State panel attacks city on school budget gap

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The politicized saga of the city Board of Education and the current $1.5 billion shortfall in the school construction budget took another turn last week when the Moreland Act Commission blasted the board for failing to see the rising price tag of construction.

The commission report — which joined the ranks of those calling for the abolishment of the Board of Education — was the latest in a series of attacks on the board since it was revealed several weeks ago that the city’s budget for building new schools and repairing existing ones was running significantly short of funds. The state panel was commissioned in 1999 by Gov. George Pataki to investigate school construction.

Schools Chancellor Harold Levy, who has fielded harsh questioning from both the seven-member Board of Ed and the City Council since the overruns were exposed, lashed out at the commission report.

“I am particularly disappointed in the overblown rhetoric included in the report,” said Levy, who has readily agreed with the Board of Ed’s critics that the school budget formulas must be changed to avoid future shortfalls.

School construction is a hot topic in Queens, which has the most crowded classrooms in the city and a significant lack of property on which to build new schools. The city’s original $7 billion capital plan called for the construction of 23 new schools and one addition in Queens, which was slated to receive the majority of the dollars in the construction budget.

While Queens Board of Ed member Terri Thomson has called for an audit of the budget process to determine how to make up the $1.5 billion shortfall, one scenario included canceling six planned school construction projects in western Queens.

The report, which was leaked to the media July 25, said in part the Board of Education is “an unaccountable bureaucracy that has misled New Yorkers about billions of dollars of capital construction funds.”

In his response to the Moreland Act Commission report, Levy said “some have suggested that money was ‘squandered.’ There is a big difference between theft of the public’s precious school dollars and promising more than the school construction system could deliver. I do not excuse mismanagement — nor do I confuse it with theft.”

Queens Borough President Claire Shulman, who has created a “war room” at Borough Hall to maintain a vigil over school construction in Queens, also responded the commission’s report.

“The distressing finds of the Moreland Commission confirm our worst fears,” she said. The commission’s report “will not lessen our resolve to create new seats for our burgeoning school population.”

The Moreland Act Commission’s recommendation came less than a week after Levy, Board of Ed President Ninfa Segarra and School Construction Authority head Milo Riverso testified July 19 before the City Council on the budget shortfall.

The more than three-hour hearing at City Hall was led by Council Speaker Peter Vallone (D-Astoria), a mayoral candidate, and was a joint venture between the Committee on Education, the Committee on Finance and Subcommittee on Landmarks, Public Siting and Maritime Use.

Several Queens councilman attended the hearing, including Vallone, City Councilmen John Sabini (D-Jackson Heights), Mike Abel (R-Bayside), and Archie Spigner (D-St. Albans).

Sabini said the Council’s main questions on the budget shortfall had to do with the cost.

“Why are we in the position we are now?” he asked. “Was it a lack of good planning? Why didn’t more people know about this as it was happening?”

Vallone, who was present for the first 30 minutes of the lengthy hearing, said “let’s not play the blame game. Let’s all recognize that the bureaucracy has to be changed.”

Under the current system the Board of Education uses at least two main agencies — the School Construction Authority and the Department of Design and Construction — to build new schools or repair aging ones.

When planning is originally put forth, Levy and other members of the Board of Ed staff testified, the projects estimates include an 8 percent contingency to anticipate factors that could affect work, such as the cost of construction.

After council members criticized the 8 percent contingency as too small, Levy said “you’re right, you absolutely have to plan [adequately] for the cost of construction.”

Because of the intense need for new schools, especially in Queens which is roughly 30,000 classroom seats short, Levy and Riverso testified that projects to build new schools are often put in the pipeline without a definite site.

When an actual site is chosen for a construction project, Levy said, it drives up the costs of the already planned work.

Reach reporter Kathianne Boniello by e-mail at or call 229-0300, Ext. 146.

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