Christopher Keating
As an FBI investigation and audits continue, state officials
told legislators Monday that they are making wide-ranging improvements in the
scandal-plagued school construction program that has been allocated more than
$1 billion since 2018.
Officials are hoping that an external auditor can complete
an initial report in April so that the legislature could take action, if
necessary, before the regular session ends on May 4. The program’s internal
auditors were also moved to “an arms-length distance’' from the school
construction office and now have direct access to the commissioner. The first
move was switching the program and its employees back to the nonpartisan
Department of Administrative Services instead of the governor’s budget office,
which is seen as more partisan.
The changes have been made since Gov. Ned Lamont last year
fired deputy budget director Kosta Diamantis, a former Democratic legislator
who oversaw school construction, after questions were raised about how
contracts were awarded for school construction. A red flag came when chief
state’s attorney Richard Colangelo hired the daughter of Diamantis for a state
job paying $99,000 per year as an executive assistant at the same time that
Colangelo was seeking pay raises for fellow prosecutors and himself.
After a joint meeting of the finance and education
committees Monday that lasted 2 1/2 hours, Republicans said there were still
many unanswered questions. Democrats, however, said those would be answered
later by the various ongoing audits and investigation.
Local officials around the state, including Tolland,
Bristol, Groton, and New Britain, say they had been directed to hire certain
contractors in recent years in order to speed their projects and receive state
reimbursement of millions of dollars. The state has recently told local
officials that they will not honor the higher reimbursement rates that had been
promised by Diamantis for renovations in Stamford, as well as at Bulkeley High
School in Hartford and Farmington High School. The difference that the
communities would need to cover are $16 million in Hartford and more than
$900,000 in Farmington.
Lawmakers are already considering writing special
legislation to help those communities to receive additional reimbursements that
they had been promised.
During Monday’s forum, top officials said they have been
working constantly over the past four months to reassure lawmakers and school
boards that the program will be run strictly by the law. State employee Noel
Petra, who serves as deputy commissioner overseeing the program, said employees
have been working long hours to let local officials know they can have
confidence in the program.
“We feel like we have made a big improvement in our policies
and procedures,’' Petra told lawmakers. “We’ve had meetings with dozens of
districts, dozens of legislators ... to clarify, to help. It’s a critical part
of what the state does. We’re working all week long, including weekends, to
help.’'
But Rep. Holly Cheeseman, the ranking House Republican
member of the tax-writing finance committee, said that legislators must “talk
about how this never happens again’' and that taxpayers’ money is “spent in an
appropriate, above-board and transparent manner’' in the future.
“Who is providing oversight?’' Cheeseman asked. “It’s
obvious there are failings here.’’
During the hearing, she said she was frustrated that not
enough information was being released.
“An audit of an audit is not filling me with a great deal of
confidence,’' Cheeseman said.
Rep. Bobby Sanchez, a New Britain Democrat who co-chairs the
education committee, said he wanted to make it clear that he was opposed in
2019 when the school construction program was moved to the governor’s budget
office when Diamantis was appointed as deputy commissioner.
Republicans were concerned about Monday’s hearing, noting
that it was overseen by two Democratic-controlled committees. Instead,
Republicans said that a special committee should have been established in the
same way as those that investigated former Gov. John G. Rowland and former
Senate Republican leader Lou DeLuca, who both resigned during the
investigations.
Democrats, though, rejected the idea, saying that the
existing committees have the proper jurisdiction over various aspects of school
construction. Since various audits are still ongoing, state Sen. John Fonfara
of Hartford said that Monday’s forum could be seen as “premature’' with many
questions still unanswered.
Rep. Sean Scanlon, a Guilford Democrat who co-chairs the
finance committee with Fonfara, said that the officials have spent months
working “to safeguard this program and preserve the integrity of it.’'
But Rep. Christopher Ziogas, a Bristol Democrat, said he
wanted to remind legislators that no one has been arrested in the ongoing
process.
“Some of the people who are making the statements about
reform are the same people who were supposed to be in charge,’' Ziogas said.
Rep. Tammy Nuccio, a Tolland Republican, asked if there were
“any red flags raised by the department’' when the school construction office was
moved in 2019 to the governor’s budget office.
“At this point, I have absolutely zero confidence that the
state is auditing itself,’' Nuccio said. “We need an outside, independent
auditor. I’m not comfortable with what the state is saying that this will not
happen again.’'
