CONCORD — Accusations continue to fly around the Mt. Diablo Unified School District’s nearly $50 million energy contract with Schneider Electric — a retrofitting project that was sold with the promise of massive multiyear savings on utility costs, but has since become the center of controversy amid accusations of lax oversight, bloated costs and the company’s failure to deliver.
The fallout reached a new level this week, as independent oversight officials have repeatedly hit a wall when requesting accounting records from both district officials and the energy contractor — sparking calls for a recall of the school board, which unanimously approved the deal.
Between modernizing heating and cooling equipment, lighting fixtures and building control systems, this project was first presented in fall 2021 as a way for the district (MDUSD) to not only reduce its energy consumption, but also save money. It was funded by Measure J, a $150 million property tax bond that voters approved in 2018 to tackle a broad list of potential school improvements, including infrastructure repairs and classroom technology upgrades.
Members of the district’s Citizen Bond Oversight Committee (CBOC) have spent several months filing public records requests, digging through state workforce filings and contacting contractors directly to investigate concerns of financial impropriety involving Schneider Electric’s contract, which was revised several times and ballooned to $50 million between Aug. 2021 and March 2023, but was unanimously approved by trustees with little public discussion.
Compiled with some records provided by the district, the CBOC has since uncovered evidence suggesting that the Texas-based multinational company may have inflated construction fees, manipulated savings projections and reneged on agreements to utilize only local labor for the project, which accounts for one-third of the cash-strapped district’s Measure J funds.
On Monday, Gina Haynes, CBOC chair, said she is concerned that Schneider’s profit margins seem excessively high for the first phase of the project, which involved the original $24.3 million contract approved for districtwide installation of new LED lights.
Haynes said the school district and contractors have stonewalled the CBOC’s requests for detailed accounting records and independent legal advice about the bond-funded project — hindering their investigation and forcing the volunteer commission to jump through hoops to access basic information, despite promises of transparency and savings guarantees within Schneider Electric’s initial proposal.
“This is not anything close to transparency,” Haynes said during a special meeting Monday, adding that no school board members have publicly responded to any of the CBOC’s letters, comments at board meetings or requests to attend oversight discussions.
Elliot Feldman, a program manager for Schneider Electric who attended Monday’s meeting, did not comment on the allegations. Attempts to reach Schneider for additional comment before publication were unsuccessful.
Since May, the CBOC has filed complaints about Schneider Electric and MDUSD officials with the county’s civil grand jury and District Attorney Diana Becton’s office.
Jim Walsh, a longtime CBOC member, said he is personally concerned that the board may retaliate and remove oversight officials who voice their opposition and raised the possibility of a recall effort against MDUSD’s trustees.
Without the district’s cooperation to provide financial and legal resources the CBOC requests to assist their investigation, he feels they have been diminished to “an afterthought committee” without any actual power to fulfill their legal duties.
“I don’t know what other course of action we could take (besides a recall) to hold them accountable,” Walsh said in an interview.
During Monday’s meeting, Phil Otto, a 69-year Concord resident, agreed: “I would suggest that the entire board be recalled in hopes that a new board will do a better job of protecting the taxpayers’ money.”
There is no concrete timeline for when a recall may be discussed in a future CBOC meeting.
The company purported that MDUSD’s cumulative savings would hit $1.8 million — 80% of their annual utility expenditures — after one year, and surpass $53 million within 20 years, according to the March 2023 contract. However, Schneider’s initial rosy promises of energy cost savings were watered down and eventually withdrawn by the time district officials greenlit the company’s final plan 14 months after the first agreement was inked.
In the year after the first phase of the project was complete, the district’s energy savings were only 7%, according to Schneider’s own numbers. Haynes said this discrepancy appears to be connected to Schneider’s baseline calculations, which she said were inflated by more than $600,000, according to PG&E bills and Energy Star data obtained by the CBOC.
While no trustees attended Monday’s meeting — despite explicit invitations — none of the district officials present refuted these concerns of financial impropriety.
However, Superintendent Adam Clark has previously defended the project’s legality and completion, arguing that the CBOC’s repeated requests and complaints about the bidding process and energy savings of Schneider’s project are “clearly outside of their scope of responsibility.”
While the ink has long dried on these contracts, there may still be a chance for the CBOC to mitigate financial mismanagement; Haynes said MDUSD still owes Schneider Electric roughly $10 million for the second phase of construction, which was a $25.1 million contract for installation of HVAC systems.
“We need to dive deeper into this because there is still some money on the table,” Haynes said. “Who is watching the hen house? Are we just opening up our checkbook and letting people dig into our Measure J money?”
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