Inside Ocean County Government

Lacey, Transparency

GRC Orders Lacey School Board to Produce Solar Project Documents After Board Member Files Complaint

TRENTON –  The state Government Records Council (GRC) has taken formal action on a Lacey Township school board member’s complaint filed in 2015 against her own board of education, which alleged violations of the state Open Public Records Act (OPRA) after the board member, Regina Discenza, requested documents related to the school district’s controversial solar panel project. The GRC issued an interim order earlier in December compelling the school board’s production of responsive documents for the Council’s review, in camera. The solar project was previously investigated by the state comptroller’s office, which criticized the project’s financing and lack of oversight in a 2014 comptroller’s alert.

Elected School Board Member Forced To Request Records As A Citizen Under OPRA

Regina Discenza, a member of the Lacey Township Board of Education, contends that she was first denied access to public records when she was requesting them in her capacity as a board member, following her election to the board in 2014. According to her complaint, when school district officials failed to respond to her board member request for nearly a month, Discenza submitted an OPRA request to the district for the same documents as a private citizen, with that request originally being submitted on June 1st, 2015.

Since her second request was made under the OPRA law rather than informally as an elected board member, Discenza was granted certain statutory protections, such as the mandatory 7-day response deadline, among other benefits afforded by the state transparency law in making her second request.

The gravamen of Discenza’s GRC complaint was that Lacey school district officials failed to adequately respond to her requests for records related to the solar project and records pertaining to the school district’s utilization of legal services following her election to the board of education.

“I have attempted to obtain these records since April 29th, 2015 as a Lacey Township School Board member,” Discenza wrote in her complaint filed with the GRC. “After waiting about a month, I decided to try an OPRA request since the records requested were not pertinent to any pending litigation.”

In her June 1st, 2015 OPRA request, which was read aloud at a past school board meeting and delivered in writing to then-Business Administrator / Board Secretary Jim Savage, the district’s custodian of records, Discenza sought correspondence and memos related to the school district’s solar panel project, which saw 6 schools in the township outfitted with solar panels in a plan that was funded with $19.8 million in bonds.

Legal Bills List “Information” Received From Solar Project Architect, Savage Says “No Record Exists”

According to documents filed with the GRC, Discenza used information that was listed on the school district’s 2013 legal bills in order make her request for records, as the legal bills from the month of December, 2013 sent to the school district from its legal counsel, the Forked River-based Stein & Supsie firm, revealed that school board attorney Arthur Stein was in contact with Joseph DiCara, the architect of the multi-million dollar project that was investigated by the state.

2013 legal bills that showed contact between DiCara and Stein

The emails that were the subject of the Lacey school board member’s OPRA request were sent by then-school board attorney Arthur Stein in his official capacity as board attorney to Joseph DiCara, principal of the architectural firm that designed the project. In the emails, Stein sought and received unspecified “information” regarding the project that Stein claims the school district subsequently provided to the state comptroller’s office, which investigated the project prior to their issuance of a 2014 comptroller’s alert.

The school district’s custodian of records, Mr. Savage, failed to respond to Discenza’s OPRA request within the statutory 7 business day period required by N.J.S.A. 47:1A-6, instead waiting until June 23rd, 2015 to formally deny her request, a full 16 business days, according to the interim order.

An Asbury Park Press report from 2015 identified Savage as one of the highest paid school officials in the State of New Jersey and the highest paid official in the Lacey Township School District prior to his retirement.

The denial

Savage’s denial of Discenza’s request stated that “no record exists” for all three items that were the subject of the request.

But the board’s attorney changed the district’s story, at least as to items 1 and 3 of Discenza’s request, in his formal written response to her complaint (known as a statement of information), which was filed with the GRC in August of 2015.

Now, rather than claiming that no record existed of the DiCara correspondence, school board attorney Arthur Stein made the assertion that there were 36 emails and one memorandum that were potentially responsive to parts 1 and 3 of Discenza’s request. Stein argued in filings with the GRC that the requested emails were privileged, and exempt from public disclosure in their entirety under OPRA’s attorney-client privilege exemption, attorney work product exemption, advisory / consultative / deliberative (ACD)   exemptions, collective bargaining and student records exemptions and the New Jersey Rules of Evidence.

