March 12, 2020

CT Construction Digest Thursday March 12, 2020

Legislators to break Lamont’s ‘debt diet’ by

Updated at 6:45 p.m. Wednesday with final vote on state bond package.
The Democrat-controlled legislature is expected to approve a two-year, $4.7 billion bond package Wednesday that shatters Gov. Ned Lamont’s planned “debt diet” for state borrowing by more than $1.1 billion.
The House of Representatives approved the borrowing plan 126-20 following a one-hour, early-afternoon debate. The Senate approved it 31-5 at 6:40 p.m., following a two-hour debate.
And while Democrats insisted the bond package they negotiated with the governor would advance economic development, affordable housing, municipal aid, transportation and other priorities, Republicans countered Lamont’s reversal would weaken Connecticut’s standing on Wall Street.
More than half of the Republicans in both chambers voted for the bill. But Senate Minority Leader Len Fasano, R- North Haven, said that was because the package included three overdue state grants to cities and towns that are paid for using bonded dollars, adding that many legislators were worried that would face criticism back home if they voted “no” on Wednesday.
“Governor Lamont has repeatedly told the public that he was committed to limiting bonding to the core functions of government,” Fasano said. “He has blasted his predecessors for overusing the state’s credit card. He told credit rating agencies, investors, businesses and taxpayers that he would be different. But today he is going back on that promise.”
The governor and his fellow Democrats in the legislature’s majority agreed on $2.3 billion in new borrowing for the current fiscal year, and $2.4 billion in 2020-21.
In addition, legislators already have approved $322 million in borrowing for this year and $351 million for next for capital projects at public colleges and universities and for the state’s bioscience and defense-related economic development programs.
Couple all of that with another $706 million in transportation-related borrowing approved previously for this fiscal year, and the total, potential hit to Connecticut’s credit card exceeds $6 billion over the two fiscal years combined.
Lamont, who took office in January 2019, pledged to curb this borrowing, and particularly to clamp down on the single-largest category – general obligation borrowing.
General obligation borrowing — bonds that will be repaid over many years with resources from the budget’s General Fund — should be limited to just under $1 billion per year, Lamont said. That’s in addition to the G.O. bonding used for higher education and special economic development programs.
But the bond package adopted Wednesday includes $1.4 billion in general obligation bonds for this fiscal year, and $1.64 billion in 2020-21.
Fasano, who held a late morning press conference in the Legislative Office Building, stood before a poster board containing a series of quotes from Lamont and state Treasurer Shawn Wooden hailing the debt diet during his first months in office.
“The credit rating agencies, investors, businesses around the globe and our taxpayers are watching what we do and have responded positively so far,” Lamont said last July. “As we move forward we cannot let them down by returning to old, bad habits and hoping for a different result.”
Fasano noted the average annual borrowing in the latest bond package nearly matches the heaviest level of borrowing during Gov. Dannel P. Malloy’s administration. Annual state bonding exploded dramatically under Malloy, who served from 2011 – 2018. Connecticut struggled during this period with a very sluggish recovery from the great recession and frequently used its credit card to ease pressure on the state budget.
That’s because legislative approval is just the first stage in a multi-step borrowing process. The State Bond Commission must approve any legislative authorization before any borrowed funds can be spent.
As governor, Lamont chairs the 10-member bond commission and his budget office sets its agenda.
Reiss noted that under Lamont’s leadership, the commission has allocated “about half of what the prior administration averaged while simultaneously making the necessary and needed investments we were able to under existing authorizations.”
Reiss added that “this is not a time for baseless allegations and finger-pointing, but it is time for effective governance of this great state and its finances, which will always be measured and balanced with making appropriate investments in Connecticut’s future.”
And the top Democrat in the Senate said the package recognizes critical needs in education, transportation, social services, economic development and housing, and would have tremendous long-term benefits.
“This is a capital bill that does meet the needs of the state of Connecticut in so many different respects,” said Senate President Pro Tem Martin M. Looney, D-New Haven, who called it “a reasonable, responsible level of capital borrowing.”
