Schools Superintendent Dr. Brian Osborne and New Rochelle Board of Education President Lianne Merchant

Should Voters Trust New Rochelle School Officials with $50,000,000?

Written By: Robert Cox

There is no disputing that the New Rochelle schools are in a state of disrepair. What is in dispute is how they got that way and what the says about the upcoming $50 million bond referendum scheduled for a public vote on December 15th.

If New Rochelle residents are to believe Schools Superintendent Dr. Brian Osborne, the dangerous condition of the buildings is the result of “decades of deferred maintenance”. If they are to believe the District’s capital construction consultant, Mike Orifici, the problem is not “deferred maintenance” but rather routine aging of buildings. Clearly, it cannot be both. In fact, it is neither.

The condition of the buildings has been, since 1986, the responsibility of Aramark/ServiceMaster, a multi-billion dollar services company based in Philadelphia, PA.

By the district’s own investigations, capital construction projects in the New Rochelle schools have been rife with waste, fraud and abuse. One vendor forked over $50,000 when confronted with just four fraudulent invoices. District employees working under Aramark have, for years, engaged in all manner of fraud and theft to line their pockets at taxpayer expense. Inexplicably, despite well-documented failure and fraud, Aramark continues to have a $3.5 million contract to manage school facilities in New Rochelle.

In early 2014, then-Interim Superintendent Dr. Jeffrey Korostoff hired outside experts to identify fraud and theft. One audit of just 6 projects managed by Aramark found fraud in all 6 projects — $300,000 in invoices that should never have been paid by the business office. Where were the purchasing agents, lawyers, internal and outside auditors?

Rather than investigate further, turn the results over to law enforcement and file lawsuits against corrupt vendors, Dr. Osborne, with the approval of the school board, buried the investigation reports. Last month, Dr. Osborne filed a false statement with New York Statement claiming that a report prepared by Mr. Orifici did not exist. A report that shows Osborne was warned about the dangerous conditions at Webster School more than a year before the building was shuttered by New York State after a devastating ceiling collapse that might well have killed dozens of students and staff. Filing a false written instrument with a stage agency is a Class A, Misdemeanor punishable by up to a year in prison.

The question then becomes this: why should New Rochelle taxpayers, voters, parents trust that the district will spend the $50 million they now seek more wisely then they have spent the hundreds of millions that they have already wasted?

If past is prologue, only a fraction of that money will be used to repair buildings.

Ten million dollars, right off the top, is designated for “soft costs” which is code for lucrative fees to bankers, lawyers and consultants who have lined up at the district trough – a fact not even mentioned in the District’s legally required “bond newsletter” sent to voters earlier this week.

The District’s own investigation into waste, fraud and abuse noted the District’s past practice of paying 200-300% above the market rate for work performed in the schools, paying more than once for the same work and paying work for either not done or done poorly.

The District’s past practice, as recounted by long-time school board member David Lacher, of illegally siphoning off funds from past capital bonds to creating slush funds so that money could be redirected into the operating budget to mask tax increases and, in this instance, skirt the tax levy cap

It’s doubtful that even 25 cents on the dollar will actually go into building repair.

The problem is simple. New Rochelle Schools have the same derelict school board that has failed for years in their oversight responsibilities. Not a single person in the business office has been fired or reassigned — in fact, at least one key player was given a raise and promotion. The district has the same law firm, the same accounting firm and, of course, Aramark remains.

The only change has been Osborne, who appears to have committed a criminal act to cover up his game of “Russian roulette” with the lives of children at Webster School, and Jeff White, who by all accounts is a well-intentioned, well-qualified individual but whose progress in reforms has been glacial at best.

The district has deliberately conflated the work proposed for the bond vote and work needed at Webster School with the intent of misleading voters into believing that if the bond vote fails Webster will not be fixed. This is false. The work at Webster School is currently underway, funded out of the operating budget, and that work has nothing to do with the bond vote. The District’s engineer told residents in Rockland County (he also works for the Clarkstown School District) that the reason New Rochelle was planning to perform repairs in the Summer of 2016 is because most of that work was at Webster and was just an extension of the existing emergency repairs at Webster. In fact, the design work for that project was begun in October, two months before the bond is even scheduled. That work will happen regardless of the bond vote and the funds for that work have already been allocated. The balance of the work can be funded out of the operating budget. So, again the work planned for 2016 has nothing to do with the bond.

With typical chutpah, the district seeks to use its own negligence in allowing the ceiling collapse at Webster to claim that oppositon to the bond places staff and students in unsafe schools. First, if this were true why didn’t the District propose a bond during the 2014-15 school year as was recommended to Dr. Osborne by his entire team. Even now almost the entirety of the proposed work does not begin for more than 18 months so does that mean the District is placing students in unsafe schools until 2017? Of course not — it is utter nonsense. There were imminent threats to health and safety in the schools as identified in a report prepared by Mike Orifici at the direction of then-Interim Superintendent Dr. Jeffrey Korostoff in May 2014 — the report that Dr. Osborne now claims does not exist. Among those items were a failing wall at Webster School, loose masonry at Davis School and the roof at Webster School. Most of those repairs were made in 2014 with the notable exception of the Webster roof with the result that the water damage was identified the District engineer as the “major contributing factor” to the collapse. GIven that 94% of the work proposed under the bond does not  begin until 2017 and will not be completed until 2019 making this argument is akin to the District claim they are willing to accept unsafe schools for 2-4 years. Again, nonsense. Finally, according to their work plan, the design work and building permit approvals for all that work will not even be requested until September 2016.

