For release Wednesday, May 20, 2009
For further information contact
Art Johnston ***-***-****
Harry Welty ***-***-****
Art Johnston, an engineer with the US Forest Service and one of the taxpayers challenging the contract between the Duluth School District and Johnson Controls in the Sixth District Court has completed a cost analysis which suggests that Johnson Controls ginned up excessive and unwarranted repair costs for the Duluth Schools.
In 2006 the Duluth School District’s estimated ten-year repair costs at all its schools was $36,785,461. One year later Johnson Controls estimated it would cost $202,012,169 to repair all of Duluth’s Schools.
Johnston’s analysis reports: “A comparison of the two lists shows that many of the items are identical, and that in nearly all cases, the JCI estimates are significantly larger than the original District numbers – sometimes by a factor of 50% to 400%.”
These exaggerated costs are coming at a heavy price to local taxpayers. In an affidavit presented to the Sixth District Court this week the financial advisor for the Duluth Schools, Michael Hoheisel, says the District plans to issue another $70 million bond this summer with additional bonds to follow later in the year and in 2010 or 2011.
An affidavit filed by Johnson Controls Regional Solutions Manager, Leonard Fretland, tells the Court that he estimates that delays to the $293 million Red Plan could cost between $5 and $40 million dollars.
This loss pales compared to $165 million jump in costs from the District’s original repair estimates to those of Johnson Controls. The taxpayers bringing suit against Johnson Controls and the School District have asked the court to levy punitive damages against Johnson Controls for knowingly offering an unlawful contract to the School District and depriving taxpayers of the savings a competitively bid contract would have insured. If such an award was made it could reduce these losses and might result in a less expensive building project.