Agency Breaks Ground on Only One New Major School Project in Three Years
An analysis by ELC of financial records since January 2010 shows the New Jersey Schools Development Authority (SDA) spent a total of $114 million on agency staff, office space, legal services, communications and other administrative expenses over the last three years. That amounts to a staggering 17% of the $661 million in SDA expenditures over the three-year period.
SDA costs are “stunningly high” and “way out of line” with the administrative overhead of similar school construction agencies in other states, said Mary Filardo, Executive Director of the Washington, D.C.-based 21st Century School Fund. Ms. Filardo is one of the nation’s leading experts on the impact of school facilities on student learning and has served as a consultant and advisor to state and district school facilities planning and construction programs.
The SDA is charged with planning and building new schools, school renovations and major building repairs in high poverty districts known as “SDA districts.” By law, the SDA must do all school construction and building repair projects in these districts. In all other school districts – known as “Regular Operating Districts” or “RODS” – the SDA provides a grant to pay for the state share of local district projects pursuant to a formula established in state law.
In SDA districts, the agency has completed a handful of major school projects started before Governor Christie ordered a halt to dozens of projects in January 2010, some of which were “shovel ready.” From limited information available to the public, it appears the SDA actually broke ground on only one new major project in three years, an elementary school in Long Branch. No new major projects have been completed, except for those where construction had started prior to Governor Christie’s “stop work order” in 2010.
The SDA still has over $4 billion available in bonded financing for facilities projects, both direct construction in SDA districts and grant payments to RODs.
In the past two years, the largest share of disbursements for school facilities projects has been in the form of grant agreements for projects for which the SDA has no responsibility, while disbursements for actual construction projects overseen by the SDA has dropped. In 2010, approximately $203 million, or 73%, of SDA disbursements went to planning, construction and related costs for SDA-run projects. By 2012, only about $55 million, or 32%, of SDA disbursements were earmarked for these projects. It is unclear why the SDA’s overhead costs remain so high even as they have slowed progress on agency-run school construction and repair projects.
Based on financial records through November, the SDA is on track to spend $34 million on administration for 2012, slightly below the $35 million spent in 2011. While overall project funding has dropped by 40% since 2010, operating expenses have not kept pace, declining by a mere 22%. A breakdown of the SDA’s $34 million in agency overhead shows:
- $29 million on salaries and benefits;
- $3.6 million on general office and facilities expenses;
- $1.3 million on management information systems;
- Over $400,000 on interagency agreements and other contracted services;
- $115,000 on parking and automobiles.
“The SDA has no trouble spending taxpayer dollars on staff, office and administrative expenses, while leaving thousands of schoolchildren trapped in buildings that are unsafe, dangerous and unfit for teaching and learning,” said David G. Sciarra, ELC Executive Director. “We could have built four new elementary schools for hundreds of at-risk students with the money spent to maintain the agency’s bureaucracy over the last three years.”
“SDA’s administrative overhead is nothing short of astounding, especially given how little actual school construction the agency has undertaken since 2010,” Mr. Sciarra added.
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