Who will oversee first steps of Beaufort Co.’s $345M school construction projects?
Weeks after a $345 million school bond referendum passed in a landslide, Beaufort County school board members are discussing two issues that affect the public’s trust in how the money is spent.
Their questions: How to select members of the citizens oversight group promised by the school district to ensure spending accountability, and whether to continue to work with a bond attorney who also worked with Berkeley County during an embezzlement scandal that came to a head in 2017.
The attorney advising the district on the bond issues stands to make hundreds of thousands of dollars in commission from the referendum.
In the district’s most recent successful referendum, in 2008, the bond adviser’s firm netted $304,000 in fees from issuing bonds. At $163 million, that referendum was a little less than half the size of the one that passed earlier this month.
The Nov. 5 vote was a near-complete reversal from the district’s previous attempt at passing a bond referendum 18 months ago, with 86 of 92 precincts approving both questions of the referendum, the district’s largest success at the polls in at least 30 years.
According to many supporters, new superintendent Frank Rodriguez’s communication with voters — and promise of an oversight committee to monitor spending of the money after the bond issue passed — was key to the 70 percent “yes” vote.
Last week, board members agreed in a 10-1 vote that the new oversight committee would be small, skill-focused, and handpicked by Rodriguez, who said he’s looking for members with “high level” experience in construction, project management and finance.
Rodriguez will have complete authority over the committee selection, and has said the committee’s minutes, presentations and meeting materials will be posted online.
Board secretary William Smith was the lone “no” vote, saying he wanted a committee that included members of every part of the school district. Board member John Dowling disagreed. “Two words matter,” he said. “Skill set.”
At last week’s meeting, the board did not select an attorney to oversee the bond issue. Without one, the district can’t begin getting voter-approved construction funds, and which could have caused delays to the referendum’s first projects at Bluffton’s overcrowded May River High School and River Ridge Academy.
Instead, the board voted to use up to $8 million borrowed against expected tax revenue to cover the next three months of bond referendum spending and avoid slowing down construction, something Bluffton representative Rachel Wisnefski advocated for.
“People are looking to us for guidance and to follow through on what we said we’re going to do,” Wisnefski said last week. “We are a new board, and I think we need to show them we will make good on our promises.”
Members were wary of again hiring Frannie Heizer, a partner at Burr & Forman who has worked with the school district for the past 20 years in previous bond sales and later in bond refinancings. Heizer and her firm are named in a lawsuit stemming from an FBI investigation into embezzlement at the Berkeley County School District in 2017.
That district’s chief financial officer, Brantley Thomas, pleaded guilty early this year to 35 charges of public corruption, stealing nearly $1.3 million from the district over 16 years and resulting in an 11-year prison sentence.
Heizer was named in a lawsuit filed in March by the Berkeley school district’s lawyer, asking for $50 million from the lawyers and firms giving the district financial advice. The lawsuit claims Heizer did not alert the school district after learning Thomas had overspent on a $100 million bond issuance in 2012 that was part of a school bond referendum.
On Monday, Heizer, who said she represents about 45 of the state’s school districts in bond issues and refinancing, answered interview questions posed Friday by the Island Packet and the Beaufort Gazette about the lawsuit.
“Unless specifically engaged for such purposes, bond counsel does not monitor, identify, evaluate or report cost overruns in a capital building program,” she wrote in response. “Bond counsel generally does not have access to all necessary information regarding the expenditure of bond proceeds that would be required to do so.”
For several months, critics of the Beaufort County district’s financial oversight — board members and others — have objected to rehiring Heizer in emails and public comments.
“The optics are not good to keep Ms. Heizer as bond counsel,” CARE founder Richard Bisi wrote in an Oct. 30 email to the board. “It’s common sense. Why would you subject yourself and the district to the criticism?”
Heizer told the board last week that she is “confident I personally will be vindicated.”
This story was originally published November 26, 2019 at 1:19 PM.