Scottsdale Schools internal review claims district procurement process OK

Attorney Susan Segal reported her findings to the Scottsdale Unified School District Governing Board on Dec. 19. (photo by Melissa Fittro)

The Scottsdale Unified School District has little-to-no evidence of wrong doing in their procurement practices, attorney Susan Segal told district leaders on Tuesday, Dec. 19.

The noon Dec. 19 meeting at the Mohave District Annex, 8500 E. Jackrabbit Road, yielded top district officials and reporters to hear Ms. Segal’s judgment on the allegations that SUSD had unethical procurement processes.

Following a two hour executive session — the latest of many other private meetings held in the past week — the Scottsdale Unified School District Governing Board waved their rights to attorney-client privileges to allow Ms. Segal to present her findings of an internal investigation to the public.

Governing Board member Kim Hartmann was absent due to illness.

Ms. Segal, a partner at local law firm Gust Rosenfeld, was hired to perform an internal review into the district’s procurement practices after myriad allegations and questions surfaced in recent months.

Throughout the course of January 2016 until now, a series of events led to the community questioning the ethics of their district leaders. The straw that broke the camel’s back came in November when Scottsdale resident Loyd Eskildson wrote a guest commentary in the Scottsdale Independent unearthing documents showing hired professional Brian Robichaux had been convicted of theft, a class 2 felony in Arizona in 1998.

Mr. Robichaux, former-president of Phoenix-based Hunt & Caraway Architects, had been most-recently hired by the district to design elementary schools after the passing of a $229 million bond last November. Hunt & Caraway has been involved with other district projects including athletic field improvements at three high schools.

Mr. Robichaux is not a licensed architect, Ms. Segal says, although he represented himself as one at least twice in district settings.

Overall, Ms. Segal’s review found that two of the district’s Construction Manager at Risk procurements did not follow Arizona Procurement Code as it didn’t have a registered architect on the committee, because Mr. Robichaux wasn’t a registered architect; and evidence suggests Hunt & Caraway is over-charging Scottsdale Unified School District.

“I want to add that just because Mr. Robichaux, the president of the company, had a conviction does not necessarily invalidate the Hunt & Caraway contract. That’s for a later day for me to give you legal advice on that,” Ms. Segal noted at the end of her presentation.

The Arizona Attorney General’s office confirmed its involvement in an investigation looking into the business practices of the Scottsdale Unified School District, but cited its policy to not discuss ongoing investigations during a Nov. 29 phone interview with the Independent.

Ms. Segal’s findings are to be forwarded to the Arizona Attorney General’s Office, 1GPA and the Arizona Board of Technical Registration.

Ms. Segal says she was retained for two purposes — to investigate the district’s procurement of Hunt & Caraway, and the district’s procurement of financial consulting-firm PGPC and alleged conflicts of interest. She presented her findings on Hunt & Caraway during the Dec. 19 meeting.

Susan Segal

She expects to return to the Governing Board in January to discuss possible legal remedies or action, she said, describing today’s meeting as part one “of maybe three or four parts.” The findings on PGPC are expected in January as well.

Questions began to sprout within the Hopi Elementary School community earlier this fall when the school was set to begin a complete tear-down and rebuild.

At a September meeting, a room full of school parents and neighbors voiced their disapproval for the proposed school design and the process in which the rebuild was being handled.

Mr. Robichaux, then-Hunt & Caraway’s principal, had been leading the charge on Hopi’s redesign. Paperwork shows the firm was first hired by the district in April 2016 to work on a “facilities master plan” prior to the Scottsdale Unified School District Governing Board approving the bond ballot initiative.

District documents, Arizona Corporation Commission files and procurement records show that neither Hunt & Caraway nor Orcutt-Winslow went through a public SUSD procurement process, but rather were approved through a Phoenix-based national cooperative, 1 Government Procurement Alliance in 2016.

1 Government Procurement Alliance — also known as 1GPA — is a nonprofit national governmental purchasing cooperative that allows public agencies to take advantage of existing contracts to purchase the goods and services they need from local and national vendors, according to a Request for Qualifications document dated Jan. 14, 2016.

Records posted to 1GPA.org illustrate an architectural services RFQ for the state of Arizona, and SUSD was designated as the lead agency for the procurement.

A view of one of the many Scottsdale Unified School District school sites. (File photo)

Attorney findings

A district internal review was confirmed to the Independent on Nov. 30. Ms. Segal described the investigation as consisting of numerous public records obtained through the school district and through 1GPA.

She also explained that she interviewed 10 witnesses, had two discussions with David Hunt’s attorney and other Gust & Rosenfeld employees have discussed Hunt & Caraway with other school districts.

“I did not find any violations of the law in the procurement of the services of Hunt & Caraway through the cooperative purchasing nonprofit cooperation called 1GPA,” Ms. Segal summarized. “However, there are subsequent events that developed that are concerning with respect to amounts billed by Hunt & Caraway to the district for work done.”

Ms. Segal went on to list other concerns including:

  • The background and conduct of a principal of Hunt & Caraway;
  • The representation by Hunt & Caraway in the 2013 Request For Qualifications, “that no owner had been convicted of a felony”; and
  • The evaluation conducted to choose the construction manager at risk for the three sports fields projects and the Hohokam Elementary project.

