Town Meeting Set On Refinancing FFH Loan To Bond

By John Voket

The town is prepared to take the final step in what officials acknowledge has been a flawed process. A town meeting to endorse or defeat converting a loan or so called “negative lease” to a money-saving bond is scheduled for Thursday, January 28. at 6:30 pm, at the Senior Center in Sandy Hook. The Board of Selectmen moved the matter to a public vote this week after a few tense moments of deliberation when IPN Selectman Bill Furrier suggested the town first fix the loophole that permitted the original transaction to go forward without public approval.

“To go to the town and ask for approval to rebond is the equivalent of saying, ‘Yes, we did something wrong, and we promise we won’t do it again,’” Mr Furrier said, “‘We promise — cross our heart and hope to die, we’re never gonna do it again.’”

Selectman Will Rodgers said that he doubted that the town attorney would have provided a written opinion that the original transaction, as proposed, was legal and could go forward if it was in “blatant violation of the charter.”

Mr Rodgers said there seemed to be a “party-centric complex” that wants to find a reason to pin the underlying action on “an end-run around normal processes.”

“I can tell you one of the chief concerns is that we would find ourselves in violation of an existing lease if we did not find a way to [correct] the problem,” Mr Rodgers said. “At the time that was a valid and legitimate concern as to why the action was undertaken. I’m not saying it carries the day...but it was done for valid business and legal considerations at the time.”

Saying he did not want to point any fingers or blame anyone, Mr Furrier said he wanted to look to the future “in a way that fixes things that are wrong.” The IPN selectman believes a loophole that permitted the former Board of Selectmen to approve what has been described as a “negative lease” is part of a structural deficiency inherent in the statutory relationship between the Fairfield Hills Authority and the town.

First Selectman Pat Llodra replied that several elected boards, including the selectmen, are in the process of investigating the matter with the goal of closing the loophole, and that the refinancing that will come before the public January 28 is strictly a financial decision to save taxpayers more than $1.1 million in interest — $85,000 in the coming fiscal year.

“Let me be really clear,” Mrs Llodra said. “This is a financial transaction and we have stated over and over and over again there will be lots of opportunities that we have created, on purpose, for all those issues to be discussed.”

The first selectman assured her board that there was no intention to divert discussion and possible future action on the issue, and that “anyone who feels the funding of the original lease was handled improperly can have their say.”

“This is like saying I got a loan from a bank at six-and-a-half percent and I have an opportunity to move that money to a different loan at three-and-a-half percent...that’s all this is,” Mrs Llodra said.

Mr Furrier then acknowledged that the current administration under Mrs Llodra will address the points.

In a related development, the Legislative Council moved January 20 to initiate its investigation of the issues and details leading up to the hybrid leaseback arrangement through the council’s finance subcommittee.

That investigation, along with input from other elected and appointed bodies examination of the process, is expected to lead to a directive in the next charter revision that would prevent the Fairfield Hills Authority or the board of selectmen to enter into negative leases without following the special appropriation procedures that include ultimate public approval of any qualified expenditure.