RTM, Selectman Outraged Over Metro Center Deficit, Lost Revenue

Town officials - Republicans and Democrats alike - said they were kept in the dark about cost overruns on the Fairfield Metro Center project until First Selectman Michael Tetreau delved into the true status of the project after taking office 17 days ago.

"I'm really shocked at the size of this overrun," Richard Santalesa, a District 3 member of the Representative Town Meeting, said after Tetreau gave a Metro Center update Monday night to the RTM in which he said the project was overbudget by $2.4 million to $6.4 million and that Fairfield taxpayers, under an agreement signed in April 2010, were liable for the deficit.

"Why couldn't we have some inkling that there could be a problem?" RTM member Kathryn Braun, R-8, asked. "I wasn't given anything that was showing anything overbudget...I can tell you we didn't know and it didn't happen overnight."

Braun said she not only was unaware of the $2.4 million to $6.4 million deficit, she and other RTM members also didn't know the town had forfeited its ability to get back its $6 million investment in the project through revenue from parking permits at the upcoming train station on lower Black Rock Turnpike.

RTM member Liz Hoffmann, R-8, praised Tetreau's report as the best Metro Center report given to the RTM, saying former First Selectman Ken Flatto's reports amounted to "unicorns and rainbows and everyone's in a good place."

Nicholas Mirabile, an RTM member from District 9, said, "As shocking as it is, and it almost leaves me speechless, the number, the potential $6 million overrun, it makes me happy to have a report that discusses numbers."

Mirabile characterized Flatto's Metro Center's reports as "fluff," saying Flatto talked about the history of the project without giving RTM members, or, apparently anyone else, a detailed update on the project.

RTM Moderator Jeff Steele, R-2, said he was hearing Monday night for the first time that the town gave up $6 million in reimbursement from parking permits. "Why would we give up that revenue?" he asked.

Tetreau said Steele was asking him for negotiating details on a deal that town officials entered into a year ago, in a meeting Tetreau wasn't in, and at a time when Tetreau was a member of the Board of Finance and as in the dark as the RTM.

Thomas McCarthy, an RTM member from District 8, said he didn't think he would have allowed the town to assume the risk of cost overruns and questioned how the town ended up in the position it's in.

Town Attorney Richard Saxl said the town wound up managing a $44 million project because the state wouldn't let Blackrock Realty, LLC take the lead since the private developer was in foreclosure proceedings with its lender, TD Banknorth. The state couldn't take over the project because permits had been issued in the town and Blackrock Realty's name. "The state said, in essence, 'You have to do the project. That's the only way it works,' " Saxl said.

Saxl said the state wasn't going to kick in another $19.4 million for the project unless the town gave up the right to get back its $6 million investment through revenue from parking permits.

RTM member David Becker, R-1, questioned how Flatto unilaterally gave up $6 million in revenue and allowed the town to assume liability for cost overruns in the project. "The unilateral decision by the previous administration to expose us to expenditures and drop revenue, unilateral decisons that cost millions of dollars, are pretty disturbing," he said.

Tetreau said it's not something he would have done because he would think such decisions needed approval from town boards. "I would think that it's required, but I'm not sure," he said.

Hoffmann said, "It scares me to think it's negotiated behind closed doors, signed and sealed."

Selectman James Walsh said he was "shocked, appalled and disgusted" at the turn of events, adding that he was not referring to Tetreau, who "walked into this 17 days ago."

Walsh said he had "not seen a more mismanaged project in this town."

"This information wasn't readily available; no one knew what was going on," Walsh said. He said he first learned of the cost overruns at 7:30 p.m. Sunday night.

Echoing Hoffmann and Mirabile, Walsh said the Board of Selectmen had been given "glowing, flowery" reports about the Metro Center from Flatto.

Walsh asked Saxl if Flatto knew the full risks to the town in the April 2010 agreement that Flatto signed. "He was aware of that," Saxl replied.

"He was willing to assume that risk for the town of Fairfield?" Walsh asked.

Saxl replied that Flatto was.

"Jesus Christ," Walsh muttered as he left the microphone.

RTM member Ed Bateson, R-3, asked if the RTM could vote on a funding request that covers the Metro Center deficit at a meeting later than its July meeting. Tetreau replied, "That's a little closer than we'd like to cut it."

Tetreau said at some point, likely in late August, the Fairfield Metro Center project will run out of money, and the contractor will shut things down and move onto other jobs. It would then be more expensive to bring the contractor, subcontractors and equipment back onto the 35.5-acre site at 21 Black Rock Turnpike.

Bateson said the April 2010 agreement, in which the town agreed to cover cost overruns on the Metro Center project and give up reimbursement of its $6 million investment, should have gone to the Board of Finance and RTM. "I really want to support this appropriation, but I'm really torn over the way it's been handled," he said.

RTM member Mary McCullough, R-3, said she wanted Metro Center numbers for May and June before she voted on a funding request to cover the Metro Center's deficit. "I don't see why we should accept less than May and June for our meeting in July," she said.

Tetreau replied, "If you're flexible with your meeting dates, we might be able to do that."

Board of Finance Chairman Tom Flynn said he planned to call a special board meeting  to discuss "what we're going to need to even consider a special appropriation this summer." He said the Board of Finance may need the Metro Center books reviewed by an outside accounting firm.

"We're going to need a heck of a lot more information at our board to move this [funding request] onto your board," Flynn told the RTM.

A funding request to cover the Metro Center deficit would require votes by the Board of Selectmen, Board of Finance and RTM, and Tetreau said he would try to bring the funding request before the Board of Selectmen on July 6, though he said that might be too ambitious.

Tetreau said he wasn't confident the state would be able to act as quickly as the town needed to approve extra money for the project, assuming state money was even available.

"I'm not sure how much money the state has, and I'm not sure they can move that fast, in that timeframe," Tetreau said. "Right now, the question is, 'How small can we make that number and still get the project done on time?' "

"We're going to continue our dialogue with Blackrock Realty and the state and hopefully, some of those conversations will bear fruit."

Walsh asked if anyone had contacted Flatto to ask why, through the end of April, town officials were receiving great reports on the Metro Center and to ask Flatto if he was aware of the cost overruns. "I think it's time, probably, to have him come back and have the ability to defend himself," Walsh said.

Selectman Sherri Steeneck, who served as first selectman after Flatto resigned May 3 to take a job in Gov. Dannel Malloy's administration, said she had a meeting with Flatto right before he resigned and Flatto said the train station project was fine.

"The last meeting we were all at," Steeneck said, referring to Flatto's Metro Center report to the RTM in late April, "we were $2 million ahead."

"I'm drawing straws at this. I have no idea how he came up with the $2 million figure," Steeneck said.

The Fairfield Metro Center, a joint project of the town, DOT and Blackrock Realty, calls for construction of the town's third train station, about 1,400 parking spaces for rail commuters and nearly 1 million square feet of commercial development on 35.5 acres at 21 Black Rock Turnpike.

The construction project now under way, and which is running the potential $6.4 million deficit, is to build public infrastructure for the project.