Overpaid or not?


The Welcome Center and new wing of classrooms were completed by Glenn Construction, 2011.

Gym A, the large theater, the library, the 700s, the Art wing, the two-story 800/900 hallway, the Welcome Center and its adjoining classrooms and lab. Glenn Construction, the district’s program management company, coordinated each of these projects that reshaped the nature of the EHS campus.

“I absolutely love my classroom,” Mrs. Debbie Powell, Family and Consumer Sciences teacher, said. “It was really great because we got to work with the architects to plan it and make everything usable space.”

For over a decade, Glenn Construction served as RSD’s primary provider for all construction-related projects.

“In that role, they would help the district identify projects and the scope of the project,” Mr. Tim Rooney, Chief Financial and Legislative Officer, said. “Then they would help select architects and oversee the project.”

Glenn Construction came under severe scrutiny after claims stating that they caused Rockwood School District an overpayment of approximately $1.2 million after work done through a 2010 bond issue when a state audit reported that the district may have overpaid Glenn Construction by $1.2 million over a span of ten years, according to state auditor Mr. Thomas A. Schweich’s findings, Feb. 2013.

“It appears the district overpaid this program management company by paying a percentage fee of estimated costs rather than actual costs and by paying $1,203,178 in additional fees for change orders for work not contemplated in the original contract,” Mr. Schweich said in his audit report of the district.

In other words, the audit report proposes that the $1.2 million given to Glenn was an overpayment due to the ordering of more construction projects.

Students, as well as the community, are not fully aware of the entirety of the situation, which received negative coverage from a multitude of news sources.

Among the various articles and tidbits of news from the St. Louis Post-Dispatch, the Eureka-Wildwood Patch, West News Magazine etc., the public has received an abundance of information that proved to be misleading at best in light of the findings of Mr. D. Lynn Whitt, President of The Challenge Group, Inc. and financial expert with background in construction litigation whom the district-hired law firm Lashly & Baer found to review the audit’s findings. He shared his findings at the BOE meeting, Aug. 15

“What [the Auditor] said he needed us to do was to get a legal review and then find out whether or not there were over payments and whether or not they could be recovered,” Mr. Matt Doell, Board of Education Director, said in a phone interview, Sept. 10.

Mr. Whitt reported that the district did not overpay Glenn Construction.

Originated due to 2010 bond issue, the primary contract for the projects completed by Glenn provided the district with a specified sum of money devoted to construction projects.

Once the projects were completed under budget, RSD was left with the remaining amount to order more projects that had not been mentioned in the original contract, referred to as change orders.

“The expert went through and reviewed how this fee was calculated and when they added additional projects, and whether or not we should have paid them the additional fees,” Mr. Doell said. “The answer was yes. The contract negotiated a firm fixed fee for a list of projects we were going to do. When those projects came in under budget, we had additional bond funds that we could use for more projects. When the contractor managed additional projects, he did more work and he got additional fees for that.”

Students, among the rest of the public, have been confused with the main dispute regarding the district and Glenn: whether or not RSD actually overpaid the company by $1.2 million.

“Even if we overpaid them but we got what we needed done, then I don’t think we should worry about it,” Brittney Blunt (10) said. “But if we didn’t and we still overpaid them, then I think we should get the money back.”

Mr. Whitt reported that Glenn Construction actually saved the district money.

“Because of the favorable economic climate during the bidding period, that $30 million worth of projects actually cost about $20 million,” Mr. Rooney said. “When it came in at $20 million, the district benefited because they had the additional $10 million worth of projects that they could expand on.”

Glenn was then paid for those change orders with the remaining sum of money from the bond issue.

The language of the initial contract determined that the costs calculated for the change orders were to be counted as additional fees rather than an overpayment.

While the issue of the possible overpayment affected RSD’s financial credibility, the reputation of Glenn Construction also received a brutal beating.

“Glenn Construction has gotten a negative spin from this whole thing,” Mr. Rooney said. “This was an audit of the school district, not of Glenn Construction. Since I’ve gotten to the district, I’ve had nothing but praise for the work that Glenn has done.”

After five attempts over the past week to contact the company and former employees, a member of Glenn Construction could not be reached for comment on the matter.

“There may have been mistakes made or there may have been things that could have been done differently, but as far as anyone trying to do something illegal, unethical or immoral, from my perspective, I never ever saw anything like that,” Mrs. Deborah Asher, head principal, said.

While the expert’s findings vindicated Glenn Construction and the district, the perception of wrong-doing proved damaging.

“Even if you’re doing things in a legitimate way, if it looks like there’s a conflict of interest, then that’s a bad thing,” Mr. Doug Dietrich, business education teacher, said. “Perception is more important than reality, and the perception is that it was not a good situation.”

Although Eureka students may not have been personally affected by the audit dispute, the prominence of this specific situation has caused many to expand their interest for events going on within RSD.

“I think it’s important for us to know what’s going on in the district,” Aileen Markovitz (11) said. “Since we’re older, we’ve seen the changes over the course of our existence in school.”

A lack of public understanding creates roadblocks not only in the community but in the school as well.

“It impedes us moving forward when people either are not aware or have misconceptions about what has taken place,” Mrs. Asher said. “We find ourselves in a situation where the construction plans that we had have not been able to progress to the next step.”

With high school comes the realization that students will soon find themselves voting on and judging these decisions for themselves.

“We’re affected by these situations,” Josh Tipton (10) said. “A lot of the things that we depend on and rely on in school can be changed due to financial situations.”

More information regarding the background of the district audit can be found in the Program Management Review.