Stein’s response additionally claimed that the dates shown for correspondence on legal bills do not necessarily match up with the dates that it is actually sent.

GRC Orders Board To Produce Emails And Memo For Review

The GRC’s interim order from earlier in December requires that the school district provide the Council with copies of the emails and memorandum so that the Council can independently review the documents to determine if their denial by Savage an Stein was valid under the Open Public Records Act. The order gave the school district 5 days from their receipt of the order, which was rendered at the Council’s December 13th, 2016 public meeting.

The GRC also ruled that the school district lawfully denied item 2 of Discenza’s request because its wording “failed to proved ample identifiers to allow the Custodian to locate responsive records.”

More action is set to be taken on the complaint following the GRC’s in camera review of the emails and memo.

While the school board’s written formal response to Discenza’s complaint was issued by longtime Lacey school board attorney Arthur Stein, the board is currently being represented by attorney Christopher Supsie, a partner in Stein’s firm. Mr. Supsie’s wife is currently employed as a teacher within the same school district he now represents. Savage has also since left the employ of the Lacey school district, having retired.

Comptroller’s Office Cites “Gross Overestimation” Of Lacey Solar Panel Project Costs

By all accounts, the Lacey Township Board of Education’s entry into the solar energy market was an exercise in government excess and a financial sore point for the school district, which at one time circulated flyers promoting the project that claimed the project will result in “no tax increase to you.”

While the school board’s sales pitch for the project painted a rosy picture during the 2008 bond referendum, a March, 2014 alert issued by the New Jersey State Comptroller’s Office told a different story about the project. The alert, which followed document subpoenas served on the district as a part of the state investigation, claimed that an unnecessarily high amount of taxpayer dollars were expended on the school district’s solar panel project, which in turn resulted in millions of dollars worth of state aid being unnecessarily expended and the board taking on more debt than what was necessary to finance the project.

Literature that promoted the solar referendum in Lacey

“Perverse Incentive” To Inflate Solar Project Costs

In their 2014 alert, the comptroller’s office first took issue with the fact that the architect’s contract set the firm’s compensation as a percentage of the total cost of the solar project. “Such an arrangement gave the firm a perverse incentive to inflate the estimated project costs,” the alert said.

The comptroller’s alert said that the architectural firm hired by the district, DiCara Rubino, estimated the solar project’s cost at $16 million, but the actual costs only came to be $9.9 million. According to the comptroller’s office, the 38% overestimation cost taxpayers an additional $455,000 in fees paid to the architectural firm.

$4.7 Million Of State Aid Unnecessarily Expended, Comptroller Says

Both Lacey Township and state taxpayers took another multi-million dollar bath on the overestimation of the project’s cost, leading to the school board borrowing more than the amount necessary to fund the project, according to the State Comptroller’s Office.

“The firm’s significant overestimate of project costs also resulted in the District overbonding for the project by $8,240,000,” the office wrote in the 2014 alert.  “This in turn caused the unnecessary expenditure of an additional $4,717,576 in state tax dollars, as the Department of Education (“DOE”) subsidized the project by funding a percentage of the firm’s projected budget.”

The alert stated that the extra money left over from the bonds were used to pay down unrelated school district debt.

The comptroller’s office attributed 70% of the blame for the project to a “lack of district oversight” rather than a decline in construction costs.

The office also provided two recommendations for other school districts to prevent what happened in Lacey from reoccurring elsewhere:

  • “In hiring an architectural firm, school districts should make sure that the firm has experience in projects of similar scope and size.  Although not required to publicly bid contracts for architectural services, school districts should nonetheless look at more than one firm and use a competitive vendor selection process whenever practicable.”
  • “School districts should carefully structure architectural service contracts and related documents to prevent overbonding and waste of taxpayer money, and to prevent architectural firms from receiving windfall compensation. School districts should have their attorneys, their architect of record and/or other representative review the contracts and other documents.”

A copy of the interim order is viewable below:

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