Keith M. Phaneuf
Gov. Ned Lamont wants to explore tapping private investors to finance at least some of the hundreds of millions of dollars needed to install electronic tolling on its highways.
Echoing a proposal raised earlier this year by Sen. Alex Bergstein, D-Greenwich, Lamont said he believes the private sector is anxious for Connecticut to rebuild its aging, overcrowded transportation infrastructure, and some investors are ready to back that up with their wallets.
“We could put in place, probably, a public-private partnership so … we wouldn’t have to up front all of that (toll installation) cost,” Lamont said while speaking to the Connecticut Council on Philanthropy at the Hartford Hilton Thursday morning. “This is the way I’m envisioning it right now.”
A November 2018 study from the Department of Transportation projected capital start-up costs for tolls at about $372 million. This includes both roadside work, tolling equipment and fiber optic cable to support 82 tolling gantries. The Lamont administration has estimated capital costs at $213 million and projected 53 gantries would be needed. It’s not clear whether cost projections would be revised if legislators vote on a tolls measure later this year.
Lamont said after Thursday’s address that while the concept of a partnership is still being developed, he’s confident about its potential.
“There’s real interest” within the private sector, he said, adding that Connecticut has many advantages that would appeal to private investors.
Lamont said his two-year budget proposal before the legislature would close deficits and provide a “recurring, reliable, predictable set of revenues” for the transportation program over the next three years.
And if legislators approve his proposal for electronic tolling, the state could be in position to receive up to $800 million annually from tolls starting in 2023. The Lamont administration estimates about 40 percent of that would come from out-of-state motorists, though Republican legislators argue the share from outside Connecticut would be much less.
Connecticut also has a skilled, construction workforce ready to tackle the rebuild, Lamont added, and a pressing need for highway, bridge and rail upgrades after decades of inadequate investment.Public-private partnerships have been a source of intense debate in other states since the mid-2000s. Private groups that help finance transportation work understandably want a return on their investments in the form of a share of toll receipts.
In some instances, public assets — roads, rail lines — are leased or sold to the private sector. But Lamont proposed nothing along those lines Thursday.
Proponents argue this approach has enabled states to dramatically accelerate the rebuild of their transportation networks. Critics counter that if the numbers aren’t crunched properly, motorists ultimately pay the price with higher tolls.
For example, Indiana approved a 75-year lease of the Indiana Toll Road for $3.85 billion in 2006. Within eight years the project amassed $5.8 billion in debt.
“We’re going to be smart about how we do these things,” the governor said.
Bergstein, who is vice chairwoman of the legislature’s Transportation Committee, has proposed an “infrastructure bank” program to leverage private dollars for a wide variety of transportation infrastructure work — not just installation of tolls.
Bergstein told the CT Mirror in mid-January that she believes private-sector support for a transportation rebuild is huge, and that Connecticut could leverage huge private dollars.
Mayor David Merchant explained that the town is taking the next steps after state Rep. Whit Betts and state Sen. Henri Martin filed legislation to try to fund the creation of a police headquarters. Currently, the 21 members of the Plymouth Police Department operate out of town hall. Merchant has said that this is a small space for the number of officers and that there currently are not enough jail cells. The cells are also not segregated by gender and don’t allot a space for juveniles.
“We need to have a plan in place if we are called up to testify,” said Merchant. “The governor has deducted $500 million from bonding, which could hurt our chances, but I have written to every member of the Bond Commission to plead our case.”
The Police Department Building Committee, Merchant said, will look into the architectural work that would need to be done, as well as wetlands impacts and other concerns, for if funding for the new building were to come.
The members of the Police Department Building Committee are Michael Audette, Cesar Beiros, Matthew Gaultieri, Christopher Latimer, Victor Mitchell, Ann Marie Rheault and Mark Sekorski.
Merchant said that Audette served on the building committee for the fire department and was “instrumental” and “a huge help” to that committee. He said that the new committee could benefit by “piggy-backing” on his experience.
Beiros, Gaultieri and Latimer are members of the police department.
“We reached out to see if any members of the police department would be interested in serving,” said Merchant. “When we were building the fire headquarters, we reached out to members of the fire department. These guys are the future of our police department and I’m excited that they have stepped up to help us.”
