Last fall, a disagreement arose between officials at San Diego Unified and Southland Electric, one of the district’s contractors.
The district was being audited and had concerns about the pay rate of a Southland employee who worked on a job at Garfield High School.
Andy Berg, who works for Southland and dozens of other electrical contractors as the head of their association, wrote district staffer George Harris III on July 30, 2014: “George, Any idea why it would be a problem if the contractor overpaid an employee? Andy.”
Berg eventually looped in Lee Dulgeroff, San Diego Unified’s chief facilities planning and construction officer, and Harris’s boss.
“I have a worried contractor to answer to,” Berg wrote.
Over the next several weeks, more emails followed without resolution.
On Dec. 18, Berg wrote Dulgeroff with a threat: “If you cannot rectify this, my advice to Southland will be to ignore the request (you can’t pay more than double time) and sue the District instead.”
Two and a half hours later, Berg, as chair, convened a meeting of San Diego Unified’s Independent Citizens’ Oversight Committee, and discussed school bond projects with Dulgeroff, the district’s point man to the committee.
The committee is the state-mandated local watchdog of taxpayer dollars collected through voter-approved bond measures to pay for school facilities and improvements. The volunteer group is required to report their findings to the school board and public.
Berg lobbies public and private agencies for electrician jobs by day, and by night he chairs the bond oversight committee, a group tasked with ensuring the district’s $4.9 billion in bond dollars are spent as promised to voters without waste.
Berg has held these dual roles – advocating for contractors and taxpayers alike – for years, and not just at San Diego Unified. He’s also served on school bond oversight committees at Poway Unified, the Sweetwater Union High School District and the San Diego Community College District over the last decade.
Berg, who lives in Rancho Peñasquitos in the Poway Unified district boundaries, says his familiarity with construction makes him desirable to the school board members who appoint him. He’s also been a friend to elected officials and stumped for the very bond measures that become a boon for his members.
Not only do schools need the money but, “We build here,” Berg said, sitting in a conference room at the local headquarters of the National Electrical Contractors Association. “If it’s passed there’s going to be more construction in the general market and that can’t help but be good.”
He’s also defended districts when criticisms arise over technology purchases, in the case of San Diego Unified, or over steep bond repayment ratios, in the case of Poway Unified.
Prop. 39, passed in 2000, lowered the threshold required for school bonds to pass – from two-thirds to 55 percent of voters. As part of the measure, bonds that pass are required to have a citizens’ oversight committee as an extra safeguard.
“Follow the money,” as Berg puts it. “I’m chair of a committee that’s in charge of making sure money is spent as outlined in the bond.”
The fact that following San Diego Unified’s bond money leads you to the pockets of many of Berg’s electricians and his bosses, he says, is inconsequential.
Electricians Win Big Bond Bids
As chief executive of the San Diego chapter of the National Electrical Contractors Association, Berg earns $160,000 a year. Nearly all of the association’s $1.2 million in annual revenue comes from member dues from over 50 electrical firms, IRS tax forms show.
Berg’s 11 bosses on NECA’s board of directors are the heads of several local businesses that regularly work for the district and have obtained school contracts, sometimes without a competitive bidding process, district records show.
Tim Dudek, for instance, is both president of NECA San Diego and Saturn Electric Inc., a company that has obtained lucrative Prop. S and Prop. Z contracts in recent years as part of the district’s Integrated 21st Century Interactive Classroom initiative, a major focus of both bonds.
Records show Saturn initially won four competitive bond bids worth a combined $6.47 million to furnish and install wireless internet, audio-visual equipment, electronic whiteboards and student devices in hundreds of district classrooms. Those contracts, each with a one-year term, were then renewed without competition at least four times for another $4 million.
Southland Electric, similarly, won a $1.3 million i21 classroom bid in 2010 and then saw that contract renewed twice for another $2.6 million without competition. Southland won two more bond bids worth $2 million in 2013 for i21 classroom work. The company has also done at least 18 non-bond district jobs since 2008 on an emergency no-bid basis – often after power outages – to the tune of $800,000, records show.
The district pays electrical firms for other projects too – like theater lighting, hand dryers and air-conditioning units – through smaller purchase orders that do not require bids.
