By: Keith M. Phaneuf
Connecticut’s cash-starved transportation program would need to scrap some rail services, drive up fares, suspend 40 percent of planned capital projects and defer major highway rebuilds like the Hartford viaduct, to remain solvent over the next five years, Gov. Dannel P. Malloy’s administration has warned Wall Street.
As Connecticut prepares for a major bond sale next month to finance transportation improvements, projections sent recently to bond-rating agencies show the new state budget won’t prevent the Special Transportation Fund from falling into a series of annual deficits starting in July — or from reaching insolvency by mid-2020.
The Department of Transportation estimates that to avert this crisis with revenue alone would require a 14-cents-per-gallon increase in gasoline taxes — at least until tolls could be fully implemented about six years from now. The DOT estimates tolls could raise $700 million annually by about 2024.
Meanwhile, transportation officials also warned the deficits, absent adjustments, probably would derail tens of millions in transportation grants.
And while insolvency isn’t expected for another two and a half years, some cutbacks — including a reduction in Shoreline East rail services — might be necessary as soon as next May, Department of Transportation officials warned.
“Without significant new revenue, the only way to balance the STF and operate DOT is to severely cut the operating budget and slash the capital program,” transportation officials wrote last month in a memo to Malloy.
Malloy was scheduled to discuss the transportation crisis with legislative leaders Wednesday afternoon and brief them in detail on Thursday.
Top lawmakers excluded administration officials from the four weeks of negotiations that produced a new, biennial budget plan last month. The governor signed that deal after both the Senate and House approved it with bipartisan, veto-proof margins.
Malloy’s transportation vision in tatters
The governor, who proposed a 30-year, $100 billion program to rebuild Connecticut’s transportation system in February 2015, has had limited success since then securing resources for the program.
Most of his time since then has been spent pressing for resources simply to keep the transportation program financially afloat.
About 7 percent of the overall state budget, the Special Transportation Fund — which holds about $1.51 billion this fiscal year — chiefly is used to cover debt payments on transportation-related borrowing and DOT operations.
Lawmakers agreed in the spring of 2015 to dedicate a portion of sales tax receipts to transportation. This was deemed the key to funding the first five years of the governor’s 30-year program, through 2020.
A gubernatorial study panel recommended several options in early 2016 to fund the final 25 years, including restoring tolls to highways, increasing gasoline taxes and boosting sales taxes. These options, which would raise an estimated $42 billion over 30 years, have not been adopted.
Meanwhile, projected growth in gasoline tax receipts — which has been undercut for years by improving vehicle efficiency — has been downgraded again.
As recently as January, fuel tax receipts were expected to climb 16 percent over the next three years combined. But a new forecast issued two weeks ago reduced that to just under 10 percent.
Huge cutbacks to operating, capital programs
If legislators don’t want to raise the revenue to cover those costs, the DOT and the administration say severe cutbacks would be necessary.Connecticut must demonstrate to potential bond investors that its transportation program has sufficient revenues to cover double its projected capital costs for the next five years.
Given the projected crisis, the administration targeted potential spending cuts and fare increases that it calculates are necessary to restore balance — unless legislators dedicate more revenues to transportation.
Anticipated cutbacks involving transportation operations include:
- A 10 percent rail-fare increase starting in July 2019, followed by additional 5 percent bumps in the 2021 and 2022 fiscal years.
- A 25-cent bus-fare increase starting in July 2018.
- Reductions to the Shoreline East rail service as early as 2018 and possible elimination of the entire service in 2020.
- Elimination of weekend and off-peak service on the Danbury, Waterbury and New Canaan branches that feed into the MetroNorth commuter rail line, which links New Haven and New York City. This could happen as early as 2019.
- Reductions to transit district subsidies of 5 percent or more.
- Anticipated cutbacks involving the capital program include:
- Reductions to the overall planned capital program for the next five years by 40 percent.
- Deferral of major reconstructions of Interstate 84 including the viaduct — an elevated section of highway — in Hartford and the “Mixmaster” junction of I-84 and Route 8 in Waterbury.
- Reduction or possible elimination of all municipal aid for transportation projects. The state distributes $60 million annually through the Town Aid Road program.
- Cancellation of planned fleet bus purchases.
NEW HAVEN — Members of the governing board of the South Central Connecticut Regional Water Authority Wednesday night unanimously approved a $15 million fix of the tunnel and pipe system that brings water from the utility’s largest reservoir to a treatment facility in North Branford.
The vote by the 21-member Representative Policy Board came after an hour-long hearing on the emergency repair plan at which not a single member of the public spoke. The plan calls for creating a temporary bypass system that would allow water to continue to flow from Lake Gaillard to the treatment facility, while permanent repairs are made to the pipe and tunnel system.