Year-long stalemate on bonding and tolls comes to a close
Wednesday’s action ended a yearlong stalemate between the governor and his fellow Democrats in the legislature over borrowing and tolls.
Connecticut ranks among the most indebted states, per capita, in the nation, and debt service costs consume more than 10% of the annual budget, a problem that prompted Lamont to press for his debt diet immediately upon taking office.
But the governor also had been urging lawmakers to curb their borrowing as part of a larger plans that also involved tolls and the state budget’s Special Transportation Fund.Connecticut borrows just under $800 million per year for transportation work, pairing that with about $750 million in federal grants to support highway, bridge and rail upgrades. The STF covers the annual payments on that borrowing, but transportation officials say the aging, overcrowded infrastructure is overdue for a major rebuild and more resources are needed.
Lamont wanted tolls — first on cars and trucks and later on trucks only — to bolster the STF and, in turn, enable more transportation borrowing. And he frequently warned lawmakers that he couldn’t approve a bond package until tolls were resolved because — absent toll receipts — he would need to shift existing bonding away from non-transportation programs and into highway, bridge and rail work.
The governor finally conceded in February that lawmakers wouldn’t approve tolls and the new bond package does add $200 million in annual borrowing — to be repaid out of the budget’s General Fund — to complement the existing $780 million per year in bonding supported by the Special Transportation Fund.
Cities and towns receive overdue state grants
The bonding bill not only ends the standoff between Lamont and legislators but also releases three non-education grants for cities and towns that had been held up by this process.
The state will borrow $166 million per year for communities, including:
  • $60 million for the Town Aid Road [TAR] grant;
  • $30 million for the Local Capital Improvement Program;
  • $76 million for an omnibus Grant for Municipal Projects.
Municipal advocates have argued for months that the delayed road grant is particularly problematic for local budgets.
Half of the $60 million TAR grant normally is given to communities shortly after the fiscal year begins on July 1 to help pay for summer road repaving and fall tree-clearing work. The second half goes out in early January to help fund snow plowing.
Both payments have been held up because there has been no bond package. But Lamont has said once a bond bill is sent to his desk, he will hold a bond commission meeting soon to expedite release of the local aid.
“These are ways Connecticut is a partner for our municipality,” Looney said. While most other states have counties that assist their municipalities, Connecticut lacks this third level of government, he noted, adding that makes state assistance even more critical.
Bonding for economic development, housing, social services and coronavirus mitigation
The bonding deal includes many other components besides municipal aid.
More than $850 million over this fiscal year and next combined would be borrowed to support municipal school construction and renovation projects and another $84 million for improvements to municipal water treatment plants.
Lawmakers included $200 million for urban economic development initiatives statewide, $90 million for development of Connecticut’s deep water ports, and $30 million in economic assistance grants for small towns.
The package also includes $45 million for a new transit-oriented, quasi-public development agency and $65 million to renovate the XL Center in Hartford.
More than $200 million over this fiscal year and next combined would be authorized for affordable housing program. The bulk of those funds, $175 million, would be dedicated for the Flexible Housing Program, which provides grants and loans for the development of affordable housing projects.
Community-based, nonprofit social service agencies were winners in the bond package, receiving $50 million in total across this fiscal year in next to help cover capital expenses.Nonprofits, who provide the bulk of state-sponsored social services for the disabled, mentally ill, abused children, drug addicts and others, also have been seeking additional operating funds in the state budget. Leaders of these nonprofits say state funding has not kept pace with the cost of inflation for nearly two decades, forcing agencies to reduce or eliminate programs and cut staff.
Lamont has not supported that request for additional funds in the operating budget to date.
Legislators also included $5 million in bond package to support various efforts to mitigate the spread of the coronavirus across Connecticut.
Other components of the package include:
  • $40 million for workforce development and other job training efforts;
  • $15 million to enhance local school security;
  • $5 million for remediation of lead in drinking water at public schools.

