Financiers scrutinize legal report on Fairfield Metro mess
Updated 5:10 pm, Thursday, October 27, 2011
The Board of Finance on Wednesday became the latest town body to review the legal analysis by an independent counsel on the approval process used to amend the town's contracts on the Fairfield Metro train station.
Richard Vitarelli, of the McCarter & English law firm, concluded that then-First Selectman Kenneth Flatto needed to secure approval from the finance board and the Representative Town Meeting -- which he did not -- before agreeing to changes that left the town on the hook for any construction cost overruns at the town's third train station.
Finance board members' questions focused on money, specifically the issue of whether the town could recover any of the $7.5 million approved in August to cover those cost overruns.
Vitarelli's report states that it would be difficult to sue either Flatto or former Town Attorney Richard Saxl for damages.
Vice Chairman Robert Bellitto Jr., the GOP candidate for first selectman, said the town relied on an opinion from Saxl that Flatto had the proper authority and further approvals were not necessary for the revised agreements. "The 2010 agreement put the town squarely on the hook," Bellitto said.
Vitarelli said the town received "fair value" for the money spent, whether the board believes the contract was a good one or not, which is one aspect to determining damages. In addition, he said, Flatto's actions were for a public benefit and the financial audit showed he did not receive any financial gain.
Chairman Thomas Flynn said while the town has received assurances from its financial advisors that the Fairfield Metro financial woes should not have an impact on the town's credit rating, but "until it happens, we don't know."
Also brought up by the finance board was the letter Flatto signed that allowed the state, after it allotted $19.1 million to finish off the stalled project, to include its debt service costs on that allocation as an expense for the parking lot. Originally, the town was to receive up to $300,000 a year for 20 years from commuter parking revenues after the state paid operating and maintenance expenses.
"You've got to be careful," Vitarelli said, in light of the fact that the parking revenues may have been a "bargaining chip" in exchange for the $19.1 million. He also pointed out that the state has since agreed to provide up to an additional $3 million toward the $7.5 million cost overruns.
"To go against the state when they're providing additional revenues is a tricky dance," Vitarelli said.
Interim First Selectman Michael Tetreau said that since Vitarelli's report was received on Oct. 3, "We're still digesting some of the comments and feedback."
The Board of Selectmen met Monday in a closed executive session to discuss possible pending litigation regarding the train station project, although it was not revealed what the issue is and no votes were taken.