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Officials: Suspended projects to stay on shelf if it can't spend more than $8.6B
Friday, May 26, 2006 • BY DUNSTAN McNICHOL • Star-Ledger Staff

More than a year after the state Schools Construction Corp. bought out and boarded up two thriving Newark neighborhoods to make way for schools it can no longer afford to build, the empty homes are scheduled for demolition this summer, state officials told lawmakers yesterday.

"This is another area where the agency did not do a good job in understanding the problem in the communities of stranded properties," Scott Weiner, transitional chief executive officer of the SCC, told a special hearing of the Legislature's Joint Committee on Public Schools. "It's taken too long, but it's being tended to now."

Weiner and Barry Zubrow, chairman of the corporation's board of trustees, acknowledged the school program had been beset by myriad management and coordination problems that crippled the state's sweeping $8.6 billion school construction initiative.

"Simply stated, the execution of much of the work by the SCC, going back a number of years, has been plagued by a lack of strategy, poor management and failure to put in place basic controls and reporting systems that would allow it to properly execute its responsibilities," said Zubrow, a former administrative specialist at Goldman Sachs.

The problems came to a head last summer when, after a series of scathing reports that detailed management shortfalls, cost overruns and potential conflicts of interest, SCC officials suspended work on all but 128 of the 540 school projects proposed for development under the program.

Until lawmakers give SCC the authority to raise and spend more than the $8.6 billion, Weiner said, those suspended school projects will remain on the shelf.

"It would be imprudent to manage the projects as if funding were unlimited," he said. "That is what got SCC into trouble in the past."

Of the original allocation, $6 billion was earmarked to meet a 1998 state Supreme Court order to rebuild hundreds of decrepit public schools in 31 of the state's neediest communities. The SCC has spent about $3.3 billion of that and produced 40 new school buildings, 37 substantial renovations or classroom additions and about 550 emergency repair projects like roof repairs, boiler replacements and new windows, Zubrow told lawmakers.

Finishing 128 projects still in the works will require the balance of the $6 billion and another $400 million, Weiner said.

A preliminary estimate in February suggested it would take another $5.4 billion to complete 97 suspended school projects that already have been designed, including the Ridge Street and Dewey Street projects, Weiner said. He said SCC officials plan to spend the summer refining the estimated amount needed to restart work on a portion of the projects that were suspended last summer.

But committee co-chairs Sen. Ron Rice (D-Essex) and Assemblyman Craig Stanley (D-Essex) said they want estimates sooner than that.

"Whatever the number is, it's our duty as legislators to fight for that money going forward," said Rice. "I want those numbers to the committee. In the next 10 days, give me some costs."

Republicans on the committee said they are reluctant to endorse any new spending on the construction program until efforts have been made to identify and prosecute anyone who has ripped off the program.

"There is no stomach in the general public to provide additional funding at this point," said Assemblywoman Jennifer Beck (R-Monmouth).

"We definitely need to fix this," said Assemblyman Bill Baroni (R-Mercer). "Because the school construction program has lost the confidence of the public."

Stanley, however, said the reforms Weiner and Zubrow have begun to implement have shored up the agency and put it in a position where it can manage additional school projects as soon as lawmakers approve more funding.

"That can't be used as an excuse not to fund what is necessary in the state of New Jersey," he said.

School agency admits past, looks to future

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