Round I: RTM reviews $7.5M Fairfield Metro gap money; votes tonight
Published 7:20 am, Wednesday, August 31, 2011
In what may be the next-to-last-stop in a high-speed town government review of the multi-million-dollar gap in the Fairfield Metro railroad station's construction budget, the Representative Town Meeting committees on Tuesday scrutinized the many reports and questions posed about the overruns since the shortfall was first revealed in June.
Following that RTM session, classified as a "committee of the whole" legislative body, the body is poised to vote Wednesday on the $7.5 million bonding request officials say is needed to complete the town's third railroad station. The meeting gets under way at 8 p.m. at the Board of Education offices on Kings Highway.
Questions ranged from whether private developer Kurt Wittek's recently revealed offer of $3 million is for real to whether the town has any legal recourse against the firms that provided cost estimates for the project that, in some cases, were highly inaccurate.
The town, state Department of Transportation and Blackrock Realty entered into an agreement to build the station on 8 acres of former industrial land originally owned by the private developer. When Blackrock went into foreclosure and the project stalled, the state contributed $19.1 million, with the understanding -- under an amended pact negotiated by then-First Selectman Kenneth Flatto -- that the town would manage the project and be responsible for any construction cost overruns.
The state recently pledged up to another $3 million to complete the station's access road and parking lot in order to complete the station by Oct. 31. An email from Wittek, the principal in Blackrock, to RTM members Monday, states that he would be willing to put contaminated soil on his property where an underground parking garage was to go, saving the town about $2 million in soil removal costs, and also contribute $1 million in cash outright. But that would be contingent on the state agreeing to give Blackrock air rights to build a parking deck over the commuter lot.
Interim First Selectman Michael Tetreau, who revealed the cost overruns shortly after taking office, said Blackrock made that proposal six months ago, but the state has yet to agree. Adding that he is loathe to negotiate in public, Tetreau said Wittek is holding the town hostage since it has no control over whether the state gives Wittek air rights.
After hearing the audit report on the Fairfield Metro project, which found no malfeasance but did find the project sorely lacked oversight, RTM Majority Leader James Millington said, "This report is shocking and absolutely disgusting. The lack of complete failure here that has all been basically dumped on the shoulders of Ken Flatto ... this has been a failure of the entire administration."
He asked if anyone else involved in the project's management has left the town's employment and was told no. Flatto resigned in May to take a job in Gov. Dannel Malloy's administration.
"I shake my head at this," Millington said. "We continue moving forward because its all Ken Flatto's fault. It's like Bernie Madoff left the firm, so the firm will continue on, it's disgusting."
Timothy Fisher, a lawyer hired by Tetreau to investigate the project's problems, said in response to RTM members' questions that he does not believe the town would forfeit any right to go after damages from other parties if it authorizes the additional bonding, nor does he believe a letter that says the DOT can recoup debt service monies from parking revenues at the station could be voided.
Under the original agreement, the town was to have received up to $300,000 a year after the state subtracted its operating expenses for the commuter lot from parking fees. But after the $19.1 million cash infusion, a letter was signed by Flatto that specified the debt service for the $19.1 million is considered an operating expense, making it unlikely the town any time soon will receive the annual payment that was designed to reimburse the $6 million the town originally bonded for the project.
Selectman James Walsh called that letter a secret agreement that other elected town officials were never made aware of.
"It appears the DOT reasonably believed the first selectman had the authority to speak on behalf of the town," Fisher said, and it is likely the letter would be seen as a clarification of the revised contract.