Mitchell, Merchant said, was the chair of the Fire Department Building Committee.
“He did a great job and with his experience he will be a great asset,” he said.
Rheault is the town’s finance director and Merchant said that she too stepped forth to help and would be a great asset.
Sekorski, Merchant said, served on the fire board too and his knowledge of construction is “second to none.” “What he has given to our community is hard to match,” said Merchant.
Bill aims to force action on stalled Hartford trash plant project
Matt Pilon
It's been over a year since state officials selected a $229 million proposal from a private company to overhaul and operate the biggest waste-to-energy plant in Connecticut, but with contract negotiations dragging on seven months past deadline, a new bill before lawmakers could force a resolution.
House Bill 7293, raised by the Environment Committee on Tuesday at the request of the Department of Energy and Environmental Protection (DEEP), would give the agency's commissioner the authority to "order" the Hartford trash plant's quasi-public overseer, the Materials Innovation and Recycling Authority (MIRA), to sign a contract with a developer. Existing state law, passed in 2014, uses the verb "direct."
Legislators gave MIRA the authority to negotiate the contract with developer Sacyr Rooney, but that power would be undercut if the legislature passes the newly proposed bill, scheduled for a public hearing next week.
DEEP, which selected Sacyr Rooney early last year as the developer-operator for the plant and related facilities, has the power to replace the company with one of the other two outfits that bid on the project, but the agency has placed more of the blame for the delay on MIRA.
"DEEP has prioritized working with MIRA to be a productive partner to engage in discussion and due diligence to enable this proposal to move this forward," DEEP Commissioner Katie Dykes said in a written statement Thursday morning.
A recent turbine failure that put the Hartford plant out of commission, or operating at a reduced capacity, for approximately four months has added urgency to the contract delays.
Donald Stein, MIRA's chairman and First Selectman of Barkhamsted, said MIRA has been negotiating in good faith.
"I think this subverts that," Stein said of the proposed legislation. "I think it's bad public policy and I think it sets the wrong precedent."
He still holds out hope that both sides can come to an agreement, but he acknowledged the negotiations are taking a long time.
"If they weren't difficult, we would have a deal by now," he said of the talks.
Richard Barlow, vice chairman of MIRA's board of directors and a former waste management official at DEEP, said in an interview Thursday morning that it's unfair to blame MIRA for the delay. He said the board is trying to fulfill its statutory duty to ensure that municipalities (more than 50 of which send their waste to the plant) are protected moving forward. He hopes the legislature won't force MIRA's hand in the contract talks.
"The [proposed] change in wording is not going to change the concerns that the directors have," Barlow said.During negotiations, MIRA has been pushing for more public oversight once the plant is redeveloped.
"[Sacyr Rooney] is envisioning basically that they want to come in, we give them the keys to the bus and then get out of the way," Barlow said.
Sacyr Rooney declined to comment for this story.
One concern is that municipalities could have little say, once a contract is signed, over increases to the tipping fees they will pay to the new operator, he said. Local governments could potentially find other places to send their waste, but the market is tight, Barlow acknowledged. The plant is a key asset in the state's waste strategy, and processes roughly one-third of municipal solid waste annually -- around 700,000 tons last year.
DEEP has said the redevelopment of the plant would increase diversion of certain materials from the waste stream, which could mean burning less trash overall. The project has also been pitched as a way to stabilize increases in tipping fees municipalities and other customers pay to the plant.
Most municipal customers are currently paying $72 per ton to send waste to MIRA, but that is slated to rise to $83 on July 1.
Sacyr Rooney's proposal, submitted in 2017, included a fee of $65 per ton in the first year of operation -- well below the next lowest bidder.
Barlow, however, doesn't buy it. Fees are already rising without having to make debt payments for a major redevelopment, like Sacyr Rooney would have to do. Barlow called a fee of $65 per ton "fantasy island."
He suspects the fee would be likely be somewhere between $90 and $100 per ton.
It's true that tipping fees are going to be higher than $65, DEEP project manager Lee Sawyer acknowledged Thursday. He said DEEP learned last summer that fees would be higher, and received projections from Sacyr Rooney in December. The projected increase in tipping fees has not previously been reported publicly. Fees would be laid out in the contract.
