Archive for the ‘Municipal’ Category

0Jackson Labs avoids local approvals as a ‘state project’

Construction on the Jackson Laboratory facility in Farmington is well on its way to completion thanks in part to unique treatment of the project: the lab didn’t need any local approvals.

The Jackson Laboratory for Genomic Medicine will receive a $297 million subsidy from the state. Gov. Dannel Malloy has touted the project for its economic-development potential.

If all goes according to plan, the time between legislative approval and grand opening will be almost exactly three years.

In addition to the monetary benefits from the state, treating the lab as a “state project” allowed to it to avoid the time-consuming and costly land-use process faced by other developers. Instead, the project received state approvals.

Mike Hyde, the nonprofit lab’s vice president of external affairs and strategic partnerships, said another developer “would follow the exact same process that we are” – if it was building on state property and had state financial support.

“I don’t know if one is more stringent than the other,” Hyde said. “I couldn’t say it was a privilege because I don’t know what the other experience is like.”

According to a March 2014 update on the project, JGM received about $9 million in state money for research, training and other reimbursable expenses.

By the end of 2013, JGM spent $64 million on construction out of $135 million budgeted. The state gave JGM a $192 million forgivable construction loan.

According to hiring projections, the subsidy amounts to about $42,000 per job per year.

The General Assembly approved Malloy’s incentives for JGM in October 2011. The new law designated Connecticut Innovations, the state’s venture capital fund, to manage the state’s relationship with JGM.

Connecticut Innovations signed an agreement with JGM in January 2012.

JGM awarded the contract to manage construction of the 183,500 square foot lab in January 2013.

Hyde said the lab plans an Oct. 7 grand opening.

In order to maintain its incentives JGM needs to reach 300 employees within 10 years. Hyde said the building could fit up to 320 people. “We’ll hit the 300 employee mark sooner than we had imagined,” Hyde said.

Hyde said JGM has 79 employees in about 11,000 square feet of temporary space and is looking for about 35 new employees. “We’re adding people at a lively clip,” he said.

Some University of Connecticut employees count toward JGM’s hiring goals.

The legal principles that allow JGM to avoid local land-use regulations are the same that allow a contractor for the Department of Transportation to build a road for the state without local approval. These principles have expanded greatly. In 1959, Attorney General Albert Coles wrote an opinion giving the state the ability to give an airport hotel on state property a liquor license instead of following local regulations.

“Therefore, it is my opinion that the airport operation constitutes a governmental function serving the public need and by virtue of its nature is immune to the zoning power of the Town of Windsor Locks,” Coles wrote a half-century ago. “The hotel with a liquor permit would be in furtherance of, rather than a deviation from, the essential airport use and, therefore, exempt from the zoning regulations of the Town of Windsor Locks.”

Update: This  post was updated to clarify that JGM did obtain state-level approvals for construction in place of local approvals.

0No strong link between funding and use at Connecticut libraries

Cities and towns across Connecticut spend a wide range of taxpayer money to support local libraries, from Greenwich’s nearly $9 million to Norfolk’s $1,000.

Despite Norfolk’s small investment, it leads the state in visits per resident, according to 2012 data compiled by the Connecticut State Library. Official data for 2013 will be available on the State Library website later this month.

On average, Norfolk’s residents visit the library nearly twice a month.

(Learn more about libraries across the state here.)

Greenwich does have an engaging library with residents visiting 15 times a year on average. Since it contributes a lot more than Norfolk, Greenwich pays about $9 per visit while Norfolk pays a few pennies.

Based on taxpayer cost per visit, the most expensive libraries are Hebron ($17.57), Middlefield ($16.40), Woodbridge ($16.02), Bridgeport ($14.78) and East Hartford ($13.86).

After Greenwich, Hartford appropriates the most taxpayer money to its libraries, $7.9 million, followed by Stamford ($7 million) and Bridgeport ($6.7 million).

Fairfield, Westport, Norwalk, New Haven, Darien and West Hartford spend between $3 and $4.5 million on their libraries.

