After experiencing years of botched construction projects, Broward’s school district on Wednesday approved a controversial outsourcing plan that it argues will restore credibility — while also saving taxpayers money.
The dramatic shift required laying off more than 40 in-house employees last year. It’s too soon to say whether the change will improve Broward’s construction practices, but there is already lots of criticism.
For one, Broward picked its new project manager, San Franciso-based URS, with a selection process that was rife with irregularities. The district’s Facilities Task Force, a citizen oversight group, even took the unusual step of holding a protest vote over how it took place.
Among the problems: Broward’s selection guidelines were so confusing that when a tie between two companies occurred, the district didn’t know how to pick a winner. Then, two of the competing firms were abruptly disqualified — an action that solved the tie-vote dilemma but left some observers even more suspicious of the process.
On Wednesday, the Broward Teachers Union, which represents some of those who lost their jobs, complained that the district’s new project management contract is blatantly more expensive than what in-house employees used to earn. Broward’s new $1.7 million agreement with URS will allow the company to charge a 45 percent markup on its services.
Some of that markup is supposed to be pay for rent and other overhead costs but, the union contends, Broward may ultimately allow URS to operate rent-free at a district-owned building. That scenario would mean that URS could pocket the entire 45 percent as profit.
“That’s a pretty good markup,” said Virgil Cruz, the union’s vice president of technical support professionals. “I would say that’s a pretty good business to get into.”
Thanks to the layoffs, there are now other services — such as architectural design, engineering and the prioritizing of construction projects — that Broward will need to hire additional private companies for. The cost of all those contracts put together may well exceed the $3.1 million that Broward saved from the layoffs.
Cruz and other union officials argued against the outsourcing before Broward’s School Board, but the plan was approved by a 6-1 vote. Board member Nora Rupert cast the lone “no” vote.
“I’m not saying we don’t need a change,” Rupert said. “My goodness we do need a change, I’m just not exactly sure this is the change.”
Leading up to the vote, Broward Schools Superintendent Robert Runcie insisted that the outsourcing would ultimately save money. He also emphasized that the district needs to change the way it does business, in hopes of finally fixing its Facilities Design & Construction Department. The department has repeatedly been a source of embarrassing scandals — both for wasteful spending and unethical back-room dealing.
But some who led the department, and who were heavily involved in past mistakes, got to keep their jobs. It was largely rank-and-file employees who were dismissed.
Broward has a massive backlog of needed school repairs — such as leaky roofs — and little money to pay for them. The district is considering asking voters to approve a bond issue similar to the $1.2 billion spending plan approved by Miami-Dade voters in 2012. In asking for public support, Broward will likely cite the outsourcing as evidence that this is a new-and-improved facilities department.
“This is a great opportunity for us to make a significant departure with the past and to continue to move forward,” Runcie said.
Broward School Board member Donna Korn, in supporting the outsourcing, said the profit margin for URS was unimportant if the district ultimately saves money.
“A business would not be in business if there wasn’t a profit,” she said.