Flag Pole Paint Job at Trinity School Provides Primer on Financial Corruption in the City School District of New Rochelle

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TrinityFlagPoleThe corruption in the City School District of New Rochelle is deep and wide.

For those who have even tried to wrap their heads around it, they know it is just too much for one person to process.

I thought I might use this budget season to highlight some examples of, shall we say, "questionable" transactions that have occurred under Schools Superintendent Richard Organisciak, Assistant Superintendent John Quinn and Aramark Consultant John Gallagher.

I am going to try and use these examples as a way to educate those who still struggle to grasp the concept that our local school district is a criminal enterprise masquerading as an educational institution.

This is not to say that every administrator and every board member is corrupt only that the criminal element in our school system could not operate without its share of "useful idiots" who either do not believe or do not want to believe that the people around them are aggressively looting the school district at every opportunity.

There are three categories of corruption that make up the lion's share of the overall criminal activity in the school district.

1. Direct employees who are stealing time, converting school district property to private use or flat out stealing money, supplies, etc.

2. Hiring people from within the Friends and Family Network, often unqualified or incompetent people, and sometimes even convicted criminals.

3. Outside consultants who kick back money from inflated contracts.

This article will explore the outside consultant category.

New Rochelle outsources millions and millions of dollars to contractors. Some of these contractors provide education services, special education or psychological services, after school programs, pre-school programs and much more. For now, I will focus on outside contractors that provide "Buildings & Grounds" services.

Buildings & Grounds is run by John Gallagher who, in turn, reports to Assistant Superintendent John Quinn. Gallagher works for Aramark, a multi-billion dollar services company.

Talk of the Sound has already documented many, many examples of corruption under Quinn/Gallagher. The Westchester County District Attorney has made one arrest of a low-level employee but passed on other opportunities to make arrests or move up the chain of command.

What is important to understand is that Gallagher is not an employee of the District and cannot obligate the District in any way.

We have reported how John Gallagher was allowed to sign documents ordering the Civil Service Commission to cancel a scheduled civil service exam.

We have reported how Mr. Quinn and Mr. Organisciak attempted to put John Gallagher and two other Aramark employees on the District payroll in violation of the Aramark contract.

In this little highlight, we will report how Gallagher is ordering work to be done by another contractor without competitive bidding, without obtaining prior approval and then authorizing payment by signing an invoice for work done at his behest.

A contractor is hiring another contractor and a contractor is authorizing payment to another contractor.

Gallagher is legally, financially obligating the district when he has no legal authority to do so and when this violates the terms of the Aramark contract with the school district.

For many years, Aramark's contract with the school district was renewed without competitive bidding. Last year the contract was finally put out for bid but no other company bid on it.

You might want ask "Why would no other company bid?"

I was present when the bid was open. I was surprised to learn that day that under the terms of the Request for Proposal, the low bidder was not automatically the winner of the bid. Instead, Mr. Quinn would select the winner based on a criteria that basically amounted to "who knew the district best". Since Aramark has had the contract since the 1980's no other company could compete based on the criteria. Only one company even did a "walk through" to consider a bid but did not submit one. By setting the criteria for the RFP, Quinn created an outcome that allowed him to effectively circumvent the will of the board.

The board had reacted to our reporting of the many problems with Gallagher and Aramark by insisting that Quinn put the contract out for bid and Quinn basically thumbed his nose at the board by creating an RFP process that would allow Quinn to keep Aramark.

In order to avoid ANOTHER lawsuit originating out of B & G, I am not going to name names at this point but for those readers who know me and know that I know what I am talking about, let me just say that every aspect of the contracting that occurs in New Rochelle is corrupt.

And we are talking about large sums of money -- millions and millions of dollars being siphoned off through rigged bids, contract padding and outright theft.

But the point of this series is to explain how this works with specific examples.

For our first example, I am going to start small.

In 2012, the City School District of New Rochelle hired G.R.W. Plumbing (George Wood) to perform maintenance work at the Trinity Elementary School.

