Budget Committee Grills SDA Head on Spending — and Hiring and Firing

Embattled executive director of Schools Development Authority defers answering most questions, saying situation is under review by counsel

Lizette Delgado-Polanco, former CEO of the Schools Development Authority
The annual hearings on state spending for public education are invariably highlights of the Legislature’s budget season — understandably so, given that school aid and other costs make up more than a third of New Jersey’s annual spending plan.

But yesterday’s hearing before the Assembly budget committee took things up a notch, with a usually silent partner to the state’s education commissioner sharing if not dominating the spotlight.

And it was hardly a flattering light for Lizette Delgado-Polanco, the embattled executive director of the Schools Development Authority. She was making her first appearance before the Legislature since disclosures of alleged patronage and other hiring malfeasance at the SDA.

Delgado-Polanco drew pointed questions — and issued more than a few denials and “no comments” — over her organization and how it does business overseeing tens if not hundreds of millions of dollars’ worth of school construction projects each year.

SDA future uncertain

How and if she survives is yet to be seen, with lawmakers saying the future of the SDA remains an open question.

From the start, Delgado-Polanco appeared intent on pushing the SDA beyond its current incarnation, after nearly two decades as one of the most aggressive school construction programs in the nation.

After borrowing more than $12 billion to build new schools in scores of communities — especially the state’s neediest districts — the authority is finishing the last of those projects and down to $60 million left for emergency repairs.

“The SDA must do more to overcome the conditions and overcrowding in these districts,” she said in her opening remarks, describing some schools older than 150 years.

Delgado-Polanco said that after the final 18 projects are completed over the next six years, there will be “no additional money” for new undertakings.

But for all the concern that caused in legislators, they were more intent on asking Delgado-Polanco about her moves to restructure the SDA and accusations that it had become a patronage mill under her watch.

Tense exchange

The following exchange summed up the tension:

“When you fired the staff, were they fired because they weren’t qualified to meet your mission or did they not fit into your new plan? Why were they fired, can you tell us that?” asked Assemblywoman Nancy Munoz (R-Union).

Delgado Polanco responded: “I can talk to you about the overall, and the idea behind the restructuring, but I can’t talk to you about individuals and people that were terminated because that is under review by counsel, and I apologize,” Delgado-Polanco said.

Munoz continued: “Multiple reports have been written about the lack of experience and qualifications of many of your employees, and this is a significant question for us as a budget committee because we’re talking about a $29.2 million budget, which is an 11 percent increase from 2018 to 2019. So these questions need to be asked and we need to have answers, please.”

“But they appear to have a clear connection to you as family, as friends, as former colleagues, and we’re going to give you the benefit of a doubt that it wasn’t pure nepotism, but why were certain people hired who clearly weren’t prepared for the SDA positions?” Munoz said.

Delgado-Polanco: “Again, this is a matter that’s under review by counsel and I cannot discuss it at this moment. I apologize.”

Policy on nepotism

Later on, Munoz asked if the SDA had a nepotism policy.

“We have in our employee handbook, yes, there is a nepotism policy, and we also follow the state’s ethics policy on nepotism,” answered Delgado-Polanco.

Munoz: “So you follow that policy?”

Delgado-Polanco: “Yes.”

It was not the only testy exchange. State Assemblyman John Burzichelli (D-Gloucester) pressed from a different angle, asking a host of questions around the SDA’s $19 million operating budget and whether it was warranted as the authority wound down its spending.

Among his queries was how the operating budget was paid out of school construction bonds, basically borrowing funds to pay the daily bills.

“We’re essentially paying overhead out of borrowed money that we’re going to take 30 years to pay back?” Burzichelli asked.

“That seems, awkward doesn’t it?” he continued. “The question becomes, are we best serving our taxpayers by borrowing money over a 30-year period to make that kind of payment.”

State Assemblywoman Eliana Pintor Marin (D-Essex), chair of the budget committee, spoke to reporters afterward about whether the SDA needed its own reforms in light of all the questions.

“Whether it’s a restructuring within the SDA or whether a new entity underneath the EDA (Economic Development Authority),” she said, “those are all fair questions.”

John Reitmeyer contributed to this story.