A $572 million bond measure on the November ballot — the largest ever for Denver Public Schools — would fund a new elementary and middle school in northeast Denver, expand a high school and add air conditioning in several schools.
If approved by voters, nearly a quarter of that money would go to minority- and women-owned businesses as part of the district’s focus on diversifying its hiring for construction projects.
But some business owners are questioning the district’s past practices and commitment to supporting such contractors. One firm has filed a lawsuit in federal court and accuses the district of “economic racism.”
This is the district’s first bond proposal since it started a program last year to focus on diversifying its hiring. The district made changes in February 2015 after a third-party audit on its hiring diversity. That report, released in October 2014, found minorities and women were not well represented as prime contractors in DPS projects between 2009 and 2013. Minority- and women-owned business enterprises (M/WBE) firms got 24.2 percent of subcontractor dollars on construction projects but only 8.2 percent of prime contractor funds.
An update last month to the school board said the next major step is hiring a director to lead the program’s strategy and operations. Last week, DPS hired Murugan Palani, a graduate of DPS’s George Washington High School, as its new director of business diversity and outreach.
“We are deeply committed to have our minority contracting be an important part of our bond program,” said DPS superintendent Tom Boasberg.
Janelle Martinez’s family-owned NM Industrial Services has secured more DPS contracts since the program began.
“They gave us and other businesses several opportunities to achieve our goals and grow,” said Martinez, whose company performs mechanical improvements, remodeling and renovations.
But one minority firm says DPS has frozen them out of lucrative contracts because of their race and criticizing the district. Ronald and Michael Roybal claim in a lawsuit, filed in U.S. District Court this past summer, that DPS is awarding big construction contracts to white-owned businesses even though their Hispanic firm is just as qualified or even more so.
The Roybals say DPS is punishing them for speaking out against what they say is the district’s alleged preferential treatment of white owners.
“It’s economic racism,” said Ronald Roybal, who started the Roybal Corp. with his brother, Michael, in 1981. “The only kind of work we’ve been able to get from DPS are the remodeling of bathrooms, basically bottom of the barrel projects.”
This despite the firm’s work throughout the region, including a design for the $170 million concourse project at Denver International Airport.
The Roybals named DPS and the DPS Board of Education as defendants. Their lawsuit seeks compensation for economic losses as well as compensatory damages. No amount was given in their lawsuit.
The brothers insist the lawsuit was filed with other slighted firms in mind.
“We are not doing this for selfish reasons,” Ronald Roybal said. “There are a lot of minority- and women-owned firms out there who are doing good work but are being ignored by DPS.”
Ron Abo, president of Asian-owned The Abo Group, said DPS often passes over minority firms to give the biggest jobs to white-owned firms.
“We get the crappy jobs,” Ron Abo said. “I think there are some at DPS who believe minority firms aren’t qualified to do this work.”
Ronald Roybal says the district’s actions are especially galling since about 56 percent of the 91,000-student enrollment at DPS are Hispanic or Latino. White students comprise 22.6 percent of the DPS population, black students 13.8 percent and Asian students 3.3 percent.
“What does that say to the students of color who work hard and want to better themselves, but won’t even get a chance to succeed professionally in Denver?” Ronald Roybal said.
The Roybals contend that based on recent history, only about 1 percent of Hispanic- and African-American-owned businesses would get work from DPS’s proposed bond.
District officials deny the lawsuit’s allegations, saying that as part of its updated goals, the district has put in place a process to ensure more minority firms are brought in on projects.
“We categorically refute any allegations of any discriminatory practice or intent in this case,” Boasberg said. “We take very, very seriously the importance of diversity in our contracts. We serve a diverse city, and these are diverse tax dollars we are managing.”
The lawsuit alleges less than 2 percent of DPS contracts were awarded to minority-owned businesses from the 2008 bond.
According to the October 2014 report, the district said $4.2 million of its bond-financed projects from 2007 through 2010 went to minority- or women-owned businesses — about 1.3 percent.
The Roybals also slam the process for hiring minority firms for the $10 million renovation of Swansea Elementary School. The school is being rebuilt as a result of the proposed $1.2 billion expansion of nearby Interstate 70.
The Roybals said they and the Committee for City and Airport Fairness, which has monitored DPS’s progress in minority contracts, outlined a pilot program to highlight the capabilities of minority- and women-owned businesses. The pilot program targeted Swansea Elementary.
But after grading each firm’s bid for Swansea, DPS hired the white male-owned Adolfson & Peterson Construction for the construction and Anderson Mason Dale Architects for the design work. Those firms subcontracted enough work to minority- and women-owned firms to meet the hiring goals for Swansea, the Roybals said.
“The selection process for the Swansea (project) was fraught with problems and inconsistencies,” the Roybals contend.
Boasberg told the district’s stakeholders in a letter in August that Anderson Mason Dale has committed to meeting the 70 percent goal of the architecture work be performed by women- and minority-owned businesses. He wrote that “AMD has assured us that they will meet this goal, and we will hold them responsible for doing so.”
Boasberg also said DPS is making strides in its minority contracting, with 16 percent of the $466 million 2012 bond — about $52.4 million — going to minority- and women-owned businesses. Since expanding its minority contracting program, DPS is awarding 33 percent of its bond dollars to nonwhite male-owned firms, he told the school board.
The district now sets hiring goals for every project. That includes Swansea, where more than half the payments from the recently completed Phase 1 work at the school went to minority- and women-owned businesses, Boasberg said.
As for the Royals, “We have done business with them and we respect them, but in this case it’s not the best bid,” Boasberg said. “That was the reason they didn’t win.”
The district’s emphasis on getting minority- and women-owned businesses involved in bidding for contracts has worked out well for Southwest Mechanical Management Inc., a 25-person heating and air conditioning contractor headed by president Stacy Rubenking.
“We’ve had a lot of success working with DPS over last few years,” Rubenking said. “When the work really gets rolling for school projects, usually in the summer, we have to bring in more people. It’s been great for us, and DPS gets good companies working on their projects.
“It’s been good for everyone involved.”