At a hearing over school construction scandal, the scandal was off limits
A special legislative hearing Monday explored new and
tighter controls imposed over state-financed school construction while
studiously avoiding any discussion of why the changes are necessary.
By design, the hearing shied from the circumstances
surrounding allegations that a former state official, Konstantinos Diamantis,
pressured municipalities to hire certain contractors on local school
construction projects.
Frustrating some lawmakers, underway at the Office of School
Construction Grants & Review, a unit of the state Department of
Administrative Services.
Michelle Gilman, who was named commissioner-designate of DAS
on Feb. 1, a day before the disclosure the FBI had subpoenaed documents related to
Diamantis, answered no questions about Diamantis.
Diamantis was fired on Oct. 28 as the deputy secretary of
the Office of Policy and Management, a political appointment, and removed from
his civil-service job as the director of school construction grants.
[The Kosta Diamantis timeline]
“Can you just simply tell us in your own opinion, what went
wrong here?” Sen. Henri Martin, R-Bristol, asked Gilman in the closing minutes
of a two-and-a-half-hour hearing.
“I’m sorry, can you elaborate?” she replied.
“You’re here for a reason. And we’ve read a lot of different
things,” Martin said, referring to news
stories. “In your opinion, can you tell us what went wrong?”
“My concern is moving forward,” she replied.
Gilman and Noel Petra, the deputy commissioner of real
estate and construction services, were the only witnesses to testify at an
invitation-only hearing of the legislature’s Education Committee and Finance,
Revenue and Bonding Committee.
Rep. Sean Scanlon, D-Guilford, co-chair of the finance
committee, said the intent was to explore how DAS is assuring municipalities
that school construction hiring is a local decision, not the state’s, and what
new controls are in place over the administration of school construction
grants.
Rep. Sean Scanlon, D-Guilford, co-chair of the finance
committee, said the intent was to explore how DAS is assuring municipalities
that school construction hiring is a local decision, not the state’s, and what
new controls are in place over the administration of school construction
grants.
“It’s more of a dog-and-pony show than it is about getting
to the bottom of this and trying to prevent this from happening again. I don’t
have any confidence that DAS dealt with this issue swiftly when they knew
about it,” Candelora said.
From November 2019 until shortly after Diamantis’ dismissal,
the school construction office moved with Diamantis from DAS to the Office of
Policy and Management. No municipal official alleged pressure from Diamantis
until after his dismissal, though a contractor had complained in 2020 about what he
considered interference in hazardous abatement contracting.
“To be frank, I thought a large part of it was a waste of
time,” said Rep. Holly Cheeseman, R-East Lyme, ranking Republican on finance.
“Because we weren’t given the opportunity to address people whom I think could
have weighed in more constructively.”
Cheeseman said neither Gilman nor Petra could answer
questions about why the administration of Gov. Ned Lamont agreed to move the
school construction function to OPM.
The one moment of drama came from Rep. Tammy Nuccio,
R-Tolland, a member of the town council in Tolland when the town constructed a new school under an emergency declaration to
replaced one deemed structurally unsound. Nuccio said she resented Petra’s
assertion that municipalities were the final word on hiring.
Nuccio described Diamantis as saying, “I own this project.”
“And when I have this same person saying, ‘Here’s your team,
here’s who you will work with or you will lose emergency funding status, or you
will run over [budget] and then the town is going to have to pay more.’ When
I’m hearing those things, the fox is in the hen house,” Nuccio said.
Nuccio, a member of the finance committee, did not say
whether she believed at the time that Diamantis had exceeded his authority or
if she complained of his remarks. She could not be reached immediately after
the hearing, which was conducted via video conferencing.
Diamantis, in a telephone interview, said he frequently
asserted a strong state interest in school projects where the state was paying
more than half the budget.
“But never ever, ever did we get involved with selecting
contractors or getting involved in bidding,” Diamantis said.
Tolland, as a rare emergency project, was exempt from
competitive bidding. But Diamantis said the contractors were selected locally,
as was the case in the other places he has been accused of exerting undue
influence.
There is no way, he said, for a single state official to
dictate selection of a contractor.
“Keep in mind, the influence would have to influence
superintendents, building committees, city councils, mayors, depending on what
their system is and what their setup is,” Diamantis said.
Diamantis, a former Democratic state lawmaker from Bristol,
had a defender at the hearing: Rep. Chris Ziogas, D-Bristol, a family friend
and relative.
