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CT Construction Digest January 29, 2020

Plainville contractor sentenced to 20 months for stealing $3.3M from employees
Joe Cooper
The former owner of Plainville’s Ferguson Electric and Ferguson Mechanical Co. Inc. will spend 20 months in federal prison for bilking more than $3.3 million from his 300-plus employees, prosecutors say. Lee Furguson, 62, of Farmington, was also sentenced Monday in Hartford federal court to one year of supervised release and ordered to pay a $200,000 fine for stealing about $1.60 to $3.15 an hour from each of his employee’s fringe benefits as a “third party administrator fee” for the employees’ pension plans, the Connecticut U.S. Attorney’s Office said. Ferguson, who led the business from 1983 to spring 2019, pleaded guilty to one count of money laundering last July. He is free on a $50,000 bond, and must report to federal prison on April 28, authorities said. According to investigators, from approximately 2013 to 2017, Ferguson deducted money from employees’ hourly pay for their pension plans, but he instead diverted the money to TPA of Connecticut, a Florida company that he formed. TPA then sent the money to another Florida company Ferguson established, DJS Associates, which prosecutors said he created to perform business-consulting services for himself and his companies. However, Ferguson used the funds entirely for personal expenses, and the business did not provide any services. Through the scheme, Ferguson stole more than $3.3 million from more than 300 employees, prosecutors said. He has since made full restitution. Ferguson Electric was founded in the 1920s by Roy T. Ferguson and specialized in industrial and electrical services, according to the company’s website. His son, Thomas R. Ferguson, took over the business in 1948 before Lee Ferguson assumed leadership in 1983. Lee Ferguson resigned from the company last spring, and his son, Ryan Ferguson, assumed the role of president. Today, the company employs more than 150 full-time workers.  He has taken full and complete responsibility and at no time did anyone else at his former companies participate in or was aware of his actions or motives," a company spokesman said Tuesday. “Full restitution had been made to effected employees prior to his sentencing today.”


Fasano says tolls bill has loophole that could capture cars 
The top Senate Republican accused Democratic lawmakers Tuesday with building a “workaround” provision into the new transportation bill that would allow the General Assembly to expand tolls on large trucks to all other vehicles after two years.
Senate Minority Leader Len Fasano of North Haven also charged Democratic Gov. Ned Lamont with scaling back his proposed “debt diet” and endorsing more borrowing for various initiatives to “buy votes” for tolls.
“After two years, we could very well see cars and all trucks tolled in Connecticut without the fear of a bond covenant stopping it,” Fasano said during a late morning press conference. “That could happen.”
Also Tuesday, Democratic legislative leaders confirmed that Friday’s hearing on the tolls bill, set for 1 p.m. in the Legislative Office Building in Hartford, would be open to the general public as well as transportation experts and Lamont administration officials.
The only anticipated legislative support for tolls comes from majority Democrats in the House and Senate — some of whom insisted the bill provide special protections so that only large commercial trucks would be tolled, both now and into the future.
The proposed solution involved special language to be included in the bond covenants — the contracts between the state and investors who buy Connecticut bonds that are sold to finance various bridge and highway construction work.
The draft bill lawmakers are expected to consider next week — which was prepared in consultation with state government’s bond counsel — specifies only trucks will be tolled.
It also states that construction bonds issued over the next two years include language pledging the trucks-only policy would remain in place throughout 2030.
Fasano, who is an attorney, pointed out that this alone is not an absolute legal guarantee against change.A future legislature could refinance those bonds, paying them off early and replacing them with new financing that doesn’t include restrictive covenants. 
And while “that can be an expensive proposition,” Fasano argued there was a much easier, cheaper end-run around the covenant restriction.
Section 8 of the draft measure states the General Assembly can alter the rules “if and when adequate provision shall be made by law for the protection of the holders of such bonds.”
In other words, as long as the state’s ability to repay the bonds is protected, then Connecticut could change the rules about which vehicles it tolls.
How would making cars subject to tolls, which would only increase revenues to the state, make it harder for Connecticut to pay off its debts?, Fasano asked.
He also noted that the 2007 legislature approved bonding about $2 billion to shore up the teachers’ pension fund, pledging in that bond covenant not to alter the schedule of contributions to the pension system until those bonds were paid off, around 2032.
That all changed last May when legislators endorsed a proposal from Lamont and state Treasurer Shawn Wooden to restructure pension payments. The governor and treasurer asserted this would not violate the bond covenant provided Connecticut set aside an amount equal to the maximum yearly debt payment on the bonds, about $380 million.
 
