"The incurred the disapproval of New Canaan residents at a level not seen in recent decades," said the draft report reviewed by that, "led to the unauthorized payment of a $1.5 million cost overrun" on the project at a Special Meeting of the subcommittee held Wednesday, Oct. 26 in Town Hall. The report is the result of its investigations, including seven public meetings, conducted since its formation on May 23.
Citing "Decision Points" at which the project took "meaningful turns," the report states its intention, "to enable processes and protocols to be instituted that would protect the financial health of New Canaan."
The Decision Points identified by the committee and its "strongly made" Recommendations were:
- The selection of Loureiro Contractors, Inc. (LCI) as project contractor with a bid of $1,161,756. with Federally funded, State administered reimbursement. Properly vetted? Clear understanding of State contract?
Recommendation: Establishment of a Public Works commission to ensure proper vetting and to, "aid in assessing the risks inherent in contracts with the State."
- The use of the Capital and Nonrecurring Fund to account for costs.
Recommendation: Any capital project with funding from this account, be appropriated for the full cost with provisions for possible outside revenues.
- Engagement of outside legal counsel without appropriate oversight.
Recommendation: The Town Attorney should be responsible for overview and management of all legal processes, including vetting and reviewing the work and billing from outside counsel.
- December 2008 payment of legal bill from Capital Nonrecurring Fund.
Recommendation: Finance Dept. should be responsible for assuring communication and appropriation of extraordinary expenses; expansion of information presented to Selectmen.
- Town Council's omission from "information flow" with Board of Finance.
Recommendation: Selectmen require inclusion of Town Council on legal matters.
- Outside counsel's decision to request a deposition of LCI employee.
Recommendation: Again, the Town Attorney should be responsible for management of outside counsel.
- Results of the arbitration were not made public.
Recommendation: Improved communications between Selectmen, Bd of Finance, Town Council and Executive Departments
- The insertion in the agenda of the April Town Council meeting of the request for a bonding issue to cover arbitration award was not fully explained to Town Council Chair by CFO.
Recommendation: Improved communication
- "Numerous and significant" sums of money were paid without proper procedures; responsibility for this oversight, while shared, "falls most heavily on the First Selectman."
Recommendation: Auditor or Audit Committee should assure compliance with rules to be established on guidelines and procedures for disbursement of Town funds with appropriate penalties for wrongful disbursement.
- On Mar. 25 the arbitration award of $617,868 was paid to LCI from the Capital Nonrecurring account without an appropriation request, bring the total amount paid on the project from the Fund to more than $3 million.
Recommendation: Town Council formally approve all transfers into the Capital and Nonrecurring Fund as required by statute.
- The Town decides to bond the amount of the arbitration award; approved by Board of Finance, but does not pass the Town Council.
Recommendation: Again, Town Council approval of all transfers.
- The Town Treasurer took no part in the project as no bond funds were involved.
Recommendation: A review of the role of Town Treasurer.
In its conclusion, the committee warns that, "without significant safeguards firmly in place, these events could occur in another iteration, or simply 'in the future.'"
Town Council members of the subcommittee are, chair Kit Devereaux, Ken Campbell, Beth Jones and Tom O'Dea. In addition, Neil Budnick of the Board of Finance and Judge Russ Kimes, a New Canaan served as advisors.
A final draft of the report will be presented to the Town Council at a later date.
A copy of the report can be found on the Town website.