Sawyer attributed the higher expected tipping fees to the developer's "significant investigation of the condition of the facility," which led it to determine a need for accelerated investment in "critical renovations."
Another factor impacting expectations include major shifts in the global recycling market.
Still, Sawyer predicted that the tipping fee would be slightly lower than the $83 MIRA will begin charging in a few months. That lower fee would be made possible through reduced MIRA overhead costs, a projected revenue increase for the plant from the spot market, and other factors.
"Presumably, only about half of the capacity would be locked up by long term municipal contracts, and [Sacyr Rooney] will charge market rates for other waste, which they project will command higher tipping fees," Sawyer said.
Barlow is also worried about Sacyr Rooney's ability to draw commitments from municipalities to the overhauled plant. While Barlow said municipal officials are concerned about the prospect of being asked to sign contracts as long as 30 years, Sawyer disputed that Sacyr Rooney is reliant on such long deals.
The contract between the state and Sacyr Rooney might be 30 years, he said, but municipalities would have "a range of contracting options" to pick from. Sawyer said DEEP has been discussing the options with towns.
Still, if local governments don't like other terms of the contract, such as those that govern tipping fees increases, and decide not to sign up, it could hurt the developer when it goes to the bond market to borrow money for the project, Barlow said.
If municipalities pull out, it could also set up a situation down the road where Sacyr Rooney wants to burn waste from other states to shore up the plant's revenue, he said.
Despite his concerns, Barlow shares Stein's belief that a private operator can be the right path forward. "There is definitely a deal to be made," he said.
“We need to have a plan in place if we are called up to testify,” said Merchant. “The governor has deducted $500 million from bonding, which could hurt our chances, but I have written to every member of the Bond Commission to plead our case.”
The Police Department Building Committee, Merchant said, will look into the architectural work that would need to be done, as well as wetlands impacts and other concerns, for if funding for the new building were to come.
The members of the Police Department Building Committee are Michael Audette, Cesar Beiros, Matthew Gaultieri, Christopher Latimer, Victor Mitchell, Ann Marie Rheault and Mark Sekorski.
Merchant said that Audette served on the building committee for the fire department and was “instrumental” and “a huge help” to that committee. He said that the new committee could benefit by “piggy-backing” on his experience.
Beiros, Gaultieri and Latimer are members of the police department.
“We reached out to see if any members of the police department would be interested in serving,” said Merchant. “When we were building the fire headquarters, we reached out to members of the fire department. These guys are the future of our police department and I’m excited that they have stepped up to help us.”
Mitchell, Merchant said, was the chair of the Fire Department Building Committee.
“He did a great job and with his experience he will be a great asset,” he said.
Rheault is the town’s finance director and Merchant said that she too stepped forth to help and would be a great asset.
Sekorski, Merchant said, served on the fire board too and his knowledge of construction is “second to none.” “What he has given to our community is hard to match,” said Merchant.
Bill aims to force action on stalled Hartford trash plant project
Matt Pilon
It's been over a year since state officials selected a $229 million proposal from a private company to overhaul and operate the biggest waste-to-energy plant in Connecticut, but with contract negotiations dragging on seven months past deadline, a new bill before lawmakers could force a resolution.
House Bill 7293, raised by the Environment Committee on Tuesday at the request of the Department of Energy and Environmental Protection (DEEP), would give the agency's commissioner the authority to "order" the Hartford trash plant's quasi-public overseer, the Materials Innovation and Recycling Authority (MIRA), to sign a contract with a developer. Existing state law, passed in 2014, uses the verb "direct."
Legislators gave MIRA the authority to negotiate the contract with developer Sacyr Rooney, but that power would be undercut if the legislature passes the newly proposed bill, scheduled for a public hearing next week.
DEEP, which selected Sacyr Rooney early last year as the developer-operator for the plant and related facilities, has the power to replace the company with one of the other two outfits that bid on the project, but the agency has placed more of the blame for the delay on MIRA.
"DEEP has prioritized working with MIRA to be a productive partner to engage in discussion and due diligence to enable this proposal to move this forward," DEEP Commissioner Katie Dykes said in a written statement Thursday morning.
