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Software-Gate in Methuen
School Department Wasting Taxpayers Money
Methuen City Councilor Joe Leone
09/01/06
 Don’t let the title fool
you. This isn’t nearly as interesting or
long-lasting as the real Watergate, but here in Methuen,
it’s just as important. My first term as
Methuen’s city councilor for the East District
started just 8 months ago. The primary focus of my
successful campaign was that Methuen deserved
representation that had respect for the taxpayers’
dollars. That’s it, very simple; I expect
every elected official, every appointed official, and
every employee, to treat the taxpayers’ dollars like
they treat their own dollars.
One of the first tasks I took on after the inauguration
was a thorough analysis of the city general government
and school department finances. How much do we
tax? How much do we spend? How much do we
waste? Why should I, a city councilor, have any
interest in the school department’s finances?
Simply because the school department budget is an
appropriation, and the Commonwealth of Massachusetts
makes appropriating taxpayers’ money the exclusive
duty of the mayor and City Council. Yes, the school
department has broad discretion when it comes to spending
the money it gets, but the bottom line is that it’s
still taxpayers’ money, and it’s given to them
by the City Council. I am bound by my oath of
office to keep a keen eye on what happens to it.
In early June, I attended my first budget workshop, and
it was with the school department administration, who
chose to take the time we had allotted to them to berate
the mayor and past city councils for “shortchanging”
the school system, rather than being proactive. Of
course, I already knew that the school department had a
sizeable surplus of funds, a tidy little nest egg of over
$2 million, and that the money was already being shuffled
around their various accounts so it wouldn’t attract
too much attention. It was a little like watching a
game of “Whack-A-Mole” using millions of
dollars as the mole. It’s a little difficult
to explain a surplus of $1 million in the salary account
with only 10 days of school remaining, all the while
complaining about a shortage of teachers. The
flurry of activity to transfer funds was blamed,
eventually, on antiquated accounting software.
Now here’s the interesting part. I heard that
the school department wanted to buy new software for
their accounting department to the tune of $130,000, plus
whatever it would cost to implement the system and
maintain it. I heard figures of $100,000 for
hardware upgrades and maybe a full-time staffer to
maintain the system after installation. We could really
be talking about $500,000 over a 5-year period, so this
is no small matter to consider. I asked our own
finance department if our existing, city-side software
was usable by the school department. Could it
handle the demands of the Department of Education
reporting requirements? Could it mesh seamlessly
with the school department’s current
application? Were we licensed to allow another
department to use the software without further payment to
the publisher? The answer in all three cases was an
emphatic “YES!” So now we have a chance
to save the schools $130,000, at a minimum, and perhaps
much more over the coming years. I proposed
legislation directing the mayor and superintendent, with
the permission of the School Committee, to study and
issue a report on the feasibility of merging some of the
functions of the two finance departments. This
consolidation could run all the way from just sharing our
already-paid-for software to a full consolidation of
staff and facilities.
I never expected, and still don’t understand, the
reaction of the school administration to my
proposal. I was told, publicly and in no uncertain
terms, that I “shouldn’t be playing in another
person’s sandbox.” Really? I didn’t
know that the school department had its own special
sandbox. I know the City Council doesn’t have
one. Actually, I’m pretty sure the sandbox
belongs to the taxpayers of Methuen and we should all
learn to play in it together. As soon as my intent was
generally known, around June 20th, Superintendent
Littlefield swung into action. On June 28th, on one
of his last days as a Methuen employee, he executed a
purchase order for $129,000 for the software. I
guess he figured if the software was bought, I’d
have to back off in my quest to find some efficiencies to
save the taxpayers some money. Remember the “surplus”
I mentioned earlier? Somehow, $130,000 found its
way into an account for software purchasing. An
account that was never funded in the budget, and that had
no appropriation as required by our state’s
laws. Yes, I guess the superintendent can transfer
funds between accounts, but only the School Committee can
make appropriations to previously unfunded
accounts.