“I just wanted to remind the panel that nobody’s been found
guilty of anything yet. And we’re talking about reforms and making aspersions
on people as to what might have gone wrong, when nothing’s been demonstrated as
actually gone wrong,” Ziogas said.
Ziogas had accompanied Diamantis’ daughter, Anastasia
Diamantis, when she was interviewed for an ethics inquiry related to the circumstances under which she was hired as an executive
assistant to Chief State’s Attorney Richard Colangelo Jr. while
Colangelo was lobbying Diamantis and others for help securing raises for
prosecutors.
The Office of School Construction Grants & Review is
back at DAS, temporarily overseen by Petra while a new director is recruited.
Gilman and Petra said one of the changes made is separating
internal auditors from the purview of the director of the school grants office.
A contract with a firm to conduct an external audit is expected to be signed
this week.
“They’re actually going to be reviewing the audits. So it’s
an audit of the audits,” Gilman said.
Petra was cut off when he began to comment on Diamantis.
“You will never find me in a conversation where I’m
defending the former director,” Petra said. “There were certainly —”
“Mr. Petra, Mr. Petra, I caution you in terms of where you
may be going with this,” said Sen. John Fonfara, D-Hartford, the other finance
co-chair. “There are investigations happening, and those folks who are
responsible for that will make determinations as they are completed.”
Fonfara said after the hearing that he understood the
frustration of committee members about the ground rules for the hearing.
As for Martin’s final query of Gilman about what went wrong,
Fonfara said it was a good question, as were others about what preceded
Diamantis’ departure.
“They’re legitimate questions. Given the scope of this
meeting or hearing, they are not within bounds,” Fonfara said. “It doesn’t mean
they are any less important.”
School costs may soar: Reimbursements for state construction program out of line
HARTFORD — State legislators were told Monday that
incorrectly calculated state reimbursement rates for school construction
projects could add millions of dollars worth of additional local costs.
Members of the Education and Finance, Revenue and Bonding committees
were also informed Monday that the school construction funding program was
riddled with problems that went uncorrected for years until a federal criminal
investigation became known to the Lamont administration last October.
“We found everything from small issues that were easily
rectified to large issues that we have to correct,” said Noel Petra, a deputy
commissioner of real estate and construction services of the state Department
of Administrative Services.
Sadly, he said one of the big outstanding problems is
promised state reimbursement rates that were higher than statutorily allowed.
Towns and cities that received incorrectly calculated
reimbursement rates potentially face millions of dollars in additional costs
unless the state legislature and Gov. Ned Lamont intervene.
In addition to the town of Farmington and the city of
Hartford, Petra advised the two legislative cities that state officials have
also determined the city of Stamford received reimbursement rates for certain
costs that were out of line with state rules.
The town of Farmington received a revised rate for part of
its’ Farmington High School project that could cost an additional $915,000 that
was not budgeted, and Hartford could face an additional cost of $16 million for
its Bulkeley High School project.
MORE TOWNS AND CITIES LIKELY FACE the same financial
predicament between ongoing reviews, audits of previous project audits, and the
findings of an outside forensic audit going back to 2018 that are expected in
April, DAS Commissioner Michelle Gilman cautioned legislators Monday.
This lookback will include the $44.9 million Oxford Middle
School project, the nearly $160 million Torrington High School and Middle
School project, and the $17.4 million Mary P. Hinsale School project in Winchester.
In a departure from past policy, Petra said DAS offered not
only the agency’s support, but also its’ help to draft supplemental funding
requests for Farmington, Hartford and Stamford to make up the difference
between the promised and statutorily permitted reimbursement rates.
In an interview Monday, House Speaker Matt Ritter,
D-Hartford, said he anticipates the annual school construction bill will make
provisions for all affected school construction projects once the Lamont
administration presents a list of the projects and identifies a dollar amount.
“I actually don’t think the amount of money will be that
high at the end of the day. But it is still a lot for these communities, so our
job is to make them whole,” he said.
Ritter added, “You have to remember, too, that in the middle
of a project to claw back money they have a set authorization in some cases.
Farmington went to referendum. They can’t just increase their budget all of a
sudden without having to go back to a referendum of some kind. So, there are a
lot of local issues, especially in the smaller communities that use referendums
that make it more complicated to just say, ‘Hey, you owe us more money.'”