A recent turbine failure that put the Hartford plant out of commission, or operating at a reduced capacity, for approximately four months has added urgency to the contract delays.
Donald Stein, MIRA's chairman and First Selectman of Barkhamsted, said MIRA has been negotiating in good faith.
"I think this subverts that," Stein said of the proposed legislation. "I think it's bad public policy and I think it sets the wrong precedent."
He still holds out hope that both sides can come to an agreement, but he acknowledged the negotiations are taking a long time.
"If they weren't difficult, we would have a deal by now," he said of the talks.
Richard Barlow, vice chairman of MIRA's board of directors and a former waste management official at DEEP, said in an interview Thursday morning that it's unfair to blame MIRA for the delay. He said the board is trying to fulfill its statutory duty to ensure that municipalities (more than 50 of which send their waste to the plant) are protected moving forward. He hopes the legislature won't force MIRA's hand in the contract talks.
"The [proposed] change in wording is not going to change the concerns that the directors have," Barlow said.During negotiations, MIRA has been pushing for more public oversight once the plant is redeveloped.
"[Sacyr Rooney] is envisioning basically that they want to come in, we give them the keys to the bus and then get out of the way," Barlow said.
Sacyr Rooney declined to comment for this story.
One concern is that municipalities could have little say, once a contract is signed, over increases to the tipping fees they will pay to the new operator, he said. Local governments could potentially find other places to send their waste, but the market is tight, Barlow acknowledged. The plant is a key asset in the state's waste strategy, and processes roughly one-third of municipal solid waste annually -- around 700,000 tons last year.
DEEP has said the redevelopment of the plant would increase diversion of certain materials from the waste stream, which could mean burning less trash overall. The project has also been pitched as a way to stabilize increases in tipping fees municipalities and other customers pay to the plant.
Most municipal customers are currently paying $72 per ton to send waste to MIRA, but that is slated to rise to $83 on July 1.
Sacyr Rooney's proposal, submitted in 2017, included a fee of $65 per ton in the first year of operation -- well below the next lowest bidder.
Barlow, however, doesn't buy it. Fees are already rising without having to make debt payments for a major redevelopment, like Sacyr Rooney would have to do. Barlow called a fee of $65 per ton "fantasy island."
He suspects the fee would be likely be somewhere between $90 and $100 per ton.
It's true that tipping fees are going to be higher than $65, DEEP project manager Lee Sawyer acknowledged Thursday. He said DEEP learned last summer that fees would be higher, and received projections from Sacyr Rooney in December. The projected increase in tipping fees has not previously been reported publicly. Fees would be laid out in the contract.
Sawyer attributed the higher expected tipping fees to the developer's "significant investigation of the condition of the facility," which led it to determine a need for accelerated investment in "critical renovations."
Another factor impacting expectations include major shifts in the global recycling market.
Still, Sawyer predicted that the tipping fee would be slightly lower than the $83 MIRA will begin charging in a few months. That lower fee would be made possible through reduced MIRA overhead costs, a projected revenue increase for the plant from the spot market, and other factors.
"Presumably, only about half of the capacity would be locked up by long term municipal contracts, and [Sacyr Rooney] will charge market rates for other waste, which they project will command higher tipping fees," Sawyer said.
Barlow is also worried about Sacyr Rooney's ability to draw commitments from municipalities to the overhauled plant. While Barlow said municipal officials are concerned about the prospect of being asked to sign contracts as long as 30 years, Sawyer disputed that Sacyr Rooney is reliant on such long deals.
The contract between the state and Sacyr Rooney might be 30 years, he said, but municipalities would have "a range of contracting options" to pick from. Sawyer said DEEP has been discussing the options with towns.
Still, if local governments don't like other terms of the contract, such as those that govern tipping fees increases, and decide not to sign up, it could hurt the developer when it goes to the bond market to borrow money for the project, Barlow said.
If municipalities pull out, it could also set up a situation down the road where Sacyr Rooney wants to burn waste from other states to shore up the plant's revenue, he said.
Despite his concerns, Barlow shares Stein's belief that a private operator can be the right path forward. "There is definitely a deal to be made," he said.