Tuesday, February 14, 2006

Jones Lang LaSalle

New Governor Targets $8B-Plus Schools Construction Corp. for Reform
By Eric Peterson
Last updated: February 10, 2006 01:46pm

TRENTON-Formed in 2003 and given an initial budget of $6 billion to rebuild the state’s troubled urban schools, the Schools Construction Corp. was ultimately given a total of $8.6 billion in state funding to work on suburban schools as well. But for the past year, the program has been in disarray, its top leadership resigning in the wake of charges of mismanagement, cost overruns and running through its budget with only a small percentage of its designated projects completed.

During the recent period, the SCC has been under the scrutiny of the state inspector general, and new Gov. Jon Corzine has put an exclamation point on that scrutiny with an executive order to facilitate a review and reform of the program. Among other things, the executive order appoints a half-dozen new members to SCC’s board of directors and establishes a working group to study the program and recommend reforms.

“This executive order reflects my commitment for reform of [the program],” Corzine says in a prepared statement. “I have full confidence that…this administration will be able to work with local boards of education and communities to ensure the school construction program delivers schools that meet the needs of our children at the best price.”

Corzine’s appointments to the board include Barry L. Zubrow, a member of the boards of Nuvelo Inc. and GSC Capital Corp., who will be SCC’s new board chairman. “Making this agency efficient and accountable is an important goal that when accomplished will go a long way toward offering New Jersey’s student a better education and brighter future,” Zubrow says.

The other five appointees are Raymond M. Burke III, president of Burke Motor Group; Laurence M. Downes, chairman and CEO of New Jersey Resources Corp., parent company of New Jersey Natural Gas; Cecil R. House, vice president of Public Services Enterprise Group; Joseph A. McNamara, director of the New Jersey Laborers’ Employers Cooperation and Education Trust; and Gabriella Morris, vice president of corporate social responsibility for Prudential Insurance and president of the Prudential Foundation.

The executive order also names Scott Weiner, a faculty fellow at Rutgers University, to the new oversight position of special counsel, with responsibility for supervising the working group that will study the agency and ultimately make recommendations. The group itself will consist of the acting commissioner of education, the acting state treasurer, the state’s special counsel and, as chairman of the SCC, Zubrow, assisted by an advisory panel of citizens. And the executive order gives little time to get started--Corzine wants an initial written report on recommendations for immediate improvements by March 15.

The executive order, finally, directs the state attorney general to initiate legal action to recover damages from contractors who are determined to have overcharged SCC or who provided faulty services.