With the project now approved, construction of the bypass will start immediately and is expected to be finished by the end of the month, said Ted Norris, the Authority’s vice president of asset management. Repairs to the permanent system will start in January once the bypass is operational and be completed by May 2018, Norris said.
The largest portion of the project’s overall cost, which includes $1 million for costs associated with the Authority’s issuing bonds to pay for the work, is the $6.7 million expense to create the bypass and then remove it five months later. Norris said one of the challenges in creating the bypass will be bringing the water from the lake up a 200-foot vertical incline and then back down again. Parts of the permanent system are 90 years old and Authority officials have known about leaking within the tunnel system since the 1970s. But they had only begun making preparations to correct that particular problem this summer.
The sense of urgency to make repairs increased exponentially on Oct. 16, when Authority officials discovered a leak in the system’s 48-inch cast iron pipes, some of which are buried 30 feet beneath the ground. “That was a real game changer,” Norris said of the discovery of the leak in the pipe.
Sixty percent of the water the RWA brings to customers each day comes from Lake Gaillard. While Norris said that there is no reason to expect the cast iron pipes will burst before they can be fixed, a catastrophic failure of the system would pose both health and safety threats.
Large volumes of water spewing out of a burst pipe could conceivably damage homes and businesses located downhill from the delivery system. The potential health risk would come from having to quickly shift from the Lake Gaillard system to the one that is used to draw water from Lake Whitney.
The Lake Whitney reservoir has been out of service for several months to fix a portion of the water filtering system, said Kate Powell, a spokeswoman for the Authority. An emergency switch, in the event of a failure of the Lake Gaillard system, would mean the Authority would be forced to deliver untreated or “raw” water to customers, which Norris said would necessitate the Authority’s customers having to boil any water they used. CLICK TITLE TO CONTINUE
Big Y coming to former Walmart site in Derby
DERBY —- Big Y Foods Inc. is coming to the city, with plans to open a World Class Market in the former Walmart Plaza on New Haven Avenue.
That’s according to a press release issued Wednesday from corporate headquarters that said ,a 60,000-square-foot grocery store is slated to open sometime in 2019, bring in 150 new jobs and a $5 million investment in the shopping center, located at 656 New Haven Road, or Route 34.
“We are excited to announce this addition to our Connecticut community of stores,” Charles D’Amour, Big Y president and CEO, said in a statement. “We look forward to bringing Big Y’s world class service, quality and selection closer to shoppers in Derby and surrounding communities.”
The new Derby store will serve as the Springfield-based grocery chain’s 71st Big Y market, with locations throughout Connecticut and Massachusetts. There are several Big Y stores already in New Haven County including in Ansonia, Branford, Cheshire, Guilford, Meriden, North Branford, North Haven, Naugatuck and Shelton.
The new store represents an investment of more than $5 million by Big Y into the local community, and is part of an overall, soon-to-be-developed 177,000-square-foot retail center, according to the news release. The shopping center, which formerly housed two anchors — Walmart and Adam’s grocery store — is being redeveloped and marketed by DLC Management Corporation of Elmsford, N.Y. As part of the project, DLC plans to overhaul the center with a multimillion-dollar renovation to include façade modernization, parking lot repaving/restriping, sidewalk repairs, streetscape and landscape enhancements, along with lighting improvements, according to the press release.
“We at DLC are extremely thrilled about this project,” Chris Ressa, DLC senior vice president of leasing, said in a statement. “To bring a brand like Big Y to Derby will have such a profound impact on the local community and economy. We are honored to be a part of this development and remain committed to making Derby a remarkable place to live, work, shop, and dine.” Newly-elected Mayor Richard Dziekan was thrilled by the news Wednesday.
“The mayor’s office is pleased that Big Y Market has chosen to take over the former Walmart site,” said Dziekan. “Kudos to DLC and Big Y for getting a deal done. I look forward to seeing the renovations to the complex and we will do whatever is necessary to facilitate the process. It’s great news that 150 jobs will be coming to our city. Upon walking during the campaign, I heard from many residents who wanted to see a grocery store go back into that plaza and now they will get their wish. I can’t wait to see the aesthetic changes to the property and to help cut the ribbon for Big Y.” CLICK TITLE TO CONTINUE
Tribes throw jabs at MGM casino plans
BRIDGEPORT — Hours before MGM Resorts International CEO James Murren was set to make a keynote address at the Bridgeport Regional Business Council’s annual dinner, the Mohegan and Mashantucket Pequot Tribal Nations threw a jab at the Las Vegas company’s local plans.
