The O'Malley administration backed away yesterday from its plan to take control of city money used for school construction, saying it reached an agreement with school officials that will give it more oversight of how such dollars are spent.
The agreement calls for two city employees to help the school system manage renovation and construction projects. The city will also devote two of its weekly meetings with senior school staff every month to monitoring capital projects.
School officials had opposed the city taking over about $90 million in city bond money approved for school construction. But they said they could live with the new agreement.
"We'll just tack this on" to other oversight roles the city has over the system's operations, said schools chief Bonnie S. Copeland.
Last month, the Board of Estimates approved Mayor Martin O'Malley's proposed $2.3 billion budget with a caveat - that the city's Department of Public Works take over management of some city bond money from Copeland's administration.
The board was following recommendations by city planners, who criticized the system after learning of $97 million in approved construction money that apparently had gone unspent. School officials later said most of the money has been earmarked for projects in their early stages.
O'Malley's foray into the management of school construction money is part of his recent efforts to reassert City Hall's authority over schools, which are partially overseen by the state.
Last year, the mayor bailed the schools out of a cash-flow crisis with a $42 million loan. Since then, his staff has monitored how the system spends its operating funds.
In exchange for permitting the system to retain control over construction money it receives from the city, O'Malley staffers will oversee how that money is spent.
"The same way we constantly monitor their operating money, we'll now be monitoring their capital money," said City Council President Sheila Dixon.
Otis Rolley III, the city's planning director, wrote a memo to Dixon on Tuesday recommending that the city give school officials a chance to improve their handling of construction projects. He said officials gave satisfactory explanations for many of the Planning Commission's concerns about unspent funds.
Rolley said yesterday that the city is not giving up authority by backing away from its threat to take control of construction money. "We're going to be making sure the dollars are spent, and spent appropriately," Rolley said.
His memo was delivered the day the school board appointed Deputy Housing Commissioner Eric T. Letsinger as its chief operating officer. Letsinger will oversee the financing and execution of school construction.