bring its portable buildings to the districts property.
School district staffers who signed off on the payments said they were legally bound to pay for work that had been done. Internal auditors, however, say the district made a million-dollar mistake.
School Board members demanded the project be shut down about two years ago. As it lingers, some wonder why the district has been unable to exit the deal.
Jeez, what do you have to do to kill a project around here? School Board member Nora Rupert told The Miami Herald in a recent e-mail. Take out a billboard ad?
The Florida Department of Law Enforcement, prompted by a complaint from a district employee, has investigated the issue.
Law enforcement found nothing criminal, but FDLE concluded that it did appear as if there was a concerted effort by an entire chain of command within the school system to make sure Royal Concretes invoices got paid, even regardless as to whether or not [the School Board] actually owed Royal Concrete the total amount paid .
Browards internal auditors, meanwhile, criticized the district for making payments before the company had delivered permitted drawings or obtained a building permit. Two audit reports one in 2011 and a second released in May 2013 cited work that was paid for but not done, including $112,275 for permitted drawings and $129,279 for drainage work.
The land is in no condition for building. So the portables Broward purchased remain in Royal Concretes Okeechobee plant unfinished, unused and gathering dust.
Reached on his cell phone, Royal Concrete President Dean Locke declined to comment.
Public records obtained by The Miami Herald (including FDLE reports, school district staff emails and legal documents) demonstrate that high-level Broward administrators felt strongly that the company should be paid.
In a Nov. 17, 2011, email, then-Deputy Superintendent Tom Lindner promised Royal Concretes president that he would even testify on the companys behalf if the disputed contract ever ended up in court. Lindner wrote that hed already alerted the superintendent to his intentions, and that many other staff members felt the same.
Lindner was forced to resign in December.
Royal Concrete is well-known in school districts across Florida. The companys concrete portable buildings described as concreteables, or Legos on steroids have been popping up across the state after voters approved the class-size amendment in 2002. The amendment led school districts to scamble to add classroom space, and Royal Concretes product more closely resembles a permanent building than traditional trailer-type portables.
By the time Broward selected Royal Concrete for the maintenance complex in 2008 (using a no-bid contract that later turned out to be expired), they had an established relationship from past deals to build portable classrooms.
Royal Concrete also sponsors events held by the Florida School Boards Association (and gets to speak to attendees in return). Four years ago, Royal Concrete hosted a campaign fundraiser for School Board member Ann Murray. Murray, who is now running for re-election, said recently that she would not accept any contributions from the company this time around, due to the ongoing legal dispute.
They have an honest reputation, Murray said of the firm. But with this contract, she said, Things were done without the paperwork in place, and thats when it gets cloudy.
The maintenance project, years in the planning, called for 24 portable buildings, at a total projected cost of about $5 million. Its cost was justified by the rapid population growth in southwest Browards suburbs, and the idea that a satellite office would reduce the driving time to service schools in the area. The property is near Stirling Road and Southwest 202nd Avenue, blocks from the Everglades.
When Runcie came in as superintendent in fall 2011, he was skeptical.
Even if the district had money, its like, why do we need another maintenance facility? Runcie said. Weve got to provide for our students first, and everyone else has got to take a back seat to that.
Runcie ordered the project halted in January 2012, and at the time he expressed confidence that the district would not have to pay very much for the work already performed, particularly when district auditors found Royal Concrete hadnt been operating with a valid contract.
Audits also found that the concreteables were built without approved design plans and without any inspections during the assembly process both violations of the Florida Building Code.
Months passed after the first critical audit, with Broward taking no formal steps to exit the contract.
In the meantime, Royal Concrete got its concretables certified by the state, even though the company according to Department of Business and Professional Regulation records told state regulators the structures were built improperly. The state used X-rays to ensure that two of the concretables were structurally sound and then certified the whole two dozen.
The district suddenly faced a tougher legal case to avoid paying for them. Broward then paid out more than $1 million (nearly $900,000 for the concretables, the rest for site work and design services) in May and August of last year. The districts legal staff signed off on the payments, concluding it was for work completed and noting that Lindner and two other administrators approved the payments.
Runcie says he only found out after the fact.
I didnt provide any authorization, I didnt have an opportunity to view any documents related to it, Runcie said. It just happened, which is why a lot of people are concerned.
The questions surrounding this project continued into March of this year, when Broward school district administrator Sam Bays sent a text message to Locke, the company president.
Who is your lobbyist? Bays asked.
FDLE investigators asked Bays, who for a time served as project manager, why he would be texting the companys president.
Bays brought his attorney for the sit-down with FDLE. Regarding the text message, Bays responded that he wrote it on behalf of a School Board member.
Which School Board member, specifically? Bays told investigators he couldnt recall, but that the board member wanted to avoid the lobbyist if they ran into each other during the annual legislative session in Tallahassee.
Bays told The Miami Herald he stands by that explanation and declined to comment further.
Runcie, meanwhile, said his delayed discovery of the payments shows that some internal processess need to be improved. He stopped short of calling it insubordination.
Still, the contract was one of the reasons he forced Lindner to resign. The Facilities and Construction department that Lindner oversaw is also being overhauled many mid-level management positions have been eliminated. The district plans to hire a for-profit management company to assume the construction oversight duties that were previously handled in-house.
Lindner denies doing anything wrong, and he said Runcies chief of staff was included in discussions before the second check went out. After Royal Concrete got its buildings certified by the state, Broward was legally on the hook to pay for them, he said.
That really was the leverage that we had, Lindner said. It really kind of put us on the defensive.
The legal wrangling over the project comes as the district is trying to distance itself from past construction problems.
A 2011 state grand jury report criticized Broward for reckless spending of taxpayer money, and two former School Board members have been arrested on corruption charges in recent years.
Since those arrests, Broward has a new superintendent, and a mostly new School Board. The district argues that it has installed new safeguards to make its conduct more ethical and financially responsible.
With Broward in desperate need of additional capital improvement dollars the ceiling at Oakland Parks Northeast High School caved in earlier this year the districts ability to show such progress has become more urgent.
To raise the money it needs for school repairs, officials are considering asking county voters to approve either a bond issue or sales tax increase. To succeed, school district leaders would have to convince voters they can be trusted stewards of the $1 billion or more such a campaign would raise.
Count parent Nick Sakhnovsky among the skeptics. As a longtime member of the school systems Facilities Task Force, Sakhnovsky is deeply familiar with the Royal Concrete project. Sakhnovsky said its long list of problems, including questionable payments, and worrisome behavior by district staff, makes him doubt that Broward has earned voters trust.
If it cant be done right when theres very few projects, it scares me to think how much can go wrong when they have even more money to play with, Sakhnovsky said.
Although Lindner resigned, other district employees involved in the deal were promoted.
Bays, who signed off on paying out $1 million, was promoted to maintenance director. Lindners replacement as construction chief, Shelley Meloni, also signed off on the payments. Meloni has received two pay raises in the past year jumping from $106,883 to $129,328 annually.
I certainly work hard on a day-to-day basis ... Sams a hard worker, hes done tremendous work, Meloni said of her and Bays. I think we have served the district well.
Runcie emphasized that the district has made significant internal changes amid the Royal Concrete controversy, and he said the district is willing to fight the company in court.
Were going to go through a process to make sure that we can identify and validate that work was done and/or services received for every dollar that we paid out, Runcie said. Anything that does not fit that, were going to contest it and challenge it and try to protect the districts funds.