SAN JOSE — The Alum Rock Union School District board on Thursday beat back another attempt to cut ties with its controversial construction manager and instead stood firmly by Del Terra Real Estate, which is in line to reap tens of millions of dollars for overseeing construction in the East San Jose district.
“I haven’t seen any factual evidence of any fraud,” board President Khanh Tran said. “If Del Terra was wrong I would be the first to penalize them.”
Two months ago, a scathing state audit warned that the district’s relationship with its construction manager placed it at risk of fraud and misspending. The Santa Clara County District Attorney’s office also is investigating, and two credit agencies have signalled they intend to downgrade the district’s rating because of issues raised in the audit.
On Thursday trustee Andres Quintero failed to muster any support for dissolving its agreements with the Southern California-based Del Terra, which holds three contracts to oversee $265 million in construction financed by bonds voters approved in 2012 and 2016.
“We’ve been involved in audit after audit as a result of the actions of this organization,” Quintero said. “If you’re paying somebody millions of dollars you should expect you’re not going to have any problems.”
He pointed out that Del Terra has refused to cooperate — with state auditors, other investigators and the district’s own staff and attorneys.
“We had to bring in our own attorney requesting all the documentation we were already supposed to have,” he said.
Del Terra CEO Luis Rojas has insisted in the past that his firm has indeed responded to requests for documents.
Tran was joined by trustees Esau Herrera and Dolores Marquez in backing Del Terra. Trustee Karen Martinez was absent.
Angry parents, who strategized during the mid-meeting 1½-hour recess while the board retreated to a closed session, urged that the firm be dumped.
“Spending more money for lawyers to protect Del Terra is not a solution. Keeping Del Terra is not a solution,” said parent Natalie Abal. I urge and hope you will terminate the contracts.”
The board also rebuffed other changes that parents and community members urged. It extended for six months contracts with its two attorneys, despite the state audit recommending the district get new legal counsel. It OK’d a three-year contract with auditors who the district’s bond oversight committee complained have been provided poor oversight. And it appeared reluctant to reshape the gatekeeper committee that prioritizes bond-construction projects.
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