Stimulus Funds Authorized—

The Feds Give, While The State Takes Some Grant Funds Away

By John Voket

Two pieces of financial news were reported to town officials this week by First Selectman Joe Borst and Finance Director Robert Tait. Some of that news was good, and some not so good.

On Monday, the first selectman told the Board of Finance that the town’s net gain from the first round of federal economic stimulus grants would total $585,991. The infusion of incoming cash from the federal government first hinted at earlier this year to be somewhat higher, will be targeted for road improvement projects on Castle Hill and Castle Meadow Roads.

One month earlier, armed with new information about various requirements the town would need to follow in order to receive additional funding, Public Works Director Fred Hurley met with state Department of Transportation officials. As a result of updates he received in that meeting, Mr Hurley completed what he described as “reassembling the federal application for the stimulus funds.”

First and foremost, the public works director said a two-phase proposal to mill and repave Queen Street with the hope of eventually installing sidewalks on part or all of the expanse is currently “off the table for federal funding.”

Mr Hurley explained that structuring the project to accommodate Federal Highway Administration (FHA) guidelines, as applied to this particular local road project, would escalate the cost to more than $1.2 million.

“If we handle this ourselves, without applying for the stimulus grant, Queen Street will end up costing a fraction of that,” Mr Hurley said, putting the estimated Phase 1 cost at around $160,000. As a result, the town will restructure and fast-track its federal application through the state DOT to a combined project involving Castle Hill and Castle Meadow Roads.

Those separate projects originally designated in the first round of transportation stimulus included $255,902 for paving work to improve the overall safety of Castle Meadow Road, and construction work centering around Castle Hill Road in the area Mr Hurley once described as the “car eating curve.”

That expanse is at the base of the north/south hill leading into town, with an estimated price tag of about $291,000. Mr Hurley said the revised application for the combined project closely matches the DOT’s and FHA’s approximate cost to complete — between $700,000 and $800,000.

Even the federal stimulus grant authorization Mr Borst reported earlier this week comes with modest subtractions. The originally promised $634,997 will be lightened somewhat because the state will take $49,006 to cover “state materials testing” and state administrative oversight and audits costs.

Mr Borst said the net amount will still cover the cost of the associated road work.

Mr Tait also reported to the finance board this week regarding the net effect of changes in state grants to the town, which creates a $207,951 net revenue deficit.

In deliberating the town budget proposal earlier this year, and because the local budget had to be ratified long before the state completed its budget, Mr Tait estimated the amount of a Pequot-Mohegan grant at the level telegraphed in the governor’s proposed budget at the time — which was $925,834.

But after nearly three months without a state budget, the final package recently approved in Hartford provides $280,040 less than originally promised from the Pequot-Mohegan source. That deficit is offset somewhat by an increase in LOCIP or Local Capital Improvement Program funds, which were budgeted locally at $200,000, but were awarded at $272,089.

The bottom line was also helped somewhat after Mr Tait’s recommended re-funding certain bonds. That re-funding, which was achieved at what he described as “favorably low interest rates,” will end up saving taxpayers an additional $350,438 in debt service this fiscal year.

Once factored into the equation with the state grant adjustments, the net revenue gain moves into the black by $142,487.