 
Senators clash on trucks-only tolls before Friday public hearing

Senate Republican leader Len Fasano charged Tuesday that Gov. Ned Lamont is buying votes for electronic highway tolls by expanding and sweetening the state’s bond package that has been tied to tolls.
Lamont announced Monday that he had reached an agreement on the annual bond package of construction projects for $1.7 billion. The legislature’s vote on the bond package, which is normally passed at the same time as the state budget in June, has been repeatedly delayed over the past seven months as lawmakers squabbled about tolls. The latest proposal calls for truck-only tolls on 12 bridges across six highways stretching from Greenwich to Groton. “This toll was bought and paid for by taxpayers,” Fasano told The Courant Tuesday. “This governor has moved from his $1.4 billion, line-in-the-sand bonding to $1.7 billion. He took that $300 million that he didn’t want to do, and he bought votes for it. It’s the only way he can get it across the finish line. He had to buy off votes. It was supposed to be $1.4 billion with $100 million toward transportation."Fasano, an attorney, said Lamont made the move “to give out the goodies to get the votes. That’s why they never released [the bill]. That’s why they didn’t want us to know about it."
But Senate President Pro Tem Martin Looney, a New Haven Democrat, rejected Fasano’s assertions.
“The bond package at $1.7 billion, where it stands now, is not anything that we see as making any specific representation,” he said. “The bond package has not been agreed to in any final form yet, other than the overall number. ... The size of a bond act is, in many cases, irrelevant. What is relevant is what goes through the Bond Commission, and that continues to be something that will be negotiated month by month.” Fasano says the language in the 38-page toll bill is not tight enough — and would potentially allow tolls on cars in the future due to “a loophole the size of the Grand Canyon” and would allow more than the planned 12 toll gantries. But Max Reiss, Lamont’s chief spokesman, said Fasano and other Republicans are wrong. “To no one’s surprise, it’s an election year and with little to show for how they have helped move Connecticut forward, Republican legislators are reverting to the oldest play in the book: fear mongering — but Connecticut voters are smarter than that," Reiss said. “They know what this bill is and what it isn’t. This bill only authorizes tolls to be collected on heavy 18-wheeler and above commercial trucks, and explicitly prohibits tolls on passenger vehicles.” The legislature’s transportation committee will hold a public hearing on the latest toll plan starting at 1 p.m. Friday at the Legislative Office Building in Hartford. Lamont’s administration will start the hearing by giving a presentation to legislators, and both written and oral testimony will be accepted from the general public. Looney said the Senate is expected to vote Monday, while House members have been told to reserve Monday and Tuesday on their calendars for potential votes.
 
I don't know which is worse, the fact that Gov. Ned Lamont is planning in secret to spend probably millions of dollars more than the $35 million already promised for its share of a rebuild of State Pier for exclusive use by a rich Danish conglomerate, or that Connecticut lawmakers don't seem to care.
Worse, it appears the governor is agreeing to a blank check for overruns on a project first estimated at $93 million. Is the sky the limit?
Are lawmakers complicit? Uninterested? Mute? Whatever the handicap or reason for inertia, it is disheartening and seems pervasive among both Democrats and Republicans.
Don't any of them want to see something so important, expensive and long lasting deliberated in the open?
I have not heard one peep from a single lawmaker about plans revealed last week to have the scandal-crippled Connecticut Port Authority soon sign a new deal — negotiated in secret — for the controversial conversion of State Pier into a wind turbine assembly facility, with Connecticut taxpayers apparently pledged to funding cost overruns.
The little we know about this pending deal is all that David Kooris, Lamont's puppet chairman of the port authority, seated by the governor after leaving state employment, with an interim appointment due to expire before lawmakers can review it, has agreed to disclose.
Kooris said after a board meeting last week — in which the finished deal, with its undisclosed, escalating price, was discussed in executive session — that the board could vote on it at a February meeting or sooner.
Kooris suggested there might be a news briefing of some kind ahead of time but couldn't promise anything, certainly not an actual release of the documents.
Any lawmaker with a heartbeat, especially those representing eastern Connecticut, which is about to lose its public historical port, with ship traffic diverted to one privately owned in New Haven, should cry foul about this secret deal.
A backroom deal with such significant long-term consequences for the regional economy — not to mention rising and undisclosed costs for Connecticut taxpayers, probably in the many millions but who knows? — ought to be aired publicly before getting a green light by the remnants of a nonelected board that presided over a deal-making swamp, toasting themselves with cocktails paid for by the public.
This is Ned Lamont's Connecticut.
Kooris said after last week's meeting that the cost of the pier remake has risen because of changes to accommodate complaints from Cross Sound Ferry, which worried about ferry maneuvering space, and to improve connections to the rail link at the pier.
Of course, we have no idea what the changes are or exactly how much they will cost, and apparently won't before the port authority board acts.
It is also not clear how the rebuild of the pier can better accommodate the federally funded improvements to the rail line, since the proposal envisioned in the memorandum of understanding signed in April said traditional cargo could only be accommodated at the discretion of the wind companies.
Most disturbing to me, from what I heard from Kooris last week, is that a provision of the memorandum — that Connecticut cover all cost overruns for the project — remains in the final deal.
That's why, he said, the cost of improvements for the ferries and rail are being paid by Connecticut taxpayers.
How much more than $93 million will this thing cost? I can't imagine the possible cost overruns on a two-year project that would fill in seven acres of the harbor.
We only recently got to see the memorandum, with its blank check provision, after months of stonewalling by the broken port authority and weeks of denial by the governor of a clear Freedom of Information request.
Who knows how much Lamont eventually will give away secretly with this backroom deal? Connecticut taxpayers could be on the hook and paying this debt long after he is gone.
Lots of people are making big money on this deal and Connecticut taxpayers have no idea how much it is costing them, just like they don't know how much more they will pay for wind-generated electricity.
Sadly, Connecticut lawmakers haven't asked and don't seem to care.
This is the opinion of David Collins.

