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RTM Denies $87K Request to Cover Cost Overrun for School Parking Lot Expansion

School board accused of illegally covering overage from operating budget without approvals from BET, RTM — conspiracy theories abound.

Ignoring pleas for forgiveness from the chairman of the Board of Education, the Representative Town Meeting on Monday rejected a request for a budget transfer of $87,279 to cover unauthorized cost overruns for the expansion of the North Mianus School parking lot.

The project, which was completed last year, was budgeted at $700,000, but the discovery of a failing sewer line and a miscalculation of how much pipe was needed for a storm drain caused it to run into the red.

Although no one has questioned the validity of the cost overrun, the Board of Education and Superintendent of Schools Dr. Sidney Freund found themselves in hot water after it was discovered that they knew about it in April and, instead of notifying the appropriate town boards, namely the Board of Estimate and Taxation and the RTM, went ahead and paid for it out of the Board of Education’s 2010-2011 operating budget without approval.

“The paper processing failed, the result of which was that work was authorized for which no money had been appropriated,” said Robert Brady, chairman of the RTM Education Committee, in explaining what happened. “That is a violation of our charter, and, according to town counsel, several state statutes — bottom line is, we broke the law.”

The matter came to light in April when a contractor for the project contacted First Selectman Peter Tesei asking why he had not been paid. This resulted in a review and, apparently in an effort to expedite the payment, the school board erroneously ended up paying the contractor out of the current operating budget without first getting the required approvals.

“That is not allowed, under town charter, and that is a problem,” Brady said, adding that the Board of Education went to the BET in May and requested a transfer to cover the funds in the current budget, “and that is what is before us now.”

“The Education Committee recommends not approving this,” Brady said, adding that committee members voted 1-7-3 to reject the request. This despite a promise from the school board that “procedures are in place now to prevent a change order from being approved without proper funding.”

Members of the RTM’s Finance Committee also voted against the request, 2-8-2. That committee also recommended that the RTM reject the request and tell the Board of Education to “find the funds in its current operating budget.”

Steven Anderson, Board of Education chairman, admitted to the error and asked the RTM for forgiveness.

“We made a mistake. We messed up the process,” Anderson said with Freund at his side. He said the error occurred due to a “series of issues and missteps” in the process.

“No one is questioning the validity of the overages,” he said. “All agree that they were necessary to finish the project. It’s the fact that we messed up on our internal controls … we messed up on how we thought we were supposed to correct the issue when it came to our attention in April.”

“There have been some appropriately strong words about this issue,” Anderson continued. “We were taken to the woodshed at the May BET budget committee meeting, we were taken to the woodshed during the May BET meeting, and we will be taken to the woodshed tonight. And it is deserved. However, while this was not handled correctly there was zero ill intent as to any of this, nor was any effort to hide anything or delay notification. I take umbrage when people attempt to link this miscue to some greater conspiracy – such as MISA, the budget vote, the superintendent resignation or some other political issue.”

Anderson said he’s confident that the error will not reoccur, as the school board has “instituted procedures to ensure this does not happen again.”

“As a Board of Ed member, I’ve stood in front of you six years now,” Anderson said, addressing the 230-member legislative body. “Collectively we’ve worked through approximately $700 million worth of operating budgets, and about $60 million worth of regular capital budget needs. Our budgets have come in under BET guidelines and we have regularly returned unused money to the town. We’re not just spending the money because we have it. In six years, I’ve never had to stand here and apologize to you – but tonight I do. We understand that this $87,000 black mark hurts our reputation as good fiscal stewards of our school system. And we need to regain that reputation quickly. We are truly sorry for this situation – and we are confident that we have corrected the issue going forward.”

Despite Anderson’s plea for forgiveness, the RTM voted 82-96, with 16 abstentions, thus rejecting the request for the budget transfer.

The controversy comes on the heels of last month's surprise resignation of Freund and finger pointing between factions of the school board over what led to his departure.

The Board of Education must now return to the BET to resolve the matter and pay the contractor, Fred Durante Jr.

Ed Krumeich June 15, 2011 at 02:22 PM
The BET will simply transfer the funds from another capital project that underspent appropriated funds to make up the difference and pay the contractor. The BET does not like it when a department overspends a capital appropriation but it happens from time to time. The newspapers and the RTM made this appear much more significant than it was because the little understood process of closing out accounts fiscal year end invited demagoguery on the school board controversy that is consuming all the political oxygen this municipal election year. What took heated hours of debate at the RTM meetings this month will be handled in five minutes by the BET without any press coverage.
Liberty! June 16, 2011 at 01:06 AM
Barvo well said
John Raben June 16, 2011 at 01:12 AM
Judging from his comments, Ed Krumeich (with whom I served on the BET) seems to think "no harm, no foul" is the relevant criterion in this situation. He is wrong. The BET has long-established and well understood procedures for cost overruns and interim appropriations. They are part of the foundation of the Town's fiscal oversight policies. It is simply inconceivable that no one at Havemeyer could be unaware of these procedures. Havemeyer chose to ignore them, no doubt hoping the problem could be snuck through at fiscal year-end. The fact that Dr. Freund chose to inform only two selected members of the BOE is further proof that his strategy was to ignore the policies and hope the BET and RTM wouldn't notice - or care. Why wouldn't he tell all 8 BOE members and the BET if it was an innocent mistake? It rightly backfired on him.
Ed Krumeich June 16, 2011 at 03:15 AM
John you are too close to this controversy. Under the Charter all this took is a transfer request to the BET that doesn't even require RTM approval. Instead the BOE went the supplemental appropriation route that requires RTM approval and a much more public process. Unfortunately, this minor matter has attracted the ire of those of you who are caught up in the hand wringing over the Superintendant's resignation and the lingering bad feelings over MISA funding.
Anderson June 16, 2011 at 03:40 AM
Here he goes again. Chris von K, aka "Liberty", Mr. Tesei's man, agreeing with Democrats? Maybe Frank Farricker had it right: Tesei has joined the wrong party. He is a wannabe Democrat.
Chris Davies June 16, 2011 at 04:36 AM
Mr. Krumeich: It seems that you are trying very hard to think of ways to sweep all the bad decisions and illegalities under the rug. Perhaps you are just part of the problem as a card carrying member of the status quo. The superintendent is a professional. He should know what to do, and how to do it, especially at the highest salary in town. Leslie Moriarty and Steve Anderson have both been on the BOE for two terms. Are we to believe that this all was an innocent mistake?
Ed Krumeich June 16, 2011 at 02:22 PM
Not at all, I am simply trying to explain how overpayments are dealt with under our municpal financial system. Indeed, I understand the BET has already approved the transfer. As far as my being part of the status quo, my understanding of that term (based on Catholic high school latin at the late lamented St. Mary H.S.) is "the existing condition"; since I went off the BET in 2010 after 14 years service I am more properly described as part of the "status quo ante" or "the previous condition."
Liberty! June 17, 2011 at 11:58 PM
When will the attacks cease and constructive dialogue start. It is tiring to see such negative attacks from mr" anderson " and " mr Davies" . Adult conversation would seem to be a better tack!
Above The Law June 18, 2011 at 07:41 PM
Stop this now, and give us the money. We are the SCHOOL BOARD, and we are above the law. We answer to nobody. Stop pretending that we have to follow rules. While we're at it, that 29 million for the auditorium will really be 40 million. We need it to hide the fact that the schools are mediocre, at best. Remember, we are ABOVE THE LAW.
Liberty! June 20, 2011 at 02:14 AM
Let keep attacking the schools and insulting the board that is a great forward looking strategy. Let keep the facilities third rate that is a brilliant solution!

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