New Jersey School Construction Chief Resigns

John Spencer, head of the school construction agency, resigns. New York, meanwhile, awards $132 million in water projects.

CFO Takes Over N.J. School Agency

John Spencer, who had been CEO of the embattled New Jersey Schools Construction Corp., left his post in September for an undisclosed position in New York.

Spencer was the second chief of the agency that got its start in 2002, after court rulings ordered the state to invest capital funds in 31 school districts in order to equalize spending in poorer and wealthier areas. The original $8.6 billion five-year capital fund, which also had money for wealthier districts, now has less than $2 billion, with more than 2,800 projects completed. But the agency has built far fewer schools than state leaders had envisioned.

Peter Maricondo, who had been hired as the organization's CFO in May, became Acting CEO in September after Spencer left. Alfred Koeppe, who chairs the agency's board, announced that it would search for a permanent CEO this year.

The agency built fewer schools than planned due to various factors, according to an agency spokesman, including budget estimates that did not hold up against inflation, rising land and materials costs, and unforeseen site remediation expenses. It also came under fire earlier this year when the Newark Star-Ledger newspaper showed that the agency had racked up significant cost overruns on inner-city projects relative to other jobs led by local districts in suburban and rural areas. In public statements, the agency's leadership contended that the cost disparities owed to the greater difficulty and expense of building in urban areas.

The newspaper report nevertheless prompted Acting Gov. Richard Codey to ask Inspector General Mary Jane Cooper to start an investigation. He also had the schools agency halt all new project awards as Cooper began her inquiry.

Cooper's early findings pointed to "weak internal management and financial controls" as well as "lax and/or nonexistent oversight and accountability." Her initial report recommended various changes, including hiring a CFO or controller from outside of the agency, increasing the role of an internal auditor, and changing various fiscal policies and contracting practices. The agency started making those changes in late spring, which included the hire of Maricondo as CFO.

"Internal controls have been put in place, corporate governance policies have been established, and budgets have been set," Koeppe said in a statement announcing Maricondo's appointment as acting CEO. "I am confident that he will be an effective leader while a search is underway for a permanent CEO."

Smart Growth Permitting for N.J.

A new law in New Jersey is requiring state agencies to set up offices intended to speed up and simplify the process of permitting, as well as to increase cooperation among those offices.

The changes, part of the state's larger development plan, were signed into law over the summer by New Jersey Acting Gov. Richard Codey.

The changes include having the Department of Community Affairs appoint a Smart Growth Ombudsman and the state's departments of environmental protection and transportation each setting up a Division of Smart Growth. These divisions will also be partly responsible for implementing federally mandated and delegated programs.

The law does not affect expedited permits, permits-by-rule, or general permits issued by the state department of environmental protection, because the state still has to reach an agreement with the federal government concerning the new law's impact on several federally mandated programs.

Water Projects Financed in N.Y.

More than two dozen water projects aimed at preventing pollution and protecting local drinking water supplies will receive money in a new $132 million low-interest, long-term loan initiative unveiled over the summer in New York.

Gov. George Pataki announced that the monies will support 26 projects statewide through the New York State Revolving Funds program. The bonds will flow through the New York State Environmental Facilities Corp. and the loans will be administered through the state's Department of Environmental Conservation and the Department of Health.

The largest loans are pegged for Rockland County, which will receive $38 million to develop a wastewater collection system, wastewater treatment plan, and a diversion force main. The project would be complete in January 2007. Other water pollution program loans include $13.3 million for improvements to a wastewater treatment facility in Lake Placid and two on Long Island: $10.5 million to construct liner systems and a cap for a Brookhaven landfill; and $5.9 million to cap the Springs Fireplace Road Landfill in East Hampton.

The largest drinking water improvement loan would go to the Suffolk County Water Authority, which will receive $7.8 million to build and replace wells in Babylon, Brookhaven, Smithtown, and Southampton.

Since the water pollution program's 1989 launch, the state has financed more than $11.2 billion for 1,248 water clean-up projects. The drinking water program begun in 1996 has financed $1.48 billion for 473 improvement projects.