School Board Erupts When Questioned About MacMenamin’s Deal

Last night at the school board meeting I pointed out a line item in the school budget — $40,000 for culinary arts program — and attempted to confirm that this line item referred to the MacMenamin’s Grill deal we have written about in the past.

I wished to ask the board whether spending $40,000 next year, for a total of $175,000 since 2006 on gourmet cooking classes for students at MacMenamin’s Grill was the most cost efficient way to offer such a program as taxpayers already fund BOCES which offers vocational training in the culinary arts.

Having attended all but two board meetings since last spring, I can report that no single question ever generated such heated responses and from so many board members and district employees as this question. The only thing that came close was the Board meeting last November when Superintendent Richard Organisciak asked the board for a “resolution of support” for MacMenamin’s Grill which raises the obvious question — what is it about MacMenamin’s Grill that gets the Board so agitated?

Rather than address the question, however, board members engaged in the lowest form of rhetoric, twisting a question about their spending into an attack on severely disabled students so they could demagogue the issue. I was interrupted repeatedly as one board member after another “defended” the deserving, severely disabled students that I was supposedly seeking to deprive of a quality educational experience. Of course, I did no such thing as the video tape of the meeting will clearly show.

So, is there any reason to question what is going on with this program? Am I really out of line with my question? As we shall see, Talk of the Sound was not the first to raise questions about the relationship between the New Rochelle School District and MacMenamim’s Grill and, from what we read in the newspaper, we will not be the last.

In June 2008, the New York State Comptroller issued a report on the Internal Controls Over Selected Financial Activities for the City School District of New Rochelle for the period July 1, 2006 to September 26, 2007. The report criticized the district for many reasons related to not having proper financial controls in place including inadequate policies related to procurement and specifically cited the purchase of services from MacMenamin’s Grill.

Audit Results

District officials need to improve oversight of District financial operations. We identified deficiencies in the internal controls over procurement, claims processing, and the segregation of the Treasurer and purchasing agent functions.

The District does not have adequate written policies and procedures related to procurement. The procurement policies and procedures do not contain sufficient guidance on the procurement of professional services, sole source purchases and emergency purchases. As a result, District officials paid $508,883 for professional service contracts for legal services and culinary classes, and $28,748 for sole source learning materials without soliciting competitive proposals or quotations. District officials designated the sole source purchase based on a notarized statement from the vendor without checking for the availability of other vendors. District officials also paid claims totaling $14,216 designated as emergency purchases without any documentation describing the nature of the emergency or other indication of an emergency on file. As a result, District officials are not assured that District funds have been used in the most prudent manner.

The auditor report expressed concern that “the District’s purchasing policy does not require obtaining RFPs or other competition when procuring professional services” and noted that “the procurement of professional services is left to the sole discretion of the Superintendent or his/her designee, with the approval of the Board.” The state auditors looked at four of the six professional service providers who were paid about $1.26 million during our audit.

While contracts for architectural and engineering services totaling over $758,000 were awarded through RFPs, District officials did not solicit competitive proposals for two professional service contracts, totaling over $508,000, for the District’s legal counsel and culinary classes for special education students.

The District’s attorney was paid over $460,000 during our audit period and has served as the District’s legal counsel for more than 15 years without the benefit of competitive proposals. The payment was based on an agreement prepared by the attorney. District officials explained that they valued the attorney’s unique knowledge of the District’s legal issues which have been gained over his long association with the District.

Similarly, the payment of $48,000 for culinary classes for special education students was based on a contract approved by Board resolution. District officials claimed that the culinary class instruction was uniquely suited to the needs of the District’s special education students.

By not establishing policies and procedures that require or encourage obtaining multiple proposals or quotations when competitive bidding is not required and by awarding professional service contracts without the benefit of RFPs or quotations, District officials cannot assure District taxpayers that they are procuring the most economically beneficial and qualified service providers.

Prior to the final report, the District was afforded an opportunity to provide a response to this audit in which the District defended its deal with MacMenamin’s Grill.