Another 10 towns spend between $2 and $3 million: Manchester, New Britain, Stratford, Middletown, Wallingford, Wilton, Newington, Waterbury, Farmington and Meriden.

Taxpayers fund all of their library operating costs plus other some additional expenses – in other words more than 100 percent of the library’s operating costs – in 19 towns. Salem’s library is funded at 150 percent of operating costs, followed by Bridgeport, Mansfield, Goshen, Glastonbury, Andover, Avon and Bethlehem. The other 11 towns fund their libraries between 100 and 102 percent.

Norfolk funds the smallest percentage of library operating costs, less than 1 percent. Torrington funds about 4 percent.

Wealthier towns tend to spend more on their libraries on a per capita basis. Westport spends the most, $157 per resident, followed closely by Darien, $153. Greenwich and Wilton spend $10 and $20 less per resident, respectively.

New Canaan, Farmington, Woodbridge, Avon, Easton and Newington spend between $75 and $95 per resident.

Another 11 towns spend more than $60 but less than $75 per person: Fairfield, Bloomfield, Madison, Waterford, Hartford, Durham, Old Saybrook, Wethersfield, Woodbury, Roxbury and Middlefield.

Four Connecticut towns don’t have their own libraries, Barkhamsted, Bozrah, Colebrook, and Lisbon. Instead they contract with other towns. According to the State Library, Barkhamsted and Colebrook contract with Winsted, Bozrah contracts with Salem and Lisbon with Griswold.

0Bridgeport Housing Authority faulted for ‘Cadillac’ employee health plan

Federal watchdogs faulted the Bridgeport Housing Authority Tuesday for improperly charging $1.7 million to Washington and for giving employees a “Cadillac” health plan.

The U.S. Department of Housing and Urban Development Office of the Inspector General raised the issues in a report.

HUD identified $895,000 of federal money used for ineligible purposes and $790,000 of improperly documented expenses. The federal agency will seek to get the money refunded.

A Cadillac health plan costs more than $10,200 each year for individuals or $27,500 for families. Starting in 2018, insurance companies will include a 40 percent excise tax on such plans as a result of the Affordable Care Act, also known as Obamacare.

“Paying the additional tax would result in fewer funds for housing,” the report said.

Investigators found the housing authority had limited itself “to one vendor and a specific plan” through its collective-bargaining agreements. Authority officials told HUD its health care plan “was generous compared with those of other authorities and private businesses.”

Authority officials are trying to remove the restriction or join the state health care plan, according to the report.

The report also found ”a prior executive director promoted all of the janitors to maintenance aides without ensuring they had the skills to perform their new duties.”

1Brookfield breaks the law and violates charter by accounting like the state

The Brookfield Board of Finance reviewed a draft audit Wednesday showing the town’s schools used improper accounting to hide overspending in the past two fiscal years amounting to $1.1 million.

The town’s auditors from Mahoney Sabol & Company said the schools are in the process of undoing $471,000 in excess spending from the 2013 fiscal year by obtaining a credit from Cigna for that amount.

More than $700,000 in excess spending from the previous year remains. The board will have to decide whether to raise taxes or spend down its fund balance to pay for the unbudgeted expenses.

The auditors, new to the town, found school officials had pushed expenses out of the current fiscal year and into the next.

For example, in 2012 and 2013 the board of education paid for 11.5 months of health insurance instead of a full 12 months, according to the auditors. Since the board only accounted for paying for 23 months of insurance during a 24-month period, it underreported spending. This allowed the board of education to spend more than its appropriation.

“The material noncompliance appears to be due to the board of education’s business office operating under the past practice that any excess costs over budget pertaining to the prior fiscal year could be paid from the subsequent fiscal year appropriation,” the auditors wrote in a draft report. “As such, the need for an additional appropriation was never considered by the business office.”

Board of finance chairman Phillip Kurtz said the town’s boards would need to work together to resolve the problems. “It comes down to one bottom line,” he said.

The practice of pushing expenses into future periods is something many families do at home since they use cash accounting instead of accrual accounting. Cash accounting considers money spent when it changes hands. Under accrual accounting money is spent when goods and services are provided. That is why it is impossible under accrual accounting to pay for less than one year of health insurance each year.