There was no competitive bidding process for this large
purchase, either. It was bought under the cover of
a state contract that bears more relevance to purchasing
100 copies of Microsoft Office or Norton Antivirus than
it does to purchasing sophisticated, customized
accounting software. We pay people in the
superintendent’s office a great deal of money to
perform the investigation and conduct the bid process to
get us the best bang for your bucks. How can they
go out and spend $130,000 without a formal bid
process? Finally, the administration signed a
contract that was never brought to the School Committee
for approval. As a matter of fact, NO School
Committee has ever taken formal action to make this large
an outlay of taxpayer money.
So, we have a purchase, a sizeable one at that, for which
there was NO appropriation, NO action by the School
Committee, NO competitive bidding, and it all happened in
48 hours just as my legislation was being proposed to the
City Council. By the way, the software vendor’s
proposal was dated June 30, the last day of the fiscal
year and fully two days after the issuance of the
purchase order. One would think the proposal should
be received and studied for a bit before the
administration says “I’ll Take It!”
In my opinion, the former superintendent’s lame-duck
rush to buy this software was an attempt to cloud the
entire issue of consolidating some or all of the
redundant operations of the city and schools.
Things like trash pickup, vehicle maintenance, human
resources, building maintenance and finance. All of these
functions are now duplicated by both sides and are
wasting millions of dollars. The school department’s
public protest has been on two fronts. First, they
say, jobs would be lost. Yes, eventually, that
would happen. But during the transition period
there will be a need for all hands to remain “on
deck.” Gradually, attrition and voluntary
transfers will allow us to realize the saving we seek, so
the claim of jobs being lost, while true in the long
term, applies to future hiring, not layoffs of current
employees. The school department also claims that
the “financial independence” given to them by
Chapter 70 would be compromised by any type of
consolidation. They have “independence”
confused with “invisibility.” The City
Council and city administration know full well that the
School Committee has the ultimate authority over school
spending. All the City Council does is take the
money out of the taxpayers’ pockets and send it to
the school department. So, yes, the school
department has independence to spend its money as it sees
fit, but the City Council has the ultimate obligation to
make sure it’s all done in full view of the public
(remember the $2 million surplus that no one knew
about?). Any measure of cooperation between the
schools and city that saves the taxpayers a few bucks
shouldn’t even be open to debate. The School
Committee is open to exploration, as evidenced by
Vice-Chairman Ian Gosselin’s remarks. He feels
that many areas can and should be looked at. I’m
sure the members of the committee didn’t know all
these maneuvers were being made behind their backs, and I’m
just as sure they feel as victimized as I do by this
whole affair.
The bottom line is that we are not spending our own money
here. The City Council and the School Committee
have an obligation to find ways to make government more
efficient without infringing upon each other’s
authority. We also have a duty to know what’s
going on within our own administrations. The School
Committee was not served well in this instance.
They had a right to know before the superintendent signed
a contract for $130,000, sidestepping the bid laws and
municipal finance laws in the process. The City
Council has a cap of $50,000 on contracts signed by the
mayor, and any contract over that amount must be approved
by the City Council. If the School Committee has no
such cap on the superintendent’s contract authority,
it should consider one to prevent this type of abuse in
the future.
I can not think of a $140 million dollar per year company
(yes, $140 million when grants and revolving funds are
included) that has a major division responsible for half
of its expenses, that has separate bookkeepers, separate
snow removal, separate everything. I was chastised
for wanting to play in the school department’s
sandbox, and I was told to stay in my own sandbox.
What I think we should be saying is that if we all play
together in one sandbox, we’ll need a hell of a lot
less sand.
Joseph Leone is in his first term as a
Methuen City Councilor, he was elected last year to
represent the East End of Methuen. YOu can reach him via
e-mail at joseph.leone@comcast.net
*Send your questions comments to ValleyPatriot@aol.com
The September, 2006
Edition of the Valley Patriot
The Valley Patriot is a Monthly
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All Contents (C) 2006, Valley Patriot, Inc.
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