'Secret letter' on Fairfield Metro revenue stuns selectmen
Updated 5:43 pm, Thursday, January 5, 2012
The revelation Wednesday that state officials have a letter falsely stating that Fairfield boards knew about a change in the pact for the Fairfield Metro railroad station guaranteeing that commuter parking revenues would first reimburse the state's $19.4 million debt on the project, instead of the town, was met with "stunned silence," according to First Selectman Michael Tetreau.
Tetreau said town and state officials were working out final details of a $3 million grant from the state to help defray the $7.5 million in construction cost overruns for the town's third train station on Nov. 28 when state officials produced a letter, dated July 15, 2010, and signed by former Town Attorney Richard Saxl, that ensured the state debt would be paid before the town could collect any parking fees at the station.
Richard Vitarelli, independent counsel hired by the town to look into changes negotiated by then-First Selectman Kenneth Flatto to the original 2003 contracts for the project, said that letter was required by the state, and was known only to Flatto and his Town Attorney Richard Saxl. He reviewed his investigation at Wednesday's Board of Selectmen meeting.
The letter provided to the state by Saxl indicated that the binding letter of agreement letting the state deduct its $19.4 million debt service for the station project from parking revenues was enforceable and, he wrote, had been explained to the Representative Town Meeting at its meeting on May 25, 2010.
Though it was indicated in the letter that copies of the amended agreement were provided to then-Selectmen Sherri Steeneck and James Walsh, they were never given copies. It also was not turned over to Vitarelli's law firm or included in a 4-inch-thick binder of train station documents and contracts for his investigation.
Flatto told Vitarelli that he and Saxl agreed that because the letter was inaccurate in regard to the RTM's notification -- that did not happen -- they would not distribute it to anyone. Flatto said it was because Saxl knew the letter would "raise questions," while Saxl said the state's attorney required the language be included, but has since acknowledged that he erred in his statement in the July 15 letter.
Despite knowing that the July 15 letter was incorrect, neither Saxl nor Flatto contacted the state later to correct it. According to Vitarelli's report, Flatto said he offered to call the state Department of Transportation commissioner, but never did. Saxl said since he believed his overall conclusion that the binding letter was enforceable, it wasn't necessary. Saxl also told the investigator that Flatto never asked him to correct the letter.
However, both he and Flatto contend that Flatto had the authority to enter into all the agreements on the railroad station project on behalf of the town. And according to the report, the July 15 letter was not included in the documents because Saxl "forgot" about it.
"The ends don't justify the means," Walsh said at Wednesday's meeting. "I think the station is great ... Just because the ends were a great thing does not give people the ability to avoid the charter, keep documents private ... That's a huge problem for me."
After 2010, Walsh said "there was no transparency" on the Fairfield Metro project. "The public deserves better," he added.
Tetreau said town officials might have disagreed over the changes to the allocation of the parking revenue, "but if you don't show us the agreement, we can't disagree. It's the hiding and the secrecy surrounding all this ... I can't believe two top leaders in this town say they won't disclose it because it might generate questions."
If Flatto and Saxl believed that Flatto had the authority to do what he did, Tetreau asked, why keep quiet about the letter. He also questioned how they would they made a misrepresentation in the letter to the state, and expressed concern about the damage it this has caused to the town's reputation.
"This is not the third grade," Tetreau said. "You can't say, `I forgot to do it.' " Even though the binding letter on the parking revenue was not approved by any board, Vitarelli said it would be next to impossible to void it. He said the state has shown that it did its due diligence and relied on the letter from Saxl that all approvals were in place.
In a statement issued Thursday to the Fairfield Citizen, Flatto said, "I am so appreciative of all the warm comments from residents grateful for the train project, so it is hard to dwell on one aspect of a complex issue which is distorting the highly successful negotiations which saved Fairfield taxpayers over $10 million in costs and got the Fairfield Metro project rescued.
"We simultaneously also gained $5 million in future town revenue, more than offsetting any possible future $300,000 parking revenue shortfalls since the town is no longer repaying the state for roadwork costs, so that should count too. I wish all the information about cost savings was equally presented so people had the full story, but I acknowledge I somehow should have explained all this better in 2010 during those hectic times," Flatto wrote. "Our efforts were solely intended to help the town."
As for recouping any money from either Saxl or Flatto, Vitarelli said Wednesday that, too, would be difficult, not to mention costly litigation.
"Which essentially leaves us with we are where we are," Selectman Cristin McCarthy Vahey said, with a train station open, but important lessons learned from the mistakes that were made. "At this point, I'm looking at what's our goal going forward from here."
All three selectmen agreed the investigation into the train station cost overruns was necessary to ensure that all information about the issues was made public.