School
agency reformers discuss goals,
problems
Current projects running over
budget, and all 'suburban' money is gone
Thursday, February 09, 2006 • BY DUNSTAN McNICHOL
• Star-Ledger Staff
The new board charged with overhauling or
dismantling New Jersey's troubled Schools Construction Corp.
convened yesterday and promised to root out waste,
corruption and inefficiency at the agency accused of
mismanaging an $8.6billion public school building
program.
At the same time, the fallout from
lingering problems continued. Board members learned
yesterday that construction costs for 69 ongoing projects
are running over estimates, that the program has used up all
$2.6billion allotted for subsidies to suburban school
districts and that it launched only $400million in building
projects last year, far short of the $1.2billion projected
at the start of the year.
"We need to focus the SCC on being a
highly effective and efficient construction management
company," said Barry Zubrow, a former Goldman Sachs &
Co. executive installed by Gov. Jon Corzine as SCC chairman
Tuesday. "We need state-of-the-art financial controls and
accountability systems."
Zubrow said SCC employees were sent new
ethics guidelines yesterday and that the Attorney General's
Office is looking into possible wrongdoing by SCC workers or
overbilling by contracting firms that have collected
hundreds of millions of dollars from the program.
"We look forward to joining with the
attorney general and her staff as we vigorously pursue
this," he said.
Zubrow's installation marks the second
wave of reform at the schools corporation, which was formed
about three years ago to rebuild hundreds of decrepit public
schools in 31 of New Jersey's neediest communities under
terms of the state Supreme Court's Abbott vs. Burke
ruling.
The SCC was given $6 billion for that
task, and also oversees distribution of $2.6billion in state
subsidies to wealthier, so-called "non-Abbott" school
districts.
Yesterday, in a wide-ranging status
report to the new board members and Cabinet officers who
attended the SCC's regular meeting, acting chief executive
officer Peter Maricondo said the funds for the suburban
communities have all been committed.
"The remaining $40 to $50million has been
allotted to 180 projects in 90 non-Abbott districts," he
said. That means, he said, there is no grant money for
school districts that approved construction projects in
September, December and January.
Since last summer, when the state
announced that funds for the suburban districts were
dwindling, voters in 33 communities have approved school
projects that would have qualified for a total of
$163million in state aid. District officials were told that
if the state aid ran out, they would have to cover the full
costs of their projects with borrowed funds, then get
reimbursement for a portion of their loan payments over the
next 20 years.
Local officials have been waiting, in
some cases for months, to hear whether state subsidies would
be forthcoming, said Lynne Strickland, who lobbies for many
of the suburban districts as executive director of the
Garden State Coalition of Schools.
"Districts have been hung up,
back-burnered," she said. "The credibility of the state is
no longer suspect -- it has been found lacking."
As for the Abbott districts, the SCC last
summer earmarked what was left of its $6billion fund for 59
projects. But Maricondo reported yesterday there might not
be enough money for all of them because 69 school projects
already under way are coming in over budget.
Maricondo also told board members that
another 310 school projects are in line for state funding if
lawmakers decide to provide new money. The Supreme Court has
given the state until Feb. 15 to produce a list of those
projects and the funding needed to build them.
The SCC has been in turmoil for about a
year, since officials first revealed they were running low
on the funds authorized by lawmakers in 2000.
A Star-Ledger analysis revealed that the
first six schools built by the SCC cost, on average, 45
percent more than 19 schools built without the agency's
involvement at the same time.
In response to that report and to the
findings of a critical review by the inspector general,
former Gov. Richard Codey retooled the agency and suspended
the award of new contracts.
As a result, written updates distributed
at yesterday's SCC meeting show, the program's output
plummeted. The corporation awarded 73 construction contracts
worth a total of $400million last year, compared to
$1.2billion projected at the start of the year.
The 2005 output was the lowest since
2002, the year the agency was formed, SCC records
show.
Dunstan McNichol covers state government issues. He may
be reached at dmcnichol@starledger.com or (609) 989-0341.
© 2006 The Star-Ledger. Used by NJ.com with
permission.
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