Professional Services

Finding Summary:

Competitive bidding is not required for the procurement of professional services which involve specialized school, training and expertise; use of professional judgement or discretion; and or a high degree of creativity. However, using a Request for Proposal (RFP) is an effective way to ensure that the District receives the desired services for the best price. While contracts for architectural and engineering fees totaling over $758,000 were awarded through RFP’s, the services of the Board’s legal counsel and specialized education classes for special education services were not. During our audit period, the expenses for these were $460,000 and $48,000 respectively.

District Response:

The vendor selected for the Special Education Culinary Arts Training is the only local vendor certified by the Westchester Workforce Initiative for the training of students with disabilities in culinary arts and restaurant vocations. In addition, the State Education Department–VESED has approved this partnership in their authorization for funding of the District’s model transition program. Copies of this supporting documentation should have been included with the Purchase Order for 2006-2007.

Of course, none of this actually addresses the issue and leaves open many questions such as what is a “local vendor” and whether BOCES offer a similar program certified by the “Westchester Workforce Initiative”. More to the point, however, is the response of the Controller in the final audit document:

APPENDIX B

OSC COMMENTS ON THE DISTRICT’S RESPONSE

Note 1

While the Special Education Culinary Arts Training may be the only local vendor certified by the Westchester Workforce Initiative and approved by the State Education Department, District officials did not provide any documentation supporting the fact that other vendors would not be eligible to provide this service. (emphasis added)

The audit notes that the District is required to file a corrective action plan in response to the audit:

The Board has the responsibility to initiate corrective action. Pursuant to Section 35 of the General Municipal Law, Section 2116-a (3)(c) of the Education Law and Section 170.12 of the Regulations of the Commissioner of Education, the Board must approve a corrective action plan that addresses the findings in this report, forward the plan to our office within 90 days, forward a copy of the plan to the Commissioner of Education and make the plan available for public review in the District Clerk’s office.

The City School District of New Rochelle Corrective Action Plan was approved by the Board on June 24, 2008. In it you will find no mention of the culinary arts program or any reference to documentation supporting the fact that other vendors would not be eligible to provide this service.

Talk of the Sound did not begin to look into this relationship until November when New Rochelle Superintendent Richard Organisciak used about 10 minutes at a School Board meeting to take the unprecedented step of seeking a “resolution of support” for MacMenamin’s from the School Board. After the Board balked at this request, Organisciak turned to the audience, almost exclusively people who work for him and exhorted them to patronize the restaurant.

Back then we wrote:

It was not clear what exactly Superintendent Organisciak was proposing the board do about MacMenamin’s Grill or why it is a matter of public concern that MacMenamin’s Grill stay in business. The proposal did, however, generate something rarely seen at board meetings – actual discussion of an agenda item. In fact, board members spent more time discussing the proposed MacMenamin’s Grill “resolution of support” then was spent discussing the previous agenda item – the budgetary impact of the financial crisis and the proposed cuts in New York State funding to the City School District of New Rochelle.

The following day we filed two Freedom of Information Law (FOIL) Requests:

Ms. Saraiva,

This is a public records request.

Last night Superintendent Richard Organisciak asked the school board for a resolution supporting MacMenamin’s Grill.

It is my understanding that MacMenamin’s Grill has enrolled students from the New Rochelle public school in their cooking school program. I would like copies of all invoices from MacMenamin’s Grill, the cooking school at MacMenamin’s Grill or any related corporate entities and copies of all checks or payments made to same.

As usual, I want all documents that are available in electronic form provided to me in electronic form. In this case, I understand that some or all these documents may only exist in paper form and that there may be photocopying charges. I am willing to pay and am willing to come to you office to get them. By law, an offer to pay is sufficient for you to proceed to gather and copy the documents.

Thank you

Robert Cox

and

Ms. Saravia,

This is a public records request.

Last night at the board meeting Mr. Organisciak asked the board to approve a resolution of support for MacMenamin’s Grill. It was not clear from his statements to the board whether he had already drafted such a resolution. If such document exists I want an electronic version of this document.

