Controversy Surrounds PaliHi's Selection of Pool Contractor

By Danielle Gillespie, Staff Writer

2009-10-29
A group of Palisades Charter High School parents and teachers have recently expressed concern that the selection of a contractor for the Maggie Gilbert Aquatic Center was influenced by inside connections.

  Dorothianne Henne, mother of PaliHi swim coach Maggie Nance, is the office manager for the pool contractor, Sarlan Builders in Beverly Hills. Nance is on the school's pool committee and participated in selecting the contractor from four bidders.

  'This serious conflict of interest was not disclosed ' a full and complete accounting is due to stakeholders,' parent Susan Frank said at a board meeting on October 20. 'Those found responsible, whether employees, administrators or board members, must be held accountable for their actions.'

  PaliHi Executive Director Amy Dresser-Held countered that the school legitimately followed the public contract process by accepting sealed bids and awarding the contract to the lowest responsive bidder.

Nance was allowed to participate in the selection of the contractor because 'Maggie has the greatest expertise in aquatics and pool design on campus and was one of four or five people making the recommendation for the award of contract,' Dresser-Held told the Palisadian-Post. 'She is a salaried employee of PaliHi and her mother is a salaried employee of Sarlan, and neither has received any compensation following the award of this contract.'

  On July 14, 2008, PaliHi received bids from four pool contractors (Earl Corporation, Mission Pools, Heltzer/Heritage and Sarlan Builders). Dresser-Held examined the bids with Nance, PaliHi's Chief Business Officer Greg Wood, PaliHi English teacher Rose Gilbert (who donated $2 million towards the aquatic center, which is named after her late daughter) and PaliHi's Project Manager Chaz Yench (who has 35 years of construction management experience and whose salary is paid for out of the pool account).

  'Heltzer was found to be the lowest bidder by a lot,' Dresser-Held said, noting that the company placed a bid of $3 million. Sarlan Builders bid $4 million; Earl Corporation, $4.9 million; and Mission Pools, $4.9 million.

  The next day, July 15, 2008, the board voted 8-3 to allow the pool committee to select a contractor. PaliHi entered into a 30-day memorandum of understanding with Heltzer.

  After hearing the news, Henne, who is also the treasurer of PaliHi's Booster Club, told the Post she was concerned. 'It was an outlier bid [which means way out of the medium bid],' Henne said. 'I kept telling Maggie, this is crazy.'

Henne feared that Heltzer would submit change orders, which would increase the cost of construction, and as a result work on the pool would be delayed.

However, before Heltzer could begin heavy construction, the school had to receive approval from the Los Angeles Unified School District (which owns the school's land) and the Division of the State Architect. The pool committee submitted the drawings in May 2008.

'We did not get Division of the State Architect approval as quickly as we expected,' Dresser-Held said, noting that the plans were not approved until February 2009.

Since 10 months had passed, the pool committee decided to re-bid the project, she added. The price of construction materials had dropped with the downturn of the economy, the scope of the project had expanded (the architect had inadvertently omitted fire alarms and lighting on the initial plans), and the school had received legal advice to do the project at prevailing wage, Dresser-Held told the Post. Prevailing wage means paying all workers on a job the predominant wage for that trade in the county.

In addition, 'Heltzer was also essentially re-bidding the project by getting all updated bids from their subcontractors,' Dresser-Held said, noting that the administration wanted to compare Heltzer's new price with the marketplace.

On March 12, Sarlan and Heltzer (both using California Commercial Pools as subcontractor) placed bids again. The bids were delivered to Yench in sealed envelopes and subsequently submitted electronically, said Dresser-Held, who was attending a charter school conference in Long Beach with Nance, Wood, and Gilbert at the time.

'We followed the exact same procedure, and Sarlan was the lowest bidder,' Dresser-Held said. Heltzer bid $4.4 million and Sarlan $3.8 million.

'There was no wrongdoing,' Henne told the Post. 'It was a closed bid process'they were sealed bids. We didn't have access; we didn't know who was even bidding the second round.'

On March 17, the 11-member board voted unanimously to authorize Dresser-Held to enter into a contract with Sarlan, which is doing the project at no profit. The total cost for the pool will be between $4.3 million and $4.5 million, which includes the cost for the contractor architect, inspectors, environmental review and permits, Wood reported.

'We are fortunate to have a contractor committed enough to improving the Pacific Palisades community that he was willing to donate his profit,' Dresser-Held said of Ben Lunsky, owner of Sarlan Builders. 'That benefits not just the students and families at the high school but the greater Palisades community.'

However, Heltzer had installed temporary power and fencing before Sarlan was awarded the contract. PaliHi paid Heltzer $16,000 for those services, but 'they felt they needed to be compensated for that time,' Dresser-Held said. 'They sent a letter; they did not file a lawsuit or any claims.'

On October 6, the board approved a no-fault settlement agreement with Heltzer for $25,000 in exchange for full closure and release of all claims. The money will be paid out of the school's pool account. The board decided to settle after factoring in the cost of legal fees, Dresser-Held said. She pointed out that the school still saved money by choosing Sarlan.

Frank, the parent, questioned whether Sarlan had donated to the pool ahead of the contract bidding process. She referenced unofficial pool meeting minutes from March 4, 2008 (before the first bid) that read, 'Please be aware of ' The Palisadian-Post mentioned that we are getting a donation from Ben Lunsky ' and while this may be true, we also need to bid the job out and other contractors might not bid the job if they think it has been awarded already. When asked about this in the future, we should say that we are considering or we are getting an in-kind donation in support of ' but not mention what the service is or who is doing it. We are currently at $1.4 million raised without the in-kind donation of contractor fees (approx. $500,000).'

The Post reported in its February 28, 2008 story, 'YMCA Pool Remains Closed with No Easy Solutions Available,' that 'PaliHi swim coach Maggie Nance, who is also helping raise money for the new aquatics center, said her group has a contractor willing to donate his time, which is potentially a $500,000 donation.'

Dresser-Held explained that Sarlan had bid the project at a no-profit basis both times, resulting in about $500,000 worth of savings, and Wood said, otherwise, 'there has been no donation from Sarlan prior to or after.'

Sarlan began construction work on the pool in late March and is set to complete the project by early 2010. So far, the school has raised about $3.1 million, including $152,000 in pledges, Wood reported.

'We are trying to bring as much money in as we can,' said PaliHi fundraising consultant Jeanne Goldsmith, adding that PaliHi raised $75,000 from family swim passes. The school is currently selling wall tiles for $400 each that will be displayed in the aquatic center.

Wood added that administrators are researching loan options. The loan would be paid back through revenue collected from permitting outside groups to use the pool, playing fields, parking lots, classrooms, meeting rooms and gym.

'We are hoping that we don't have to [take out a loan],' Goldsmith said, noting the goal is to have the pool entirely paid for through fundraising.