The free for all over the alleged $11.8 million in missing school projects money has reached new heights, with the Board of Education Finance Committee submitting a letter published in last week’s Bayonne Community News denying the city’s claims that the money’s missing – and then a city official refuting all of the BBOE’s assertions.
This comes after a contentious couple of weeks in which Mayor James Davis referenced the issue in his mayor’s column in the Community News on Jan. 21, and then spoke about it at the city council meeting later that day, only to have former mayor Mark Smith write a Jan. 28 BCN letter to the editor weighing in on the issue and suggesting that if Davis feels he’s uncovered something illegal to report it to the U.S. Attorney or N.J. Attorney General.
Also, on Jan. 29, the issue was brought up at the board of education’s regular meeting by members of a larger than usual crowd, including those who created and passed out flyers featuring a $1 bill with a strip across it asking, “$11.8 million?” The flyer included the picture of four BOE officials superimposed on the corners of the faux bill.
Since a Dec. 19 letter from City Business Administrator Joseph DeMarco to Schools Superintendent Patricia McGeehan, the city has contended that the board of education owes the city $11.8 million for school projects the city bonded for on behalf of the school system.
The projects needed to be financed in that manner because of the type of school board Bayonne had been until the Nov. 4 general election vote to change it to an elected school board, and therefore a different type of district.
After two meetings last year with state education officials, Davis said it was determined that the state’s School Development Authority had reimbursed $7.4 million to the board of education that should have been transferred back to the city. The SDA said there were also a number of open projects, totaling $4.4 million, which could not be closed out because of alleged inadequate documentation supplied to the state.
At the board of education’s Jan. 29 meeting, Board President William Lawson released a statement concerning the issue.
“The city has requested an audit of the Bayonne Board of School Estimate budgets, which the board welcomes,” Lawson said. “The Board of Education will fully cooperate with this, and has already reached out to the Department of Education to expedite the process.
The two most recent major developments were the BOE Finance Committee letter published in the Feb. 4 BCN, and Corporation Counsel John Coffey’s rebuttals to the group’s claims.
The letter to the BCN was an abridged version of the letter the BOE sent to the city in response to DeMarco’s Dec. 19 letter. (The full text can be found at bboed.org.)
Board of Ed’s contentions
In the letter, the board Finance Committee members laid out where they said the money has gone that had been received from the state or cited projects paid for by the BOE that the city actually owes the board money for.
The letter stated, “Currently, we do not dispute your calculations that the Bayonne Board of Education has collected $7.4 million from the NJSDA for various projects completed between 1999 and 2008. What is not mentioned, and what the present city administration may not be aware of, is that in June 2011 the Bayonne Board of Education wrote off $6.9 million in receivables owed to the board from the city of Bayonne. This is evidenced by the June 2011 CAFR [Comprehensive Annual Financial Report] audit which was authorized by the Bayonne Board of Education and the Board of School Estimate.”
The letter further states that on May 23, 2011, the Board of Education forwarded the city $6 million as payment for anticipated receipt of funding from the SDA.
“This $6,000,000 prepayment, along with the $6,241,249 claims against the city written off, exceeds the $11,800,000 the city alleges the Bayonne Board of Education owes it.”
The projects allegedly paid for by the Bayonne Board of Education on behalf of the city:
• 1990 purchase of a parcel of land – 24th Street & Kennedy Boulevard (615-619 Kennedy Blvd.), at Bayonne Board of Education expense and enhanced;
• 2002 East Fifth Street cleanup for bus storage/maintenance garage and dog walk; a 2006 sewer pipe from Public Library to 30th Street and the bay;
• 2006 sale of Bayonne Board of Education land behind #3 Dr. Walter F. Robinson School to city’s parking authority for a parking lot – money never received from the city parking authority;
• 2009 purchase of Juliette Street property, for a new repair facility;
• 2011 installation of fuel pump station at Hook Road for joint city and board of education use.
“In spite of this, the board has and continues to provide services to Bayonne residents for which it has not been reimbursed,” the letter said.
The letter also states that the BOE authorized the transfer of $3,999,725 to its capital reserve account on May 16 of last year and that the updated figure of $5,749,725 would be used to fund ongoing Regular Operating District Grant Projects, which address safety issues in school structures.
In the letter, the committee also references the Bayonne School District as one of the two most underfunded districts in the state.
Corporation counsel responds
But Coffey questions much of what the board maintains. His biggest issue is how a district so strapped for money could prepay $6 million in charges.
He also questions how all the alleged paybacks between the board and the city could have transpired with no record of it. Some of those items would have needed resolutions from the school board, the city, or both.
“There are no resolutions from anywhere,” Coffey said. “There are no resolutions from the board of education and corresponding resolutions from the city of Bayonne, or letters back and forth.”
Coffey said the funding the city is seeking is from school projects done between 1998 and 2008. The board items listed in the Finance Committee run from 1990 to 2011.
“Not one of these transactions, however, is remotely related to the city of Bayonne.” – John Coffey
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Coffey has a problem with the alleged $6 million-plus that the school board says that it has written off for the city. He said that the backup documentation provided by School Business Administrator Leo Smith in support of his conclusions “does nothing to buttress his argument that the board of education ever had any receivables to write off.” Coffey called the documents provided by Smith “mere filler.”
Coffey also disputes that the property purchases and/or improvements cited by the board for the 20-plus years time period have anything to do with the city.
“Not one of these transactions, however, is remotely related to the city of Bayonne,” Coffey said.
Coffey said this includes the 615-619 Kennedy Boulevard purchase, the 2002 cleanup, the construction of the 31st Street storm sewer, and the 2006 land sale for parking lot property, for which he contends the board has not been able to provide clear title.
Coffey also said that the 2009 transaction involving Juliette Realty falls into this category as well.
“It is similarly inappropriate inasmuch as this transaction does not involve the city of Bayonne at all …,” he said.
Coffey also questioned why the 2011 installation of a fuel pump station at Hook Road is listed as an item the school board took care of partially for the city.
“How, exactly, does the ‘joint use’ – Mr. Smith’s words – of this fuel pump station justify the board of education taking a full credit of $375.597.40?”
Coffey said that much of what Smith and the board claim is money paid back to the city or written off is nothing more than a red herring.
“Simply stated, the mathematic and logistical gymnastics utilized by Mr. Smith to explain how offsets against the $7.4 million that were supposed to have been provided to the city of Bayonne do nothing to advance anyone’s understanding as to how the 7.4 million dollars was ultimately spent by the Bayonne Board of Education.”
Joseph Passantino may be reached at JoePass@hudsonreporter.com.To comment on this story online visit www.hudsonreporter.com.