NECA member San Diego Stage & Lighting has been paid at least $220,000 that way for 19 jobs since November 2011. Another firm EMCOR Group, also known as Dynalectric Company, has been paid at least $73,000 for seven jobs in the last four years through no-bid purchase orders, just to name a few.
Still, most of the district’s electrical work is performed by subcontractors paid by general contractors, not the district, making the true amounts paid to NECA contractors elusive.
What is clear in district documents is NECA members Berg represents work for the district and its bond program on a regular basis. Those that don’t are vying for district work, frequenting bid walks and submitting proposals.
‘Two Hats But Only One at a Time’
Ask Berg about his work as both contractor booster and taxpayer watchdog and he offers two views. On one hand, he says he keeps the jobs separate, putting on different hats depending on the room he is in.
“When I sit at a Chamber meeting, it’s, ‘OK. What’s best for the business community?’ When I sit here, it’s, ‘What’s best for my contractors?’ When I’m on the oversight committee, it’s ‘What’s best for the district and the students?’” Berg said. “I try to just think of where I am and what I am supposed to do.”
Dulgeroff, San Diego Unified’s facilities planning and construction officer, said he’s observed the same. Dulgeroff also served alongside Berg on Poway’s bond oversight committees for several years.
“Andy wears two hats but only one at a time. I have not seen him try to leverage his ICOC membership to benefit NECA electrical contractors,” Dulgeroff said. “If he tried I would not tolerate it.”
Berg also said there’s no inherent conflict between the two jobs because what’s good for the district is good for the contractor, and vice-versa. Serendipity.
“We need to advocate what’s best for society,” he said. “If it’s good, it’s good and we’ll make it work. I firmly believe that.”
“I’ve never really felt like, ‘Oh my God I can’t advocate for the taxpayer because this could hurt my (contractor).’ I’ve never felt that way,” Berg said. “If anything, I would be helping my contractors by helping the district do things as cost-effectively as possible.”
But Berg does routinely engage the district on behalf of his electricians, especially when they are at odds with the district or aren’t getting paid, emails from the school district show.
When Phazer Electric officials complained to Berg last July they weren’t getting paid by general contractor Adams Mallory Construction for work at Cesar Chavez, Rosa Parks and Jefferson elementary schools, Berg forwarded the concerns to Dulgeroff and Harris four minutes later with a message.
“Is there any legitimate reason that Adams Mallory would be holding money from Phazer Electric for the contract listed below? If not, is it possible for you to intervene before there is a need to file a stop notice?” Berg wrote July 21.
More recently, Aug. 24, Berg forwarded concerns from Southland Electric regarding payments withheld by the district for air-conditioning work.
“Lee, On the HVAC IDIQ’s are you releasing retention for each school or are you forcing the contractor to wait until the entire region is complete?” Berg wrote.
“Like many contractors we encounter, Andy can be assertive when advocating for the interests of contractors,” Dulgeroff said of Berg’s lawsuit threat last year. “District Facilities staff protects the public interest while treating our vendors, contractors and subcontractors fairly. Occasional disputes, claims and lawsuits with contractors are evidence that district staff is looking out for public interests and holding contractors accountable.”
Berg said his warning was more about his bond oversight role than his NECA one.
“The issue being addressed in the e-mails were of more importance to my role on the ICOC than they were to my day job. The district had a serious problem with their labor compliance department, so serious that many contractors (mostly non-NECA contractors) were threatening to stop bidding,” Berg said. “The ICOC certainly has a responsibility to make sure the district is not discouraging contractors from bidding work because this would have the effect of driving up costs. My role as chair is to be as forceful as I need to be when the district needs to understand that actions they are taking are negatively affecting the bond program.”
Michael Turnipseed, president of the California League of Bond Oversight Committees and executive director of the Kern County Taxpayers Association, said the exchange in which Berg threatens to advise a contractor to sue the district shows “He’s bringing his day job into the arena.”
“If he is sending emails like that, he should step down, in my humble opinion, because you are going way beyond your scope as a bond oversight committee member,” Turnipseed said. “There’s asking the question and there’s getting involved.”
