Letter: Resident Defends 2010 Metro Center Contracts

To the editor:

I have been following the long-running , as a former member of the RTM (and its finance committee), who voted for the project in 2003 after it had been re-negotiated by Mr. Flatto. I have noticed recently a lot of critical coverage and comment on the train station project around the by the law firm McCarter and English. Much of this commentary, and some of the points in the report, concern the costs associated with the project and range from misleading to false.

First, thanks to , the vast bulk of the project cost is being paid for by other parties, not the town and its taxpayers. According to the 2010 agreement, the town has taken over the management of several tasks that were originally to be managed by BRR. But the additional costs for that work, as projected at the time by state and town engineers, are to be fully paid for by BRR’s $5.2 million plus some of the state’s $19.4 million in additional help. And notably, the 2010 agreement SAVED the town over $10 million in increased costs that today’s circumstances would have required under the agreement that the town bodies approved in 2003.

The costs of the project are involved in the law firm’s opinion that the 2010 agreement with the state should have been voted on by the Board of Finance and the RTM. First, I’m not an attorney, but it seems to me that the town’s 2003 approval clearly states that the first selectman was authorized to accept any grants -- in the plural -- without further approval by town bodies. Obviously that authorization was not limited to one particular grant, as the report claims.

Secondly, the report opines that under the town charter, the 2010 agreement needed approval by other town bodies because its provisions were known to be costing the town substantial new money. As far as I can see, this is simply not true, on two counts. For one thing, the town charter provision cited by the report simply didn’t apply to the train station project. I checked with Jean Sturges, a veteran of two charter revision commissions, and she confirmed to me that the charter requirement pertains to the budget process, not to separate projects like this with their own bonding.

Next, even if the provision did apply, all reports in 2010 showed the project would not cost more than the already budgeted town funds and the monies from the state and BRR. Then town attorney approval of the process of the 2010 agreement seems sound, and the fact that he ended up having to resign over the recent faulty report seems to me to amount to a shame and a stain on our town.

As for the future reimbursement of the town’s $6 million cost (as per the 2003 agreement) out of future station parking revenues, my calculation is that in all likelihood, the town will still get its $300,000 a year. The new station lot will have about a third more parking spaces than the current downtown lot, so revenues are likely to top $1.7 million a year (a third more than Fairfield’s downtown station). Each year the state will claim, off the top, parking lot operating expenses which I project at around $400,000 (again, a third more than those on the current downtown station), plus $960,000 to reimburse the state for its $19 million. $1.7 million in revenues minus $13.6 million in state reimbursements, by my arithmetic, leaves enough money for the town to get its yearly $300,000, as in the 2003 agreement.

As for the state’s claim to priority for its $960,000 in reimbursement each year, in my view it is based on the original 2003 agreement; the 2010 side letter on this simply confirmed what the state already had a valid claim to, under the 2003 agreement, and did not amount to a new agreement (as claimed in the recent report) at all. Again, I’m not an attorney, but it seems to me that the plain language of the 2003 agreement specified that out of parking revenues, the state has first claim to reimbursement not only for the lot’s operating costs but also “the expenses for the surface parking area and its improvement.” (Notably, the 2003 agreement’s language about parking area “improvement” costs was simply left out of the law firm’s report!) 

When the state recently stepped in to advance the project substantial new money, these costs seem to me to be plainly covered by the original agreement’s protection of the state regarding its parking area improvement expenses. The 2010 side letter did not introduce anything new. And in a larger sense, the state’s claim seems proper since the up-front costs of revenue-generating projects are normally defrayed by future revenues.

In addition, the lawyers’ report failed to note that the 2010 agreement also made the town around $5 million BETTER OFF because a projected state loan for building a road to the parking lot, for which the town would have had to repay the state under the 2003 agreement, was eliminated when the state agreed to the new $19.4 million advance (essentially folding that $5 million into the state’s $19 million).

What about the newly discovered expenses that have popped up since April, coming to around $5 million, regarding the shoreline remediation that the town is now managing?  From what I can tell, about half of the these new costs do seem to fall to the town as manager of the shoreline work, which includes removal of some tainted soil. But again, these new costs were not foreseeable at the time of the 2010 agreement. The other half seems to be tied to disposal of the tainted soil once it has been removed from the shoreline area, if it is shipped to a landfill.

Here the 2003 agreement is clear; soil disposal costs fall to the owner of the land, which is still BRR (as has been argued by attorney Bisacca). Ultimately the remaining $2-3 million shore remediation cost to the town is more than compensated for by the above-noted removal of the previous $5 million road obligation that the town would have been under (out of future tax revenues from the commercial part of the project) if the obligation hadn’t been eliminated in the 2010 agreement. Again, overall the 2010 agreement resulted in gains to the town, not costs. This is a far cry from the $24 million that the town would have had to pay under Mr. Metsopoulos’s pre-2003 version of the project.

Finally, some commentary has revisited the old issue of Mr. Steinke’s removal from conservation supervision in early 2008. My recollection of the 2004-2007 years is one of successive delays in the town and state permitting process, as Mr. Steinke repeatedly tried to set new requirements and standards that were not in the conservation or governing agreements. Each time he moved the goalposts, the town managers, BRR, and the even the State Department of Environmental Protection had to follow time-consuming procedures before determining Mr. Steinke’s proposals to be without merit. By late 2007, the project was long delayed, costs had escalated, and storm clouds were brewing in the financial markets. BRR was ready to sue the town over the costly delays.

In my view, Mr. Flatto had little choice but to work with the Conservation Commission to substitute a respected private environmental firm to oversee the project, instead of Mr. Steinke. The project then got moving again. But amid the late 2008 financial crisis, bank credit froze up for small businesses, BRR lost its financing, and the project hit the wall. Had the unnecessary delays not occurred, BRR’s work would have been paid for on budget by BRR and their bank, and the overall project would have been completed well before the 2008 financial crisis deprived BRR of its financing. Mr. Steinke may not have got the course of the river going the way he wanted, but sadly he need not lament that he has had no impact on the train station project.  

Alan G. Smith