“As to the selection process for the Construction Manager at Risk, the law was clearly violated as a result of the fact that Mr. Robichaux was not a registered architect, and there were no other registered architects on the selection committee.”

Ms. Segal says 1GPA complied with the procurement code that applies to Arizona school districts in procuring architect services in both 2013 and 2016.

SUSD purchased services through 1GPA in 2013 as well, she said.

“Next, there is no requirement in the procurement code that applies to school district that a company reveal felony convictions to a principal in response to a solicitation,” she said.

Ms. Segal explained that in 2013, 1GPA did ask on their RFQ whether any owner of the company had been convicted of a felony, and Hunt & Caraway said, “no.”

Tamara Caraway, who is now listed as president of Hunt & Caraway, effective Nov. 21, says she didn’t know of Mr. Robichaux’s criminal history until Oct. 31.

Mr. Robichaux says he did not tell his former employer or former associates, Ms. Segal says.

Additionally, the law does not require that a firm’s principal be a registered architect.

“But he can not represent that he is one. On at least two occasions, and I suspect more occasions, Mr. Robichaux represented he was an architect to persons related to the district,” Ms. Segal said.

“Ms. Caraway stated she did not know Mr. Robichaux was not a registered architect until after she bought into the company in December 2011.”

As for the plans for Hopi Elementary School designed by Hunt & Caraway, they are not void.

“Ms. Caraway’s seal as a registered architect appears on that plans that Hunt & Caraway has drawn for the district, so there’s no fault there,” she said.

Ms. Segal’s review also found that Hunt & Caraway has over-billed SUSD “a significant amount, although the exact amount is still to be determined.”

The 7 percent Hunt & Caraway is charging the district is higher than the fee schedule submitted in the 2016 RFQ, Ms. Segal says.

“When I discovered the fact that in the course of this investigation, and asked both Mr. Robichaux and Ms. Caraway about this, they insisted — and this was last week. Dec. 9 and before — that 7 percent was the right amount,” she said.

As recently as Dec. 11, Ms. Caraway sent the fee schedule to Superintendent Dr. Denise Birdwell, Ms. Segal said.

“However, they have now agreed — verbally agreed, Ms. Caraway through her attorney — to adjust its charges and bills to comport to terms of the 1GPA contract.”

Ms. Segal recommends an outside architect be hired to look at, and determine what the fees should be.

“As to who is responsible for over-billing, based upon the wrong fee schedule, I think it’s principally Hunt & Caraway, however past and present employees should have verified the correct percentage or hourly rate before paying or signing off on a (purchase order), or paying an invoice,” Ms. Segal said.

“The timing is important as you go through the records, you see many of these invoices were signed in 2016 and early 2017 by employees that are no longer here.”

“I do believe 1GPA as well as Hunt & Caraway bears responsibility for these problems. Hunt & Caraway had a duty of good-faith and fair dealing to the district. They should have been on top of, and billed the correct amount to the district,” Ms. Segal said.

Pre-bond election work by Mr. Robichaux was legal, as he was an available vendor the district through 1GPA’s 2013 procurement.

District response

The Scottsdale Unified School District Governing Board asked Ms. Segal to discuss her law background, her firm’s previous work with the district, and her experience with SUSD’s records department. Gust Rosenfeld also serves as bond counsel for SUSD.

Barbara Perleberg

“I commend this work that you’ve done, it’s incredibly impressive, and I also thank all of our staff that cooperated and worked well with you and gave us this much clearer picture. I appreciate that very much,” Governing Board President Barbara Perleberg said.

Following Ms. Segal’s presentation of her findings, the Governing Board voted 4-0 to approve the Guaranteed Maximum Price No. 2 for a Request for Qualifications for a Construction Manager at Risk for the new rebuild project at Hopi Elementary School — signaling the next step in the school’s rebuild process.

Dr. Birdwell did not take questions after the meeting, but the district issued a statement shortly afterwards.

“The management of tax dollars on behalf of children is a profound responsibility that the leadership of Scottsdale Unified School District does not take lightly,” the unsigned SUSD statement says.

“That is why, when questions surfaced regarding the procurement of architectural services for school rebuilds and renovations, SUSD General Counsel Michelle Marshall enlisted the help of attorney Susan Segal of Gust Rosenfeld to conduct an external review of our procurement processes. That review is now complete, and the findings confirm that SUSD followed all legal procurement procedures in the selection of architects for school construction and planning.”

The statement lists some of Ms. Segal’s findings, before stating members of SUSD did not know about Mr. Robichaux’s history.

“Regarding the criminal history of former HCA President Brian Robichaux: that history was not declared to 1GPA, his own business partner, the SUSD Governing Board, the superintendent or any other member of SUSD administration. Scottsdale Unified School District did not know about this 20-year-old conviction. As soon as it came to light, Mr. Robichaux stepped down from his position with HCA,” the statement reads.

The district is expected to issue the sale of their next bonds on Wednesday, Dec. 20. Ms. Segal says a statement regarding the district’s investigation has been disclosed in a supplement to the official bond statement for a week.

Northeast Valley News Services Editor Melissa Fittro can be e-mailed at mfittro@newszap.com or can be followed on Twitter at twitter.com/melissafittro.

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