If G.R.W. Plumbing sounds familiar it is because this is the company (really the guy, George Wood) that was behind the Davis Elementary School Asbestos Exposure Incident over the summer. Wood is the focus of a New York State investigation regarding that incident. Anyone familiar with the inner workings of CVS Pharmacy would know that George Wood was once a contractor for them until he was not. Similarly, George Wood was a contractor in New Rochelle for many years but since the asbestos incident he is not. Feel free to draw your own conclusions what these things all have in common.

Now, before we get too deep into this story let me explain that this story is about a flag pole. Well, really five flag poles -- one big one, a 50 footer, to the side of Trinity Elementary School and four little ones on telephone poles on Pelham Road, in front of the school.

To put this story in context, let me educate readers on what it costs to buy a brand new 50-foot flag pole. You can Google around like I did and find all different types but here are three that are similar:

50footflagpoles

50 ft Fiberglass Flagpoles/External Halyard flagpole from Flag American - $3,600.00 (plus shipping)

50 ft Aluminum ground-set/External Halyard flagpole from United State Flag Store - $2,110.00 (plus shipping)

50 ft "Continental" Aluminum /External Halyard flagpole from American Flag Pole & Flag Company - $2,870.00 (plus shipping)

I found some that cost more, some less but for my purposes I am going to say that a high-quality, 50-foot flag pole costs about $3,000. There are some shipping and installation costs as well so call it $3,500, all-in.

A couple of years ago someone made a decision to paint the flag pole at Trinity.

Here is the related paperwork for this transaction so you can follow along at home: George Wood_TrinityFlagPole.pdf

In November 2012, G.R.W. Plumbing quoted a price of $3,981.00 and got the job.

Yes, the District agreed to pay more to paint the flag pole then it would cost to buy a brand new flag pole.

That price was based on 24 hours of work (by two workers) at $60.12 an hour to sand/scrape and repair the pole. Another 8 hours to prime the flag pole. 12 hours to paint a finish on the flag pole, 6 hours to clean up afterwards and $975.00 to rent equipment (an Articulating Boom Lift).

50 hours of work at $60.12 to complete the work or $3,006 plus $975.00 for equipment for a total of $3,981.00.

The hourly rate is based on pre-established rates. Each year the Board of Education approves a "blanket" resolution. They rarely discuss the resolution even though the amounts involved run into the millions of dollars.

In this case, the painting rates were established under "PN 4292" which was awarded to G.R.W. Plumbing for Painting.

If you have to ask why a plumber is doing painting then you are not getting into the spirit of things here! The asbestos incident at Davis School involved G.R.W. Plumbing which was fixing the floors even though the District has another contractor called F&L Floorworks. The flooring company does painting! Get it?

PN 4292 LOT NO. V PAINTING WORK established the following rates:

1. Hourly rate PAINTER (Brush) $60.12

2. Hourly rate PAINTER (Spray & Scaffold) $63.12

3. Hourly rate PAINTER (Fire Escape) $63.12

4. Hourly rate PAINTER (Decorator) $63.12

5. Hourly rate PAINTER (Paperhanger/wall coverer) $65.63

6. Rental of scaffolding per Sq. Ft. $13.80

7. Material mark-up above cost (excludes paint) COST + 10 %

G.R.W. Plumbing sent the district Invoice 5637 dated 11/20/12. Notice how the invoice does not reference a Purchase Order Number? It definitely should!

PN 4292 states:

Absolutely no work is to be performed without express authorization in the form of a City School District purchase order.

There is a PO Number for Invoice 5637, PO 92914, but no payment should have been made without indicating the corresponding PO Number.

The original labor was estimated at 2 men each for 12 hours to "sand/scrape and repair" the flag pole. What exactly was "repaired" on a tall metal pole is not indicated but the invoice came in at 2 men each for 15 hours for this portion of the work -- an extra 6 labor hours to the job at $60.12 per hour or an extra $360.72.

G.R.W. Plumbing is claiming they spent 30 hours scraping, sanding and "repairing" the flag pole -- at $60.12 per hour or $1,803.60, essentially two full days of work for two painters.