East Hampton approves sale of outdated town hall to developer
EAST HAMPTON — Residents narrowly approved a proposal to sell the existing Town Hall to a Bristol developer for $316,000.
The proposal was approved this week despite angry complaints from several residents, including members of The Chatham Party, that the town was in essence giving away a “town asset.”
In particular, Kyle Dostaler, the party chairman, complained the town had not gotten an appraisal of the building’s value before selling it.
He denounced the proposed sale as “a taxpayer rip-off.”
“This is a horrible thing for the town to be doing, to sell this (building) for such a ridiculous price,” Dostaler said.
His wife Mary Ann Dostaler, concurred, saying she was “incredulous that the town was moving forward with the sale without doing its due diligence.”
Town officials said they had hoped for a higher offer.
Town Council Chairman James “Pete” Brown said two other bidders had previously come forward but then withdrew their offers.
Bristol developer John Calciano presented his offer late last year.
The town bought the building, which was built in 1946 as a customer service center for the utility from CL&P, in the early 1970s.
But almost immediately after buying it, the town began what turned out to be a 35-year-long discussion and debate about finding a new site for a larger town facility.
In the meantime, the building began showing its age. The well that services the building is contaminated, forcing employees and town officials to rely on bottled water.
It is settling unevenly, is prone to leaks, doesn’t have adequate space for town departments and does not meet the standards for access by the handicapped that were enacted into law under the Americans with Disabilities Act, which was adopted in 1991.
Located on a down slope, there is also inadequate parking for the building, which also contains the town’s Police Department.
When CL&P/Eversource began an expansion for its maintenance and service facility located behind Town Hall, it reclaimed a road police had used to park their vehicles.
That forced the town to rent space at another site more than a mile east of Town Hall where officers could park their civilian cars, change into their uniforms and then take their cruisers out on routine patrol.
Other town departments were forced to use rental space as well.
Myriad problems with the building — highlighted when a sewage drain backed up spreading what was euphemistically called gray water throughout much of the interior of the Police Department — made town councilors realize it was time to do something.
Eventually, the town council accepted a proposal to build a new town hall/police headquarters inside a mixed-use community in the Edgewater Hills development.
Construction is winding down on the new facility.
Town Manager David E. Cox said earlier this month he expects the building will be ready for use in early April.
After some initial reluctance, the Board of Education agreed to re-locate to the new 34,000-square-foot building as well.
At the time, officials said relocating town offices from satellite facilities would save the town money and help defray a portion of the $18.9 million construction costs.
Resident Scott Minnick said he believes that by selling the building at such a low price the council was “duping us as a town.”
The Board of Finance approved the proposal, as did the Planning and Zoning Commission.
Earlier this month, the council voted 6-1 to also approve the sale, which led to the public hearing and town meeting that was held this week in the Town Hall Meeting Room.
The lone “no” vote was cast by Councilor Derek Johnson.
At the time, he did not give a reason for voting against the proposal.
But Monday night, pressed by Mary Ann Dostaler, Johnson said he had “manifold objections” to the proposal.
They included the lack of an appraisal, the cost of an appraisal, and the cost of maintaining the building if the town held on to it, Johnson said.
In 2014, CL&P offered the town a proposal to buy back the building for $1 million.
The two sides could not reach an agreement, however.
Council Vice Chairman Mark Philhower said the offer “was never in writing,” and was far less favorable to the town than was commonly believed.
The town would have wound up owing money, Philhower said, while Kyle Dostaler repeatedly interrupting saying, “That’s not true.”
Moderator Richard Greco initially asked for a voice vote.
When that was too close to call, he asked for a show of hands, which decided the result in favor of the sale.

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