Cortines Fires 6 Amid Fight Over Prop. BB Funds

Amid an intensifying struggle for control of the $2.4-billion Los Angeles school repair and construction project, interim Supt. Ramon C. Cortines on Friday fired six members of the management team hired to oversee the work, including the program manager.

As part of the deepening rift, the district’s top investigator recently launched an investigation into possible illegal activity in the management of the school repair and construction effort, which was launched by passage of Proposition BB in 1997.

The investigation was prompted by concerns that the management firm, 3D/I-O’Brien Kreitzberg, and 10 other firms that work under it as project managers have been charging too much for managing school repairs and new construction and have engaged in overstaffing. The investigator, Don Mullinax, has not named any particular firm as a potential target.

Cortines said Friday that his decision to have the six 3D/I-O’Brien Kreitzberg employees removed from the project was precipitated by a threat that program manager Rob Robinson allegedly made against district facilities chief Lynn Roberts. In a letter informing the firm of the firings, Cortines attached a memo in which a district official quoted Robinson as saying: “If Lynn does not watch out, I will nail her . . . to the cross.”

The alleged threat occurred on the same December day that Roberts said in a public meeting that she was not satisfied with 3D/I-O’Brien Kreitzberg and that its fees were too high.

Cortines said Roberts was attempting to reduce the firm’s staffing in pursuit of his directive to slash excessive administrative costs. “Any further reluctance to cooperate will result in complete cancellation of projects,” Cortines wrote.

The firm released a statement Friday saying it had not been informed of Cortines’ action, either by phone or in writing.

It said the firm “has provided efficient and cost-effective private sector program management services saving valuable tax dollars for the taxpayers of Los Angeles.”

Robinson and Alan Krusi, president of 3D/I-O’Brien Kreitzberg, were not available for comment Friday.

The controversy over management of the bond money could be a factor in the Los Angeles mayoral campaign. Steve Soboroff, Mayor Richard Riordan’s choice to succeed him, has used his position as head of the committee that oversees Proposition BB spending to give more responsibility to 3D/I-O’Brien Kreitzberg.

Soboroff reported this week that he had returned a $500 campaign contribution to his mayoral campaign from 3D/I-O’Brien Kreitzberg President Krusi.

Alarmed by reports that management fees are excessive, the school board last month authorized Mullinax, director of internal audits and special investigations, to conduct an in-depth examination of the $54 million the district has paid to 3D/I-O’Brien Kreitzberg and the 10 project managers.

“We are doing an investigation. We are not doing a financial statement audit,” Mullinax said. “The distinguishing factor between a financial statement audit and what we are doing is the possibility of improper and illegal activity.”

Management Costs Are Disputed

Mullinax refuses to discuss any details of the investigation. What is known is this: The inquiry was launched after the district projected in December that total management expenses would consume as much as 19.2% of the cost of repair and construction projects--nearly $1 of every $5 spent.

The bond measure that voters approved in 1997 was intended to repair dilapidated schools and build new ones. To assure voters that money would be well spent, the measure called for a citizens’ oversight committee to monitor the district.

The district hired 3D/I-O’Brien Kreitzberg to be the program manager and help it oversee about 12,000 repair and construction jobs. The district also hired 10 firms to provide on-site project management. So far, the district has spent $632 million and has 5,500 repair projects underway or completed, ranging from installation of air conditioning to sprinkler repair.

Roberts told The Times that there is “a real struggle over who is running the [Proposition BB] project. Is it the program manager or is it the district staff?”

In an interview at her high-rise office in downtown Los Angeles earlier this week, Roberts said relations between district officials and the program manager are strained because “there is no partnership here.”

The issue first broke into the open in December when the district’s new chief operating officer, Howard Miller, told the citizens oversight committee that a complete investigation was warranted because “our numbers show us there have been project management costs here that cannot be justified under any history of project management.”

That assertion was promptly challenged by Soboroff, who asserted the amount was far less. The two sides are working from different sets of figures.

Based on its figures, the oversight committee last month said the program management costs were 2.2% of total spending and project management costs were 12.1%. The committee said both are within acceptable industry standards, based on the needs and scope of work required by the district.

A revised report by the district’s staff projects the management fees to be 17.5%--3.2% for 3D/I-O’Brien Kreitzberg and a little more than 14.2% for the project managers.

Soboroff, who has been a longtime promoter of privatizing district construction, played a key role in building 3D/I-O’Brien Kreitzberg’s share of the bond work. In the first year of the project, Soboroff battled relentlessly against the efforts of senior district officials to monopolize the repair jobs. He argued that the private sector was far better equipped to manage the work.

Soboroff said late Friday that the success of the Proposition BB program so far has been a result of bringing “the private sector in and getting the old-time bureaucracy out.”

He expressed concern that the school district bureaucracy may be going back to its old ways of doing business, which could slow the amount of work being done at the schools.

Another member of the oversight committee, Michael Lehrer, said the fired people are crucial to the management team.

“If they succeed, chaos will have taken over and we can all give up, because there is no way on Earth that this program can be managed by anybody else,” Lehrer said.

During the Dec. 15 meeting, Robinson defended 3D/I-O’Brien Kreitzberg’s staffing. He said the district has “tightly controlled the process of which staff we hire.” But he acknowledged that the two sides did not concur on the need for separate coordinators in each geographic area of the district.

Robinson is alleged to have delivered the threat against Roberts to one of her subordinates during a telephone conversation the same day as that Dec. 15 meeting. Geoffrey Smith, an area facilities director, relayed the comment to Roberts in a memo the next day.

Roberts said she mentioned it to Cortines during a discussion Thursday on budget cutting. “We were talking about district staff,” Roberts said. “I mentioned we needed to work on the issues with the program manager as well. He was very upset about the threat that was made to me.”

Among those Cortines directed the firm to remove from the project was Michelle Delgadillo, wife of Los Angeles Deputy Mayor Rocky Delgadillo, who heads Mayor Richard Riordan’s business team. She was involved in public relations work for the project management firm.

In addition to Robinson and Delgadillo, Cortines ordered four coordinators pulled from the project and a fifth demoted from head of facilities design to landscape coordinator.

Roberts Acknowledges Need for Private Sector

In her interview, Roberts readily acknowledged that the private sector is essential to the massive school repair and construction effort. “We definitely need the outside project managers and the private sector expertise,” she said while adding that the cost, nonetheless, is too high.

Roberts raised a series of concerns about the management of the Proposition BB program and projects. She complained that 3D/I-O’Brien Kreitzberg is overstaffed. From five or six people, she said, its office has grown to 35. Roberts said she has repeatedly requested that Robinson reduce his staff.

She noted that a handful of the employees will sit in long district meetings driving up costs “when a lot of that money could be used to repair sprinklers.”

Robinson is the third 3D/I-O’Brien Kreitzberg program manager to be sacked in the firm’s 2 1/2 turbulent years on the job.

The initial program manager, Ruth Hobbs, was dismissed after clashing with Soboroff.

Her successor, Dennis Martinez, fell out of favor over mix-ups that brought the construction of several kindergarten-through-third-grade primary centers to a near halt.

Tension over management of the bond project further escalated in December when Miller announced a plan to involve the U.S. Army Corps of Engineers in new school construction, a move that would potentially take from 3D/I-O’Brien Kreitzberg some of the $900 million set aside for building new schools.

District insiders said at the time that Miller turned to the Army Corps because he was alarmed by political infighting and the potential for corruption in the school-building program.