Robert Cox

Assistant Superintendent John Quinn responded to my request for a copy of the resolution of support for MacMenamin’s Grill proposed by Mr. Organisciak.

Mr Cox
this document does not exist.
any questions let me know.
thanks
john Quinn

So why did Organisciak put MacMenamin’s Grill on the agenda and what exactly was he proposing that the School Board vote on in order to accede to his request that the Board vote a “resolution of support for the restaurant? The world may never know.

Mr. Quinn did provide copies of Invoices from MacMenamin’s Grill and Paid Checks.

The checks and invoices show that during the 2006-2007 school year, the District was spending $6,000 a month and that in 2007-2008 that figure rose to $7,500 a month. There is no indication on any of the invoices as what precisely these payments are for beyond “cooking class” or similar. No mention of how many classes, how many hours, how many students, etc. So, what is the money for and where did it go?

The only information we have to go on at this point is the pricing for individual classes from the MacMennamin’s Grill site:

Fees:

ADULT CLASSES: $85 per person, plus tax (7:00 PM – 10:00 PM)
KIDS CLASSES: $45 per person, plus tax (11:00 AM – 1:00 PM)
TEEN CLASSES: $55 per person, plus tax (11:00 AM – 2:00 PM)
WINE DINNERS: $85 per person, plus tax & service charge (7:30 – 10:30 PM)

Advance registration and payment required. Tuition is Non-refundable. Gift Certificates are available.

As these students would be teens let’s start with that price. On the invoices that there is no tax so each teen class goes for $55 for a three hour class or $18.33 an hour. The most recent “contract” is $75,000 a school year at $7,500 per month for 10 months. At the “retail” rate, that comes out to be 4,091 hours. It would seem reasonable that the District would be eligible for a group discount and some sort of wholesale pricing — maybe the “KIDS PRICE” of $45 for three hours –so that the cost per hour to the District is a fraction of the $18.33 per hour. $45 per class for a three hour class is $15.00 an hour or 5,000 hours. So, a fair guesstimate is that the district is buying around 4,500 hours per school year from MacMenamim’s Grill. That strikes me as a lot of hours.

4,500 hours a year is 450 hours a month. If the classes are 3 hours a piece that is 150 days of classes per month. If the class is held every day and there are, on average 18 school days per month that comes out to 8.3 students taking a full three hour course every day of the year. All of which begs a few questions: how many students are there, how many hours are each class, how many days a week do students attend class because if they are not attending every day or only attending for an hour or two each day the numbers get very different, very fast.

Given the School Board’s vitriolic reaction to my question last night it would be good for the reader to note that it was the New York State Comptroller’s Office not Talk of the Sound that first began to raise questions about the relationship between MacMenamin’s Grill and the School District. When confronted about it by the State Comptroller, the District referenced documentary support that the Comptroller noted was not actually provided. A few months later, you get the Superintendent taking the unprecedented step of using 10-15 minutes at a school board meeting to argue that the Board should vote a “resolution of support” for a local business and exhorting his employees to patronize the restaurant. As we noted previously, there are also family connections between a now-former investor in MacMenamin’s Grill and a senior administrator in the District. Last week we learned that a Federal Bankruptcy Judge has appointed an overseer from the Office of the United States Trustee – Eastern Division of New York (Brooklyn Division) to run the former MacMenamin’s Grill (now Don Coqui) following allegations that “management bounced 50 checks, set up a bank account it did not disclose to a bankruptcy court and failed to file required financial statements.” The effect of that is already evident as there is now a message on the MacMenamin’s Grill web site indicating that the site has been taken offline due to billing issues.

Instead of seeking to demagogue the issue as they did last night, perhaps the Board could calm down and start with a simple explanation of how many students were enrolled in this program, how many classes they attended during the school year, the number of hours per class and otherwise account for the $175,000 in no-bid contract spending — actual and budgeted.

They might also address the point raised by the Comptroller in the most recent audit about providing documentation to support their claims as to why the District had no alternative but to pay MacMenamin’s Grill for their culinary program.