During a swing through Naugatuck Monday, Lamont said he is
open to providing offsetting state funding for towns and cities suddenly facing
additional local costs through no fault of their own.
“It makes sense. I have got to get into the details,” he
said. “It makes sense, though, if the state made promises, these guys have a
budget around promises, or contractual things we have said. I really think we
have to honor that, don’t we?”
Lamont said he needs to consult more with Petra and other
administration officials on how that could be accomplished and how much it
would cost.
PETRA TOOK OVER the state’s Office of School Construction
Grants and Review after the former top state budget official in charge,
Konstantinos “Kostas” Diamantis, a deputy secretary of the state Office of
Policy and Management, left state service last October, eight days after state
officials received a federal grand jury subpoena for documents involving
Diamantis and hundreds of millions of dollars in state spending.
Some local officials have been quoted in news reports that
they felt pressured by Diamantis to hire certain contractors for school
projects. Gilman said towns and cities can always rebid contracts if there are
concerns about alleged contract steering or other improprieties.
Diamantis and his lawyer have denied any wrongdoing on his
part, and no criminal charges have been filed in connection with the ongoing
federal probe of the school construction program, upgrades at the state pier in
New London, and hazardous material abatement projects.
Diamantis was first placed on paid leave last Oct. 29 as a
result of a preliminary investigation into the top state prosecutor’s hiring of
one of his daughters, and then he resigned and retired that same day.
Republican minority leaders protested that the hastily
scheduled joint committee forum Monday was no substitute for the type of
bipartisan oversight hearings that the House and Senate Republicans say are
necessary to investigate alleged wrongdoings involving taxpayers’ money.
Republican legislators participating in Monday’s
two-and-a-half-hour hearing reiterated that complaint, including Sen. Paul
Formica, R-East Lyme, the deputy Senate GOP leader.
Sen. Henri Martin, R-Bristol, the ranking Senate member of
the Finance, Revenue and Bonding Committee, was frustrated because he believed
Gilman evaded his final question of the hearing asking her what went wrong with
the school construction funding program.
“I don’t know if I heard what I was hoping to hear, but it
seems like, from what I can piece together from the information that I heard
today, the ball was probably dropped and dropped in multiple ways,” Martin
said.
“I don’t know if it is clear. I see the slide deck, but I
don’t know if it addresses how the ball the was dropped thoroughly, and I hope
I guess what we learn through various investigations that we’ll find how the
ball was dropped, and we’ll be able to fix those along with the suggestions
that you have proposed here in the statutes,” he continued.
Proposed Killingly power plant dealt another blow
It’s the end of the line for the proposed Killingly natural
gas plant as far grid operator ISO-New England is concerned, at least for the
immediate future.
Two rulings in the last two weeks, one by the Federal Energy
Regulatory Commission and the other by the U.S. District Court of Appeals in
Washington D.C., paved the way for the ISO to complete its recent annual
auction that determines future power sources for use by the New England grid.
The auction results will not include the Killingly facility,
as they have for the last several auctions.
It’s unclear whether Killingly’s owners, NTE, have
additional recourse to force the ISO to include the plant — and, if they do,
whether they would use it. The company did not respond to requests for
information.
Also unclear is whether after six years of planning, NTE
might abandon the project. Without a guaranteed market for its power, investors
could be disinclined to back the plant, though NTE has said in the past that
the plant’s financing is in place.
Killingly had become a cause celebre for environmental
advocates who argued the region needed more renewable not fossil fuel energy.
The ISO has argued natural gas generation improves the grid’s reliability. But
in winter, when gas is needed for heat and the grid operator has to turn to
dirtier oil and coal generation, environmental advocates have argued the use of
natural gas makes the grid less reliable. That is being underscored right now
as fossil fuel prices soar due to the war being waged by Russia in Ukraine.
Advocates, along with Gov. Ned Lamont and Department of
Energy and Environmental Protection Commissioner Katie Dykes, have also argued
that more non-renewable energy on the grid is counterproductive in terms of
slowing climate change and that it could cause the state to miss any number of
greenhouse gas emissions goals, including the governor’s executive order for a
carbon-free grid by 2040. The legislature failed to make that order into a law
last session, but it’s been refiled for this session.
The most recent turn of events began on Nov. 4 when the ISO asked permission from FERC to remove Killingly from
the February auction because NTE had missed required deadlines that would
ensure its development.
