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  FOR IMMEDIATE RELEASE
October 31, 2002
PR-283-02
www.nyc.gov


MAYOR MICHAEL R. BLOOMBERG AND CHANCELLOR JOEL I. KLEIN ANNOUNCE FUNDAMENTAL SCHOOL CONSTRUCTION REFORMS


Merger of SCA and DSF is First of Children First Reform Initiatives


Mayor Michael R. Bloomberg and Schools Chancellor Joel I. Klein today announced fundamental structural changes in the way that New York City builds its public schools. Through the merger of the School Construction Authority (SCA) with the construction functions of the Department of Education's Division of School Facilities (DSF), the City aims to significantly reduce the costs of school construction by having one agency accountable for school construction and renovations. The announcement occurred at the construction site for P.S. 234 in Queens.

"For too long, the construction of public schools has been plagued by inefficiency, delay, and cost-overruns, hurting the quality of the City's schools while driving up their cost," Mayor Bloomberg said. "Thanks to the school governance reform achieved earlier this year, we have a great opportunity to exact fundamental change in designing, building, and repairing our public schools, and improving education in the City as a whole. These reforms will help us infuse accountability in the construction process, reduce costs while improving facilities, and relieve overcrowded conditions in the schools. Today's announcement is indicative of the kind of major changes we can look forward to under Children First."

"When I first introduced Children First, I emphasized that we need reforms that are fundamentally sound and will produce results," Chancellor Klein said. "The actions we are announcing today will bring down school construction costs by creating accountability within the new structure and by increasing the number of competitive bidders engaged in the school construction process."

The immediate reforms call for:

The goal of these reforms is to pay substantially less for new schools, driving down the cost of construction from its current $438 per square foot to $325 or less per square foot while constructing and renovating high quality schools. Legislative changes may be necessary to formalize some of the reforms.

The Board of Education's DSF exclusively conducted all public school construction projects until 1988, when the state legislature created the SCA to better facilitate the process. Following the creation of the SCA, however, the two agencies reported to separate boards and failed to establish an effective working relationship, creating a lack of accountability in school construction. As a result, these large bureaucracies produced drastic cost over-runs and failed to alleviate overcrowding. The Moreland Commission, appointed by Governor Pataki to investigate the school construction management and administrative practices of the Board of Education and the SCA, noted these significant problems in a report released earlier this year.

By merging DSF and SCA responsibilities and overlapping operations and having one entity oversee school construction, the City will aim to increase efficiency and accountability in school construction and reduce unnecessary redundancies and expensive delays. The merger should enable the agencies to pool their resources and expertise while saving funds. While DSF's construction functions will merge with those of the SCA, its school support services, such as custodians, will remain separate.

With the changes in the school governance law, the Mayor now possesses the authority to appoint all three Trustees of the SCA, including the Schools Chancellor, who also serves as the Authority's Chair. Previously, the Mayor and Governor each selected one Trustee, and the Chancellor of the Board of Education served as a third Trustee. Mayor Bloomberg today appointed two new Trustees who will join Chancellor Klein on the SCA, Stanley E. Grayson and Craig M. Hatkoff.

Trustee Grayson is the chief operating officer at M.R. Beal & Company and was one of three members of the Moreland Commission. He also was managing director at Prudential Securities Incorporated, where he oversaw the Public Finance Department. Grayson was also Deputy Mayor for Finance and Economic Development during the Koch Administration.

Trustee Hatkoff is co-managing member of Cats Cradle Entertainment LLC, a children's entertainment venture. He is a former adjunct professor at Columbia Business School, where he founded its Real Estate and Capital Markets course. Hatkoff was also chairman of the Executive Committee of the Board of Directors for Capital Trust Inc., a NYSE listed real estate investment management company that he co-founded.

Mayor Bloomberg and Chancellor Klein today also recommended the appointment of William H. Goldstein as SCA President, who will oversee the day-to-day management of the merged school construction agencies. The Trustees of the SCA are responsible for appointing its President and they are scheduled to meet on November 7, 2002, to consider Goldstein's candidacy. Goldstein currently serves as vice president of O'Brien Kreitzerg/URS, one of the country's largest construction management and engineering firms. Prior to this, he was vice president and general manager of SmartRoute Systems, a high-tech company in New York City. He has vast experience in municipal construction projects, having served as Deputy Executive Director of the Port Authority of New York and New Jersey. In that role, he oversaw a $4 billion capital improvement program and supervised over 1,200 employees in the Engineering Department and the Office of Environmental Policy and Management.

"These men have deep-rooted knowledge of the construction, real estate, and financial sectors, and the strong management skills to get the job done," Mayor Bloomberg said. "I am pleased to appoint them to their new posts, and I am confident that, working with Chancellor Klein, they will provide our children with quality schools at a lower cost."

 

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