The tribes, whose partnership is MMCT, posted a video Tuesday afternoon, disputing MGM’s plans to open a casino and resort in Bridgeport.
The 30-second video cited previous soundbites of Murren discussing the company’s plans for the city, starting with a September address where he talked about the project’s benefit to the city and the state. The video also included part of Murren’s Nov. 8 quarterly conference call with investors and financial analysts during which he said MGM Springfield would be the company’s “last major development projected here in the United States.”
The video concluded with the tagline “Connecticut isn’t getting an MGM Casino, Connecticut is getting played,” driving home the tribes’ thoughts about the Bridgeport-based project.
Following his keynote address Tuesday evening, Murren debunked the video’s message, saying it was in “sad taste.”
While he did not discuss his Novemeber conference call during his speech, Murren said not mentioning Bridgeport was not indicative of MGM’ CLICK TITLE TO CONTINUE
Tribes want to build Bridgeport casino: MGM: ‘We’ve got the best site’
It took longer than some people expected, but the casino-operating Native American tribes now say they want in on the action in Bridgeport.
The tribes say they should be part of any discussion on a casino in Bridgeport if the state were to move in that direction. In a letter to legislative leaders, the two tribal chairmen did not mention MGM by name -- but they’re reacting to MGM’s proposal for a $675 million casino resort on Bridgeport Harbor, announced Sept. 18.
The letter, apparently timed to coincide with a flurry of lobbying and a visit to Bridgeport Tuesday night by MGM CEO Jim Murren, throws the question of a Bridgeport casino into a full-scale battle that could dominate the state’s political scene in 2018, along with the election.
It also acknowledges that the tribes, working jointly as MMCT, take seriously the threat of an MGM Bridgeport project. Until now, MMCT has publicly portrayed the MGM plan as a stunt that isn’t likely to happen because, they say, it can’t win state approval.
For their part, executives at MGM say the tribes or any other developer can enter the competition in Bridgeport, but they’ll have to find a site that can compete with the one on the harbor. Aside from controlling the best site - right off I-95, directly across the harbor from downtown - MGM already has the strong support of the cities of Bridgeport and New Haven. “All comers are welcome. We’ve got the best site,” said Uri Clinton, senior vice president of MGM. “If someone else wanted to...make a proposal they’d have to have some deal with someone else who has land.
The tribes have on their side of the argument an agreement between the state and the tribes, dating to 1993, under which the tribes send Connecticut 25 percent of slot machine revenues in exchange for the exclusive right to operate slots in the state.
The tribal chairmen reminded legislative leaders that the compact, as it’s known, has yielded $7 billion for the state. They didn’t say the take is shrinking as competition rises in adjacent states, and is expected to fall below $200 million a year after MGM Springfield opens next fall.
MGM says the state would be better off backing that plan and the revenues it would generate than staying with the tribes, as the annual state take from the tribes has fallen from a peak of $430 million in 2007 to $265 million last year.
The tribal chairmen, Rodney Butler of the Mashantucket Pequot Tribal Nation and Kevin Brown of the Mohegan Tribe, appealed to the long, shared history between them and the state.
"For more than two decades, our two tribes and the state of Connecticut have forged a mutually beneficial partnership," the chairmen said, adding that they are "moving forward" with their approved, midsize casino in East Windsor, which the state approved as a way to pick off customers heading to MGM Springfield. There has been no public sign of progress in East Windsor so far.
And the chairmen reminded the leaders that they originally wanted approval for three commercial casinos, one in the Danbury area, one in Fairfield County along the shoreline and one in the Hartford area. CLICK TITLE TO CONTINUE
The tribal chairmen reminded legislative leaders that the compact, as it’s known, has yielded $7 billion for the state. They didn’t say the take is shrinking as competition rises in adjacent states, and is expected to fall below $200 million a year after MGM Springfield opens next fall.
MGM says the state would be better off backing that plan and the revenues it would generate than staying with the tribes, as the annual state take from the tribes has fallen from a peak of $430 million in 2007 to $265 million last year.
The tribal chairmen, Rodney Butler of the Mashantucket Pequot Tribal Nation and Kevin Brown of the Mohegan Tribe, appealed to the long, shared history between them and the state.
"For more than two decades, our two tribes and the state of Connecticut have forged a mutually beneficial partnership," the chairmen said, adding that they are "moving forward" with their approved, midsize casino in East Windsor, which the state approved as a way to pick off customers heading to MGM Springfield. There has been no public sign of progress in East Windsor so far.
And the chairmen reminded the leaders that they originally wanted approval for three commercial casinos, one in the Danbury area, one in Fairfield County along the shoreline and one in the Hartford area. CLICK TITLE TO CONTINUE