That is a lot of time spent scraping, sanding and "repairing".

But there is more.

The work to prime the flag pole came in as estimated, 2 men each for 4 hours or 8 hours at $60.12 per hour or $480.96, essentially a half days work for two painters.

The work to finish painting the flag pole was estimated at 2 men each for 8 hours or 16 hours -- an extra 4 labor hours at $60.12 per hour or $240.48 and for a total of $961.92, essentially a full days work for two painters.

The work to Set up and clean up came in as estimated, 2 men each for 3 hours or 6 hours at $60.12 per hour or $360.72, essentially a third of a days work for two painters.

Together, G.R.W. Plumbing charged for 60 hours or almost four days worth of work by a two-man team of painters, charging $4,524.52 or 14% more than the estimate.

This despite the fact that the estimated cost to rent the lift was less than estimated. Purchase Order 92914 contains an estimate of $975.00 but the actual cost was just $740.20 or $234.80.

Much of this "savings" was cancelled about by the cost of paint.

For some reason G.R.W. Plumbing did not account for the cost of paint and painting supplies in their estimate. Oops!

Oddly, G.R.W. Plumbing did not go to a commercial painting supplier but rather Home Depot, where they spent $166.02.

Even more odd, considering the amount of work supposedly involved, G.R.W. Plumbing only purchased 1 gallon of primer and 1 gallon of Stop Rust Gloss paint.

It is not even clear why this receipt was submitted. PN 4292 states:

Should the contractor wish to supply materials for a project, and if requested by the City School District, contractor must submit a detailed proposal and receive PRIOR written approval from the district before supplying such materials.

Further, PN 4292 states:

PAINT will be supplied by the school district; brushes, rollers, trays, tarps, and all other similar support materials to be supplied by the contractor.

G.R.W. Plumbing did not submit a detailed proposal, did not get prior written approval and must supply brushes and similar support materials which are included in the Home Depot receipt.

JLG 600 AJLet's go back to the Lift for a moment. There is a Blakley Equipment invoice that states G.R.W. Plumbing rented the JLG 600 AJ from Blakley Equipment at a total cost of $740.20 (including delivery/pickup).

Invoice 5637 shows G.R.W. Plumbing marked up the cost of renting the Lift and the Delivery cost by 10%.

Note that under PN 4292, there is no provision for G.R.W. Plumbing to rent this type of equipment and therefore nothing about marking up the cost.

I said before that board members rarely ask questions about these "blanket invoices".

The one time a board member did ask a question about these pre-approved pricing deals, former Schools Superintendent Richard Organisciak was asked why the District could not use its own painters. Organisciak responded with an example of a flag pole at Isaac E. Young Middle School needing to be painted. Organisciak said the district did not own the lift equipment necessary to paint so high up as on a flag pole. The board was satisfied with that answer.

As we can now see, however, the painting contractor that got that contract does not own the necessary lift equipment either. The District could have just easily rented a lift as G.R.W. Plumbing and saved a great deal of money by using their own painters to do the work.

Some might ask why it is more important to Quinn/Gallagher that money flow to G.R.W. Plumbing than to their own workers. Even the F.U.S.E. leadership might ask this question as it is their members who are being denied the opportunity to work and possibly earn overtime. The district has four painters on staff. When you realize how much fluff in in these invoices, remember this question.

There is a lot of money left over for G.R.W. Plumbing to keep John Gallagher well-supplied with "coffee"!

And now let's look at one of the more curious aspects of this contract.

As noted above, G.R.W. Plumbing submitted an invoice claiming that the work on the flag pole required a two-man team working for almost four full days, going up down the pole to scrape, sand, prime, paint and clean up.

If that is true, then why did they only rent the lift for one day?

The Blakley Equipment invoice clearly states G.R.W. Plumbing was charged $399.00 for a single day -- the equipment was delivered on 11/12/12 and picked up on 11/13/12.

Whoops!