“This is like operating a mom and pop,” said Ernie Nepomuceno, board of finance vice chairman. “This is pretty serious from my perspective.”

The state requires municipalities to use accrual accounting, but uses a different system for itself, modified cash accounting.

For years, governors and the General Assembly used accounting gimmicks to make Connecticut’s budget appear balanced. They made the fiscal year longer when it came to collecting taxes and shorter when it came to paying bills.

As both Brookfield and the state have learned, this works in the short term, but has long-term consequences. An expense pushed into next year makes the next budget that much more out of balance.

The state’s current gap is $1.1 billion. That’s the price tag for adopting accrual accounting and Generally Accepted Accounting Principles as Gov. Dannel Malloy has promised to do.

According to the board of education’s comments in the draft audit, unexpected costs in three areas led to the overspending.

For the two-year period, special education costs exceeded the budget by $427,840, substitute staff costs by $424,925 and health insurance premiums by $340,486.

To alleviate the overspending, the board of education negotiated a one-time credit from its health insurer, Cigna, for $471,262 or the equivalent of the June 2013 monthly premium. The credit is “based on a strong and positive business relationship,” according to the board of education comments in the draft audit.

0Study: New Haven spends more on pensions than other Connecticut cities

A review of 173 cities across the country shows where five of Connecticut’s largest cities stand according to one measure of pension cost.

New Haven ranks 27th and spent 10.2 percent of revenue annually on pensions, according to a study by the Center for Retirement Research at Boston College,. The average across the sample is 7.9 percent, meaning New Haven has an above-average pension cost.

Newly-elected New Haven Mayor Toni Harp, a Democrat and state senator, said during the campaign she supports pension reform.

Measuring pension costs as a share of revenue can shed light on how expensive a city’s pensions are. However, it is only one measure. If one city taxes more aggressively than another – or uses more aggressive actuarial assumptions – it could appear to be lower-cost yet actually provide more expensive benefits.

How much a city pays for pensions today is also a function of how much it failed to pay in the past.

Chicago and Little Rock, Arkansas, lead the list spending 17 and 17.6 percent of revenue on pensions.

At the other end of the spectrum, Greenwich ranked 163rd and spent only 2.2 percent on pensions. Hartford (143) and New Britain (139) also had below-average costs, 3.6 and 3.8 percent, respectively. Bridgeport spends slightly more than average, 8.6 percent, and ranks 43rd.

The center researchers use the costs as determined by actuaries rather than what cities actually pay to measure pension costs. A study by the Census Bureau using actual payments puts the average at 5.6 percent because many cities underfund their pension systems.

Two Connecticut cities in the study send some of their pension contributions to state-run plans, Bridgeport, about one-fifth, and New Britain, more than two-thirds.

0Donated billboard promotes Bridgeport mayor on Twitter

Bridgeport Mayor Bill Finch is looking for followers on Twitter and he is using billboard space donated to the city to recruit them.

The billboard, visible from I-95, promotes Finch’s account, @MayorBillFinch.

“The billboard space is provided to the city as free advertising space by Webster Bank Arena,” said Elaine Ficarra, spokeswoman for Finch.

“The Twitter followers would remain property of the City” after Finch leaves office, she said.

1Garage sale: Hartford used parking money to balance budget last year

State officials recently purchased Hartford’s Morgan Street garage, paying significantly more than its appraised value, in a move that results in a better financial picture for the Hartford Parking Authority.

Last year, the city took $1.2 million from the authority’s savings for future repairs in order to balance the budget. For the current fiscal year, Hartford is using $8.3 million from its own savings to cover a budget shortfall.

The $1.2 million removed from the renewal and replacement reserve left the HPA with another $1.2 million in the reserve as of August, according to Chief Financial Officer John Michalik.

Michalik said the sale also reduces the city’s need to contribute to the reserve each quarter from $171,000 to $98,250. Over the next year, the HPA will save $291,000 in payments to the reserve because of the garage sale.

