You Should Be Mad as Hell at School Board Ponzi
When will the real perpetrators lose their jobs?
The Broward County School Board is being ravaged by budget cuts and layoffs. A total of 461 noninstructional employees have already lost their jobs and teachers are supposed to be getting their pink slips today.
The people who really need to be fired -- if not thrown into the stockade -- are the superintendent and eight of the nine board members.*
Some deserve much worse than just the loss of their positions. Why? Because they ran our school district like a Ponzi scheme that benefited their political benefactors, the school construction industry and its lobbyists. Riding the bubble, the board overbuilt the district by a projected 35,000 seats -- roughly the size of the entire Oklahoma City School District -- and financed it not only on taxpayers' money but on their futures: The district is now some $2 billion in debt.
Scott Rothstein couldn't have done it any better. What we're experiencing now is the implosion of the board's crooked games. The writing was on the wall by the middle of last year. In July, these layoffs were predicted. This is from a screed that was published last July 23 that
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must be revisited today**:
It has become clear now that the madhouse construction of classroom additions and new schools in Broward County is coming to a crash that will rival that of crooked Wall Street banks. The School Board's irresponsible and possibly criminal actions have wasted hundreds of millions of taxpayers' dollars and left the district awash in debt
A trail of records shows that it was all a high-stakes game, an orchestrated raid of the public trough. That wasted money was transferred to a favored pool of school district contractors and their lobbyists and cronies. Chiefly to blame are high-ranking officials who knowingly overbuilt schools and elected School Board members who not only failed to responsibly oversee the district but also were complicit in what can only be described as a financial disaster.
School district records show that from 2002 to 2007, the board's budget for school additions and renovations more than doubled, from about $487 million to $1.05 billion. Hundreds of millions of contracts flowed, without public bids, to politically connected local builders like Pirtle Construction and Moss & Associates.
That rush to build has left the county with more than 25,000 empty classroom seats, a number that is projected by the board to rise to 34,800 by 2013. That comes to about 1,400 classrooms. Multiply that by the average cost of a classroom in the district, $250,000, and you get the total dollar amount that the board overspent during the past several years.
It comes to a staggering $350 million wasted on unnecessary classrooms additions and schools.
... To understand why district officials and School Board members would come to serve contractors over the interests of taxpayers and children, understand that builders largely fund School Board members' campaigns. Pirtle, for instance, hired lobbyists Neil Sterling and Barbara Miller, who not only raised huge amounts of money for the board members but actually ran several of their campaigns.
On top of that, School Board members love to brag about new schools in their districts. They just failed to mention these past few years that the projects weren't necessary.
They fed the machine -- and played the public for suckers. The district overlords didn't just spend money they had on hand but they also borrowed huge amounts of money.
Financial records indicate that the School Board's $2 billion in debt was raised through certificates of participation, which are similar to bonds but can be issued without voters' consent.
The new District Education Facilities Plan, issued July 14, clearly spells out the damage done. Over the next five years, the School Board will spend $763 million in debt service alone. That comes to 60 percent of the capital budget through 2013-14.
It's a dire situation, and it never should have been allowed to happen. State-mandated checks are in place to prevent calamities like this, but district officials and board members thwarted them.
School construction, for instance, is supposed to be based on in-depth population and student-count studies known as "plant surveys." Those surveys are required by state statute to be updated every five years.
The Broward school building frenzy was based on a survey completed in 2001, when classrooms were overcrowded and great population growth was forecast. But when that survey expired in 2006, the trend had already changed, seats were empty, and the county's population was beginning to decrease.
A new School Board survey would have shown this and prevented the building of hundreds of millions of dollars of unnecessary construction projects. Instead, the School Board in 2006 violated the law and simply re-adopted the old survey. It did the same in 2007 and again in 2008.
For three years, the board kept the gravy train rolling, building and borrowing based on an outdated and useless survey. And the state sat by and allowed it to happen even as top School Board officials clearly knew the new construction wasn't warranted or justified.
Again, proof of purposeful deception can be found in public records. During a project management meeting on September 25, 2007, at the height of the building frenzy, Michael Garretson, deputy superintendent over construction and facilities management, explicitly ordered project managers to rush through building plans before a new survey was done.
Garretson, according to meeting minutes, told staff that new schools and classroom additions "need to be bid because of the new state survey which is due the last of October, which will most likely remove all of our capacity additions," according to meeting minutes.
It's clear that Garretson told his troops to push through the construction projects before the truth came out that they weren't needed. Garretson didn't respond to calls for comment.
Project managers in the School Board's construction department were aware of the scheme. One even complained about it to numerous school officials, including Superintendent James F. Notter and all the board members. In a May 5 email, project manager Michael Marchetti wrote that he and others on several occasions "were clearly advised to move [classroom additions] along because a new plant survey was looming and the state was going to deny additions because we were already way over capacity."
Marchetti added: "So it would appear that while we were admittedly losing students in those years the board and management continued to knowingly and willingly utilize outdated statistics in order to justify unneeded new construction."
When questioned about the email, Marchetti refused to discuss the details. He did say that he expected to hear from board members and district managers about the problem but got no response.
Garretson kept rushing out the construction projects until 2008, when the state Department of Education finally stepped in and forced the board to conduct a new survey. In November 2008, Notter explained the situation in a report to the School Board. He acknowledged that eight years had gone by without a new survey.
When the state produced its own surveys showing that school construction in Broward wasn't needed, district officials disagreed. "There was controversy between Broward County's student numbers and the state's numbers," Notter wrote in the memo.
When the state finally forced the board to conduct the study, a makeshift "preliminary survey" quickly determined that there were tens of thousands of empty seats, wrote Notter. Yet even then, Notter and the board seemed upset at the state's order. "School board members want to make it clear that it is the state that is mandating the plant survey... and not the school district," he wrote.
Sounds almost like they were trying to tell the contractors, angry that the well was going dry, that it wasn't their fault. Notter didn't respond to calls for comment.
By that time, though, the damage was already done, the money already spent, the projects already irrevocably under way.
... Next year, less than $2 million -- next to nothing -- is available for all capital improvements. For the following five years, there's no money in the School Board's budget for any new construction or renovations. Zero.
Soon there won't even be money to pay the department's employees. The new budget shows that the construction department's $27 million payroll will be reduced to about $14.5 million in two years. About half the construction and facilities department staff are projected to lose their jobs.
Blame is easy to spread around. Top School Board officials - including Notter and Garretson - were obviously complicit to the point that they may as well have been working for the contractors. Elected School Board members shepherded along the projects as payback for political donations. The state failed miserably, allowing the board to break the law for too long.
But it's Broward taxpayers who are on the hook, and they'll be paying for phantom classrooms for years to come.
Are you mad as hell? Well if not, consider this: Michael Marchetti, the voice in the wilderness at the School Board who exposed much of the fraud and waste, was one of those who received his pink slip this past week.
And while everyday heroes like Marchetti lose their jobs, Notter and his derelict crew of School Board members marches on.
*Kevin Tynan was only recently appointed to replace convicted bribe-taker Bev Gallagher, so he can't be blamed for the Board's abject failures.
**Here's a link to the original blog post, "Busted: Broward's Bogus Building Boom Exposed."
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