Former VP hid, dumped millions Alioto spent down funds, cut classes

Recently departed Southwestern College Vice President Nick Alioto ordered Fiscal Services and other college departments to quickly spend millions of dollars rather than restoring 429 classes that were cut last year by Alioto and former superintendent Dr. Raj K. Chopra. Alioto's former top aide said he spent the money unnecessarily rather than admit he had been wrong in projecting the 2009-10 college budget.

Former SWC comptroller Laura Sales recently revealed that Alioto ordered some campus officials to spend down the funds to hide exactly how much money the college had. This was the same year that 429 class sections were cut from the budget to save money.

"Mr. Alioto told some departments to spend as much money as they could, including this one," said Sales, who retired last year, but still occasionally works in the Fiscal department. "But this department didn't have anything to spend on."

One of the departments that did spend extra was Computer Systems Services (CSS). As detailed in budget documents obtained by the Sun via the federal Freedom of Information Act, CSS spent in excess of $2 million more than it was budgeted for during fiscal year 2009-10.

Alioto dumped money, Sales said, by purchasing hundreds of computers the governing board had only authorized the district to lease.

Sales said that Alioto did this because former faculty union president Philip Lopez had stated at college governing board meetings that Southwestern had enough money making class cuts unnecessary.

"Mr. Alioto spent all that money because he didn't want to admit that Phil Lopez was right," said Sales.

Lopez said he was upset by the finding and that personalities should not have been part of the budget process.

"If Nick Alioto's ego was at stake and he needed to try to prove me wrong, that's pathetic, absolutely pathetic," Lopez said. "We are an educational institution and our charge is to use taxpayer dollars to teach students, not to build up a huge bloated reserve or try to spend it down."

In the fall of 2009 the SWC Governing Board approved the budget presented by Chopra that included 429 class sections cut from the schedule in order to save money during what Chopra referred to as a time of "fiscal crisis." Lopez said at that time there was no fiscal crisis.

"From the very beginning, our position was that we had plenty of money in the bank and these class cuts were unnecessary," he said.

Lopez, who frequently clashed with the administration regarding the budget, said the $2 million was more than enough to fund the 429 classes cut by Chopra from the 2009-10 schedule.

"One thing we know for sure is that Nick Alioto told the board that cutting 400-plus class sections would save us somewhere between $1.3 and $1.7 million," he said. "We know that, even though that's a suspiciously broad range. But another thing we know absolutely is that at the end of FY 2009-2010, we had a surplus of around half a million dollars. We would have had $2 million more had the decision not been made to spend this money. It looks to me that if we had not bought these computers and not cut classes, we would have ended up with a million dollars in the bank more than we did."

The computers purchased were all part of a plan initially approved by the governing board in May 2009, titled Resolution Number 1616. A computer-replacement plan was a systematic process to change out older computers on campus with new ones. CSS Supervisor Paul Norris said that, up until that point, computer replacement at SWC was haphazard.

"If a school had money, they would replace the ones in the labs," said Norris. "If they didn't, they didn't."

Norris said replacing old computers was a necessity, but purchasing new ones was not. He said the board-approved plan was not to buy the computers, but to lease them.

"We'd be getting about 800 new machines every year, about 25 percent of everything we have," he said. "All the machines came with four-year warranties. If we needed a hard drive or a video card, they'd just send it to us and we'd put it in. We wouldn't have to send out the machines unless it needed a motherboard."

Besides the warranty support, Norris said leasing meant the district would not have to dispose of or find a way to store the computers once they were no longer in use.

"After the four-year lease ended, we'd send the old machines back to Southland Technologies," he said. "Then we'd get new replacement machines. This way we'd get new equipment every year."

Chopra signed two separate lease agreements on August 24, 2009, committing to a combined first-year payment of $199,526.48.

Gail Stockin, professor of business and information systems, said that leasing was the most effective way to spend the school's technology money.

"Instead of purchasing, we need to lease to maximize the dollars," she said. "It's more efficient since we can replace the computers at a faster pace. Technology is already obsolete by the time we receive it."

Professor of Business and Information Systems Frank Paiano said that leasing, in general costs more over the long term, but it can vary.

"If you plan on getting a new computer every few years, as opposed to hanging on to it, then leasing is not going to be appreciably more expensive than buying," Paiano said. "But there are other factors at work. Two, three, four years from the time you buy it, it's become an expensive paperweight. The cost and problem of getting rid of it becomes a major headache for an institution as large as we are. Computers depreciate very, very quickly."

During the spring of 2010 Alioto spent more than $1.4 million on Apple, Dell and Hewlett-Packard computers, as well as servers and infrastructural equipment from Southland Technologies, according to district purchasing records obtained by the Sun through the Freedom of Information Act after Alioto's resignation.