If G.R.W. Plumbing only had a two-man team painting for one day then the invoice should have been more like 16 hours at $60.12 or $961.92 plus the cost of the lift ($740.20) without any markup plus the Home Depot supplies ($166.02).

That comes out to be $1,868.14.

G.R.W. Plumbing was paid for two invoices a total of $5,005.48

Given this, G.R.W. Plumbing overcharged the District by more than 250%.

Of course, workers are not actually being paid $60.12 but rather Prevailing Wage but there is no paperwork for who actually did this work. It could be done off-the-books by day laborers at $100 per day; so there is room for a great deal of padding in these invoices -- somewhere around $4,000 take out on this one small transaction.

Let's take a look at that second invoice.

TrinityPennants

G.R.W. Plumbing Invoice 5639 is dated 11/20/12. They charged the District $480.96 for "Flag Installation", small pennants attached to telephone poles along the street.

Invoice #5639 also does not reference a Purchase Order Number as it should.

Again, PN 4292 states:

Absolutely no work is to be performed without express authorization in the form of a City School District purchase order.

In this case there is no PO Number; and, hanging the pennant is outside the scope of PO 92914.

Handing the pennants is clearly not "emergency work".

Hanging four pennants on the little hooks attached to the telephone poles supposedly took a two-man team four hours -- an hour a pennant -- at a cost of $480.96.

This would appear to be work that any B & G employee could have done.

Regardless, this work appears to have been tacked on with no apparent justification.

The work is not painting work so it is not only not under the scope of the PO but outside the scope of the PN under which G.R.W. Plumbing works for the District.

PN 4292 states:

Contractor's estimates will be required from all trades for all non-emergency work. Contractors will be required to submit proposals detailing estimated hourly labor, staffing, and material charges if any.

Even if it were allowable, PO 92914 is dated 11/5/12. There would have been plenty of time to go through the proper procedure to expand the scope of work to include the flag installation.

As promised, what we see here is John Gallagher authorizing the work on his own say so -- that is his signature on the invoice -- and financially obligating the District to pay G.R.W. Plumbing an additional $480.96.

PN 4292 describes two permitted roles for John Gallagher.

First, Gallagher (or his designated staff), as Director of Environmental Services can authorize emergency work but with the caveat that "within 24 hours of emergency service, a 'not-to-exceed' written estimate must be provided for the issuance of a district purchase order for all work performed as an emergency".

Second, "all approved work is to be scheduled with Mr. John Gallagher, Director of Environmental Services or his authorized representative".

There is nothing in PN 4292 that permits Gallagher to authorize non-emergency work. Clearly, hanging four pennants on telephone poles is not "emergency work".

Recently, I made a Freedom of Information Law request to obtain a copy of the most recent contract between Aramark (also referred to as "ServiceMaster") and the City School District of New Rochelle. So, far, that request has been constructively denied so I cannot say for sure what is in the new contract or whether it differs but under the contract that existed for over 25 years, Gallagher, along with all other Aramark employees, is considered an Independent Contractor.

Section 11 of the old contract reads:

Except for specific duties and responsibility, described in paragraph 1 above (time sheets, etc.), in which SERVICEMASTER is acting as SCHOOL'S agent, SERVICEMASTER agreed that that in all other respects its relationship to the SCHOOL will be that of an independent contractor, and that it will not act or represent that it is acting as an agent of the SCHOOL or incur any obligation on the part of the SCHOOL without written authority of the SCHOOL.

In my years of trying, I have yet to obtain a copy of any such written authority or see any resolution to that effect that allows John Gallagher to incur any obligation on the part of the City School District of New Rochelle. Even if there is such a document, why?

Accounting experts can, I am sure, find other problems with the paperwork for this transaction but I think this is sufficient to both make the point that there was something seriously wrong with this transaction and that it nicely sets up some of the themes I will be exploring in future articles as we continue through budget season.

This is really just a taste. There are far more questionable transactions involving far larger amounts of money.

In the meantime, next time you drive past Trinity School be sure to admire the $4,500 tax-payer funded paint job on that flag pole! Know that you did your part in funding George Wood's last vacation trip.

UPDATE:

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