On Jan. 3, 2022, FERC approved the ISO’s request, saying: “Based on a review
of the record, including the confidential information provided by ISO-NE and
NTE, we find that the relevant condition for termination … has been met.”
NTE disagreed, saying at the time: “We are very disappointed
and do not agree with FERC’s decision. The Killingly Energy Center is important
for grid reliability, and we will continue to work to be the bridge for the
region’s carbon-free future.”
NTE asked for a re-hearing by FERC and took the matter to
court, which resulted in a ruling just days before the annual auction on Feb. 7, 2022, that
temporarily stayed FERC’s decision removing the plant from consideration.
The ISO ran the auction as scheduled with and without
Killingly but did not reveal the results to “protect the commercially-sensitive
information that might otherwise be revealed as part of the auction
finalization process.” They intend to release the results without Killingly
this week.
That’s because on Feb. 23, FERC denied the NTE request for a
rehearing and then on March 2, the appeals court dissolved the stay, after a
request from the ISO to end it — all of which allows the ISO to complete the
auction, but it doesn’t necessarily end the potential for building the plant.
While the state and especially Lamont have been blunt about
not wanting Killingly, under the current system there’s really no way for the
state to stop it. If all the criteria for permits are met, the state has to
issue them. In fact, Killingly has almost all its permits.
For several years now, the ISO has had the plant in its
future selections — which are made three years in advance. NTE could start over
and re-enter a future auction.
Dykes has been waging a decade-long fight to get the ISO to
change its rules for selecting power for the grid. And that effort is now facing a two-year delay in its
implementation from a year from now to three years from now.
In the meantime, advocacy groups continue to push for
policies that will allow the state to stop power plants it doesn’t want.
“The ISO-NE markets are moving on, and so should
NTE. The time for building more gas power plants is past,” Melissa
Birchard, senior regulatory attorney at Acadia Center.
Westport’s $4.5M sewer line project could alleviate flooding
WESTPORT — Flooding in Westport has been a constant
and increasing issue over the last few years. Officials are looking to
alleviate some of those woes by extending the town’s sewer system.
The Board of Finance recently approved a $4.5 million
two-part project to address the flooding. The first part costs $3.1 million for
sewer lines will add sewer lines to 124 homes along Evergreen Avenue, Evergreen
Parkway, Tamarac Road, Lone Pine Lane, Gorham Avenue, Compo Road North and
Brookside Drive.
A second appropriation of $1.4 million will add 37 homes on
Whitney Street, Roseville Road, Fernwood Road, Plumtree Lane, Pamela Place and
Ledgemoor Lane to the town’s sewer system.
Public Works Director Peter Ratkiewich said the project
serves areas that “badly” need it, as well as properties that are impacted by
the flooding of Deadman Brook. He said the larger project will be take 124
properties off septic and no longer put water in the the groundwater.
“It will certainly improve the soil conditions for those
properties that use dry wells,” Ratkiewich said. “That’ll make some room for
stormwater. That’ll make the situation a little bit better, especially in the
Deadman Brook watershed. That’s one of our goals, to reduce the water that goes
into the stream, by putting it underground and containing it until the storm
goes by.”
Ratkiewich said while the town will initially appropriate
the money, Westport will recoup the funding from property owners once the work
is done.
He said the project would be “benefit-assessed” to all those
served by the sewer, meaning the town will take the number of properties served
and the cost of the project and equally divide it among the properties. The
cost would include construction, construction inspection, as well as a small
contingency in case of unfortunate conditions.
Ratkiewich said the preliminary benefit assessment for the
37-home project is approximately $36,000 per property with the 124-home project
around $39,000 per property.
A preliminary benefit-assessment hearing and a final benefit
assessment meeting will be held once the project is complete. He said most of
the time there is no trouble with residents paying the cost and typically the
project doesn’t use any contingency funding.
“We have found that some of the pricing we’re getting
post-COVID is a little wild, but that was sort of at the end of 2021,” he said.
“We’re hoping the market kind of stabilizes coming out of COVID and contractors
are getting back to normal. We should be getting more competitive pricing.”
He said, if needed, a 5 percent contingency should be
adequate.
“This project is going through some of the most variable
soils, soil conditions, that we have in town,” Ratkiewich said. “Ledgemoor
Lane, just from the name, there’s a lot of ledge. Whitney Street is one of the
wettest soil types in the whole area. We run the full gamut here.”
Both projects are expected to be completed by end of the
year.