Critics of the deal like Sen. John Kissel, R-Enfield, have suggested the state overpaid in order to help Hartford. Two appraisals done for the state confirm the garage is worth considerably less than the state paid for it. Sen. Tony Guglielmo, R- Stafford, called the sale “a sweetheart deal.”

According to the Hartford Business Journal, the city was losing more than $600,000 a year on the garage. Although the garage generated an operating profit, the city is still paying off the bonds issued to build the garage.

The appraisals put the value of the garage at no more than $9 million.

“While these figures are helpful guides they do not reflect the reality that the city is not able to sell the garage for less than the amount of the outstanding bonds; that figure is the $23.25 million sales price,” Ben Barnes, secretary of the Office of Policy and Management, said in a letter to Kissel.

0Hartford cuts spending but taps reserve to cover deficit

Hartford plans to spend $1.5 million less in the new fiscal year, but the city will need to use $8.3 million in savings to make up for an even larger decline in state aid.

The city will spend just under $539 million while revenue will decline to $530 million, according to the city budget for fiscal year 2013-2014.

The mismatch in the spending reduction, about .3 percent, and the drop in revenue, nearly $10 million or 1.8 percent, results in a shortfall. The city will cover it by reducing its fund balance, currently $26.6 million, leaving just $16.3 million.

“This was done to avoid a mill rate increase and will still leave us with a reserve greater than New Haven and Bridgeport,” Mayor Pedro Segarra said in his budget message.

The budget, released in early August, predicts that spending will decrease in areas such as operating expenses and debt service. Both education and library spending are expected to remain flat for the “foreseeable future.”

Almost half of Hartford’s revenue is expected to come from property tax. Just over 45 percent will come from intergovernmental revenue. This percentage is not expected to increase due to “financial stress” on the state budget.

The city’s mill rate will remain the same for the second year in a row.

Unlike the rest of Connecticut’s cities and towns, which tax property based on 70 percent of its market value, Hartford taxes property in three tiers. The city assesses businesses and cars at the normal 70 percent rate, while it taxes apartment buildings on 55 percent of market value and homeowners on 29.2 percent.

Property tax revenues are expected to rise by $5.3 million or 2.1 percent. Revenues from city fees are expected to rise, too. The combined effect of the tax and fee revenue growth is only to mitigate the loss of $22.7 million in state aid.

Hartford plans to spend $283 million — more than half of the budget — on education. Education spending will stay flat because the city expects to receive Alliance Grants. As the grants grow by $4 to $5 million per year over five years, education spending will rise in the future.

The next highest expenditure category is benefits and insurances, at 14 percent of the budget. This segment of the budget is scheduled to increase more than 22 percent, with pension contributions up $4 million and health insurance costs up nearly $10 million.

Jordan Otero was a summer 2013 Yankee Institute journalism intern. She is a senior studying journalism at Franciscan University of Steubenville. She lives in Southington.

0Zero equals 50 at Southington’s middle schools

Southington’s two middle schools will no longer give a student a grade below 50 on a test or quiz – unless the student refuses to take part. In that case, the grade is 45.

“A teacher may include a comment when entering that grade as a default indicating what the actual grade was. i.e. Student actual score was a 38 however school default policy is a 50,” a document outlining the policy says.

Superintendent Joseph Erardi Jr. said this type of grading is “prevalent throughout most, if not all, middle schools.” He said it is about “students having the opportunity to turn around a woeful performance.”

Erardi said a student who receives some really low scores, like a zero or a 10, has a chance to do well if they improve their performance under the minimum grading policy. The old policy was “almost a disincentive.”

A group developed the policy on behalf of both middle schools, according to Erardi. “I personally think they landed in a good spot,” he said.

Instead of retaking tests or quizzes to earn a higher grade, teachers can “re-teach” the material until the student raises his or her 50 to a 70.

“Both schools agree that extra credit and bonus points lead to grade inflation and will now offer up the term of  enrichment for students wishing to learn more,” the policy continues. “This will not be counted within a marking period grade.”

“There needed to be a calibration on extra credit,” Erardi said, explaining it didn’t make sense to allow students, for example, to bring a failing grade up as high as a 90.