Editorial / Review of financial train wreck worth the money
Published 4:45 pm, Thursday, August 11, 2011
The Representative town meeting at the end of the month will face what arguably will be its most distasteful task of the year -- setting aside the money to pay an estimated $2 million to $6 million cost overrun on the new train station near the Bridgeport border.
And the project's complexities are head-spinning.
The Metro Center Station mess has enough numbers to fry spreadsheet software, enough soil-pollution ratios to confound a chemist, and enough political intrigue to keep town hall gadflies buzzing for the rest of the decade.
So RTM this week appropriately approved formation of a five-member, bipartisan committee of its members to do the detailed homework necessary for the local legislature to make an informed decision on funding.
It is one of several prudent and crucial steps the town has taken after the cost-overrun bomb -- attributed to unanticipated soil contamination -- exploded two months ago.
Those steps include hiring an outside auditor to explain how the project in just one month could go from purportedly under budget to profoundly underfunded; appointment of an on-site project manager to monitor project completion; and hiring of a specialized legal team to analyze contracts and adherence to municipal law.
The independent auditor -- Kostin Ruffkess & Co. of Farmington -- will be paid up to $35,000 to review the financial and contractual components of the train station project from its inception. The firm planned a comprehensive audit to determine the flow of funds and the project's adherence to contracts and bonding resolutions. Its report is due Aug. 22.
The firm has worked for the town before, including an audit of a federal grant for the train station project.
Questions were quite justifiably raised about hiring an auditor with ties to the town and relationships with town officials. Total independence and total objectivity surely would be preferable.
The tradeoff, presumably, is that Kostin Ruffkess is familiar with the project and thus may finish the job more quickly and at a lower cost than a more objective auditor that would require significant time to get up to speed. Still a second appropriation to supplement an original $20,000 has been needed.
The project manager, Bud Barton of Greenwich, will be paid $15,000 a month to track the work daily and guard the town's interests. With more than 40 years experience as a construction and project manager in the public and private sectors, his credentials seem up to the task.
One of the town's most serious mistakes was not having its own person on site from the start of construction. Some have questioned the wisdom of spending $15,000 a month to oversee a project that nearly is completed. But with a $4 million gap between low and high estimates of what the town will owe, it is an absolutely critical time to know exactly what the back hoes and bucket loaders are digging up.
The legal review, too, is essential. And the critical need for a painstakingly thorough examination justifies bringing in not one but two outside specialists from a big law firm to look at the project from two separate and crucial angles.
Their employer -- McCarter & English -- has offices in New York City, Stamford, Hartford and Boston, staffed by a corps of 400 lawyers. The firm has never worked for the town, ensuring greater independence.
A specialist in construction law and contracts will be paid $475 an hour to examine the three-party contract between the town, state and developer. Another will be paid $400 an hour to analyze municipal law issues.
Those are high hourly price tags, and the paperwork to be examined is voluminous. But the stakes are so high and the questions so complex that to have less than a thorough analysis by top experts would be pennywise and pound foolish -- even derelict.
Complex legal issues include: a contract between three parties -- the town, the state and a private developer; foreclosure proceedings on the developer's portion of the land; a citizens' lawsuit over environmental concerns; the former first selectman negotiating letters of agreement that altered contract terms and the role of the town attorney -- among others concerns.
Getting a fully independent legal assessment is worth it. Moreover, if the analysis identifies potential claims the town could file to recoup some of its money, the legal review could prove a bargain in the long run.
Ultimately, the cost overruns will be dumped on the doorsteps of taxpayers -- many of whom complain they barely can afford to remain in town because of rising property taxes, many of whom may rarely ride Metro-North and perhaps never will use the station.
Taxpayers deserve to know: exactly what happened; why it happened; whether specific individuals are to blame; and whether the town has any after-the-fact legal remedies.
Paying smart, well-qualified professionals to provide those answers is worth the money.