“You need to have people that don’t have a perceived or vested interest in the outcome of their deliberations,” said Nick Marinovich, a League of Bond Oversight Committees board member and chair of the Sweetwater Union High School District bond oversight committee. “They need to be independent of any outside influences that could cloud their judgement. … The master is the taxpayers on these committees. That’s who the boss is.”
Districts Seem Fine With the Arrangement
California law forbids employees as well as “A vendor, contractor, or consultant of the school district” from serving on a bond oversight committee.
Berg said he’s been verbally advised by each government agency he’s served that he doesn’t have a conflict since neither he nor NECA receive district compensation. Only the NECA members he serves do.
But after we inquired, only Sweetwater’s Prop. O oversight committee minutes from 2007 reflect such advice, although Poway Unified officials this month offered the same perspective.
Minutes from Berg’s first meeting at the San Diego Community College District in 2007 do not reflect such advice. The college’s Prop. S and N committee ethics policy bars members from making or influencing district decisions related to “any construction project which will benefit the committee member’s outside employment, business or a personal financial interest.”
“We don’t see a conflict of interest,” said Jack Beresford, a spokesman for the district, after reviewing Berg’s resume this month. College oversight committee “members are advisory in nature and don’t make decisions.”
San Diego Unified’s records from Berg’s first committee meeting Feb. 24, 2011, also make no mention of such a request, and district officials did not respond to questions about whether such a determination had been made.
For a couple years, a NECA training center Berg helps oversee was also receiving district funds.
San Diego Unified contracted with the San Diego Electrical Training Center for two years – $75,000 a year – to provide a Renewable Energy Leadership Institute that 20 students attended. The center is jointly run by NECA and the local electrical workers union through a trust overseen by an eight-person board of trustees that includes Berg.
The student program was eliminated during a round of budget cuts before the 2011-12 school year to save $130,000.
“The $75,000 barely covered expenses,” Berg said. “It was a great program for the students and I wish it was still in effect.”
San Diego district officials did not respond to a question about whether the contract should have disqualified Berg from the oversight committee at the time.
San Diego Unified’s bond program has not been without its controversy during Berg’s tenure.
One of the oversight committee’s primary tasks is making sure bond dollars are spent only on projects listed in the ballot provided to voters. San Diego Unified got a rude awakening in March 2013 when a court ruled that field lights were not permissible Prop. S expenses. The court also determined, however, that schools didn’t have to pay back the money that had been improperly spent.
District consultant Larry Goshorn wondered earlier this year if, given the ruling, the oversight committee can still report bond funds were properly expended.
Berg replied: “I don’t necessarily disagree, but if the court is not demanding the repayment of funds, then was the money spent inappropriately? If it was, wouldn’t the court have ordered the money repaid?”
Close Ties With Contractors
While oversight committee members typically do not have district decision-making power, Berg was asked to help score the construction management firms vying for a $12 million contract to oversee the Prop. S bond program in 2011.
The winning partnership between San Diego-based Gafcon Inc. and Sacramento-based Vanir Construction Management dissolved four months later. Gafcon CEO Yehudi Gaffen had served on an unsuccessful San Diego parcel tax campaign committee with Berg in 2010.
Berg’s familiarity with local contractors who work with or hire his electricians is both a “Plus and a minus,” Berg said. He recalls telling district officials, “‘You know, I know all these people very well. I mean the (six finalist) individuals that are presenting the whole routine. Is that a problem?’ And the answer that I got was quite the opposite. ‘We like the fact that you have some intimate knowledge about the companies,’” district staff said.
On other oversight committees, Berg has sat in on contractor selection interviews, including 20 architect interviews at the college in 2007, according to meeting minutes.
Not everyone is as comfortable with Berg’s dual roles as Berg and local government officials.
Ron Noble, a San Diego resident who’s been at odds with San Diego Unified over Clairemont High’s field lights and noise, likened Berg’s committee role to “the fox watching the henhouse.”
“This thing is so incestuous it’s not funny,” Noble said. “It’s coming out of my taxes… How can someone legitimately be in there playing both sides of the fence?”
I asked Turnipseed, the California League of Bond Oversight Committees president, whether it’s normal for a contractor association representative to serve on a bond oversight committee.
“We have never had that … not up here,” he said. “But the air and water are different in San Diego.”