Not all Republicans opposed the bond packageNot all Republicans saw the bond package as negatively as Fasano did, and that town aid played a key role.

In the House, a little more than half of the GOP minority voted for the bond package. And while the same was true in the Senate, some House Republicans publicly praised the bill.
Rep. Livvy Floren of Greenwich, ranking House Republican on the legislature’s bonding subcommittee, went so far as to say “it adheres to the ‘debt diet’ without imposing starvation.”
Floren later modified her description, saying it might better be compared to “intermittent fasting.”Both Rep. Chris Davis of Ellington, ranking House Republican on the Finance, Revenue and Bonding Committee, and House Minority Leader Themis Klarides, R-Derby, said they voted for the deal to secure overdue aid for towns and additional funding for transportation work.
But Davis and Klarides both said the bond package was too large, and urged Lamont to use the bond commission to restrain actual borrowing.
We absolutely are 100% behind the municipal aid and the transportation funding,” Klarides said. “But you’re forced to vote for things you don’t like to get the things you do like.”
Klarides noted her caucus offered an amendment to cut more than $380 million in proposed borrowing out of the bond package, but House Democrats rejected it with a party-line vote.
But House Speaker Joe Aresimowicz, D-Berlin, said the House Republican support shows Fasano is more concerned with partisan politics than with the education, economic development, transportation, and other priorities the bond package supports.
“I’ve been saying for months now we have to put an end to this political division that’s ruling this state,” the speaker said.

General Assembly approves $7 million for Preston Norwich Hospital cleanup
Claire Bessette           
Preston — The state General Assembly Wednesday overwhelmingly approved a nearly $400 million bond package Wednesday that includes $7 million the town requested for the final cleanup of the former Norwich Hospital property to prepare to turn it over to Mohegan Gaming & Entertainment.
State Sen. Cathy Osten, D-Sprague, said the next step for the funding would be for Gov. Ned Lamont and the group of state legislative leaders and administration officials to include the Preston funding request in an upcoming Bond Commission meeting. The next commission meeting is not yet scheduled.
“I’m excited about it,” Osten said Wednesday evening. “It still has one more big piece to go through. Congratulations to the town of Preston. Let’s get this moving along now.”
Mohegan tribal officials said earlier this month that the tribe expects to receive a plan from a consultant by early April that could solidify the tribe’s conceptual plan for a $400 million to $600 million development on the property. That included sports complexes, a marina, recreation, hotels, upscale camping and senior housing. The tribe also is exploring a way to cross the river — such as a seasonal ferry, gondolas or a tram.
The town requested the $7 million after environmental test crews discovered extensive contamination throughout the property, where the state had used coal ash from an on-campus coal-burning plant as subsurface for roadbeds and parking lots.
The Senate passed the bond package, 31-5, without discussion of the Preston funding request and the House of Representatives earlier in the day approved the package, 126-4. Osten, state Sen. Heather Somers, R-Groton, whose district includes Preston, and state Sen. Paul Formica, all of whom worked on the funding request, voted in favor of the overall bond package.
But state Rep. Mike France, R-Ledyard, whose district includes Preston, voted against the package. He said after the vote Wednesday that he appreciated that Gov. Ned Lamont included the Preston request in the $398 million package, but he objected to several other items, which led to his vote.
France objected that the bond package included $65 million for renovations to the XL Center arena in Hartford, on top of $40 million approved in 2017. France said the state should sell the center to a private entity that would do the renovations and market the arena for more events that would bring more people to downtown Hartford. He also objected to the $45 million allocated to the Municipal Redevelopment Agency, which has not yet been established and board members are not yet appointed.
“I struggled with it,” France said of his vote, “because I did appreciate the Preston money. That’s a priority the state should have, although it hasn’t been a priority to the new administration.”
France and Somers co-signed a letter to Lamont on Feb. 28 asking that the Preston funding request be included in the bond package.
The Senate vote came 10 minutes before the start of Wednesday evening’s Preston Redevelopment Agency meeting, and some members spent three hours prior to the meeting watching the Senate bond package debate on CT-N. There was no discussion on the Preston funding during the debate.
First Selectwoman Sandra Allyn-Gauthier congratulated the PRA on Wednesday night and thanked them for their work and persistence in getting the 393-acre property cleaned.
PRA Chairman Sean Nugent said the agency needs to wait for the Bond Commission action before ramping up the cleanup, and first would need to work out an agreement with the state Department of Economic and Community Development and the Department of Energy and Environmental Protection on the cleanup procedures.
The final remaining cleanup is expected to cost $9 million, including the $7 million state grant through the Bond Commission and the town’s preapproved, low-interest state loan for $2 million. Nugent said the plan is to use the first $5 million of the grant, putting the remaining funding in escrow, and try to reach an agreement with state environmental officials on the extent of the cleanup needed.
Nugent said the town could hold planning meetings with DEEP to be ready to go upon Bond Commission approval.