All of this means that voters can safely reject the bond referendum on December 15th as a way to demand real accountability and transparency with the knowledge that another bond referendum can be put before the voters on May 17, 2016 with absolutely no impact on the scheduled work. Putting a second bond referendum in May costs nothing as the District is already hold school board and budget votes.

If the District will make the following changes — or at least substantial progress towards them — voters can then fully support the bond with the knowledge that reforms have been made.

Those reforms are as follows:

1. Osborne must turn over the report prepared by Mike Orifici in Spring 2014 which evaluated the condition of the school buildings and identified serious health and safety problems which Osborne ignored.

2. Osborne must tell the public what reason he gave for rejecting the recommendations to bond during the 2014-15 school year to address the health and safety issues found in every school building.

2. Fire Aramark and recruit a facilities management team that works directly for the district as was done in Mount Vernon.

3. Fire or reassign every single person in the business office so that no one who had any role in processing, approving and paying fraudulent invoices is allowed near that process again.

4. Hire an attorney directly to serve as Corporation Counsel the same as the City of New Rochelle.

5. Turn over all investigative files on waste, fraud and abuse to the U.S. Department of Justice.

6. Audit all capital construction invoices for the past decade and commence litigation against every person or vendor identified as having defrauded the district to recover that money.

7. Significantly reduce the “soft costs” and eliminate the “slush funds” in the current bond proposal.

With these changes made or, at least, well underway, the board can submit a slimmed down bond proposal to voters at the next school budget vote on May 17, 2016, confident in having the full support of residents. Without these changes, there is no reason to trust the same people who brought you the current mess with tens of millions more in taxpayer money.

Reforms First, Funds Second

If you have questions about the bond or wish to discuss the case for a “no” vote on the bond, please contact Robert Cox at 914-325-4616 or send an email to [email protected] When I get a new question that I am able to answer I will – and post the question and answer below to share that information with the public.

 

Frequent Asked Questions:

Q. Won’t voting down the bond put the lives of our kids in danger? (12/3/15)

Almost the entire amount of the bond (94% of the $50mm) will be spent on work starting after July 1, 2017 and will not be completed until August 31, 2019. The design work for those projects is not scheduled to be submitted to the New York State Education Department for approval until September 2016. So, voting “no” in December 2015 and voting “yes” in May 2016 (after reforms are substantially made) has no impact whatsoever on that work. Of the remaining 6% planned for Summer 2016, the bulk of that money is for work at Webster School which is already underway and will be completed regardless of the bond, as Assistant Superintendant for Business Administration Jeff White admitted at the recent bond hearing. That leaves less than $2 mm in work. So let’s consider that small bit that is left. The design work for that $2 mm was already begun this past October. The designs will be submitted to SED on April 1 and are expected to be approved by May 1 at which point the work can be bid out so it can start on July 1. If the proposed bond is voted down in December but an alternative bond is passed on May 17, 2016 the work can be be out out for bid on May 18th. A delay of 18 days is not going to make a bit of difference on bidding out $2 million worth of projects set to begin in July.

Q. But if you support passing a bond in May 2016, why not just support passing the bond in December 2015? (12/3/15)

It’s called “leverage”. Voters have a rare opportunity to hold the district accountable and demand meaningful reforms. Once the district gets their $50 million bond they have no motivation to enact reforms. Voting against the bond now gives the District 5 months to enact reforms — either completely or substantially. To take one example, producing the Orifici report from the Spring of 2014 is a simple act that can be accomplished in one day. To take another example, the Aramark contract has a clause in it that allows the District to opt-out of the contract at the end of the next fiscal year. That means the District can take the action of terminating the Aramark contract in February and would get “credit” in May for having substantially completed that reform even though it will not be completed until July 1st, after the last day of the fiscal year.

Q. Why spend $20,000 to hold a vote in December 2015 and then have another vote in May 2016? (12/3/15)

The cost of holding a bond referendum in May 2016 costs nothing because the school election is already taking place regardless. Adding one more choice on the ballot is essentially “free”. Whether there is one vote or two, the cost is the same.

Q. Webster had a ceiling collapse and the entire school community was relocated, dont’ we need the bond to fix Webster? (12/3/15)

No. Immediately after the ceiling collapse at Webster in August 2015, the SED approved work on an emergency basis which means designs are approved immediately and state reimbursements are made immediately. Funds were allocated by the District for the repair work. The design work was completed. In the video below, you will see our enginer, Tom Ritzenthaler of CSArch tell voters in Clarkstown that the work at Webster in the Summer of 2016 is really just an extension of the existin emergency and therefore not “new” work. Webster is being fixed no matter what and regladless of the bond.

If you have questions or wish to support this call to defeat the bond please reach out to Robert Cox, 914-325-4616, [email protected]

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ADDITIONAL INFORMATION

In Rockland County, New Rochelle is being held up as the example of how not to manage facilities. The enginener for Clarkstown School District is Tom Ritzenthaler of CSArch who is also the engineer and project manager in New Rochelle. Readers might want to hear how he talks about New Rochelle outside of New Rochelle.

Clarkstown SD Bond Input Forum October 2015

Readers might want to see how other school districts welcome dialog with the community and how New Rochelle stifles it.

Compare Bond Input Welcome: Clarkstown, NY v. New Rochelle, NY

Readers might want to see how Dr. Osborne and Mike Orifici, his Capital Construction Consultant, dissemble with regard to a report proven to exist which they deny exists. The report in question is from the Spring of 2014 about the conditions of the schools and makes pointed reference to the unsafe conditions with the roof/ceiling at Webster School, warnings which Dr. Osborne ignored with the well-known result that the ceiling collapsed, the school was taken off line and the entire school community relocated on short notice at a cost of $2 million.

Remarks by Robert Cox at New Rochelle Bond Input Forum 10-22-2015