Several Old Lyme neighborhoods to receive water line upgrades
Mary Biekert
Old Lyme — The Connecticut Water Company is bringing new water lines to several beach communities this year, including Sound View, where work began this week.
The company recently completed improvements in White Sand Beach, and is moving on to upgrade Sound View, Old Lyme Shores and Wildwood. The work consists of installing full-depth water main lines to replace seasonal shallow-depth lines that are, in some cases, more than 90 years old.
The improvements will allow for consistent, year-round water supply to hundreds of homes — many of which only receive water seasonally, Daniel Lesnieski, infrastructure rehabilitation manager for Connecticut Water, said by phone last week.
This project also will help conserve water by replacing old pipe with newer ductile iron pipe that is less likely to leak, he said.
The projects, outlined as part of Connecticut Water’s recent merger agreement with San Jose Water, will fund the new pipes and construction through the company’s Water Infrastructure and Conservation Adjustment program, which places a small surcharge on customers' water bills to pay for water projects throughout the state. Existing customers will not see changes to their bills, said Dan Meaney, director of public affairs and corporate communications for Connecticut Water.
Those already receiving water from Connecticut Water in Sound View and other beach neighborhoods won’t be charged to hook up to the new lines. However, prospective new customers face a bill of about $1,500 to $2,000 to run a line from their home to the main. Seasonal water customers intending to directly hook up to the new full-depth pipes must also receive approval from the Department of Public Health to do so.
“In the end, what we will have is that everyone will be tied to a new or existing full-depth water main and all the seasonal mains will go away,” Lesnieski said.
In Sound View, Connecticut Water began this week laying down more than 5,000 feet of new 8-inch water mains along the upper portions of Swan and Portland avenues, and on the extensions of Portland, Hartford and Swan avenues north of Route 156, as well as North Lane. Construction will continue until May 22, take a break over summer and begin again Sept. 7.
The Old Lyme Shores project will begin March 23. Streets impacted there include Billow Road, Brightwater Road, Bellaire Road, Saltaire Drive, Sea Spray Lane, and North Lane. The work is expected to be completed by the end of this year, Meaney said.
A separate project to replace about 3,400 feet of nearly 40-year-old water main in the Wildwood neighborhood just west of Rocky Neck State Park also began last week. Construction will occur on Wildwood Drive, Oak Ridge Drive and Fox Chase Lane and is expected to be completed by the end of June.
Though not related, these projects come as several beach neighborhoods, including Miami Beach Association, Old Lyme Shores Beach Association and Old Colony Beach Association — all chartered beach neighborhoods considered separate municipalities from the town — and the town in Sound View, have been planning sewer projects after the state mandated upgrades to resolve groundwater pollution. Those projects tentatively are scheduled to begin later this year.
The beach associations and town have been coordinating with Connecticut Water officials to organize how pipes from the sewer project might underlay or avoid water pipes, Lesnieski said.
“They are going to have to work around us in certain areas, because in a lot of cases, (the sewer lines) are deeper than the water main,” he said. “But we did coordinate the design with the town consultants on that. We are staying on one side of the road and they are planning to lay down pipes on the other side of the road.”
The water line projects also are being designed so as to not drastically disturb sidewalk renovations on Hartford Avenue completed in 2018, Lesnieski said.
First Selectman Tim Griswold said the water upgrades are being seen as a positive improvement for those who live in the affected beach neighborhoods. “There is no sensitivity about getting the water upgrade. There isn’t going to be any opposition to that,” he said. “I think most residents are happy about the water situation, especially considering that they don’t have to pay for the piping and all.”
He added that he did not have concerns about a significant number of residents potentially converting summer homes into year-round homes after both water and sewer upgrades are completed.
“I don’t think it’s a big issue," Griswold said. "When we look back at Point O' Woods (whose sewer project was completed in 2008), some residents were saying, ‘Oh my god, you have 425 residents who will become year-round residents and we are going to see a huge population and lots of children, etc.' Well, it really hasn’t happened."
"Yes, a few people have upgraded their houses and so forth but the school population did not increase at all. So, I think here, again, a lot of these properties have been owned by generations of the same occupants and will want to keep them as summer places. Every year that goes by, the homes become more valuable and the taxes are more, so it becomes more difficult to consider it a second home."