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Report: Fairfield Lost $6 Million in Metro Deal

FAIRFIELD, Conn. – Attorney Richard Vitarelli had two pieces of news that Fairfield’s Board of Selectmen “can’t believe” Wednesday night.

First, former First Selectman Kenneth Flatto and former Town Attorney Richard Saxl did not reveal the full extent of the town’s agreement with the state to build Fairfield Metro train station. And because of that, the town lost a potential $6 million from the station’s parking fees.

“I would use the word ‘disappointed,’” First Selectman Michael Tetreau said. “But frankly, I don’t know if that’s strong enough for how I feel about what’s gone on.”  

Vitarelli’s firm, McCarter & English LLP, was hired this summer to look into the legal issues surrounding the train station construction project. The attorneys already told the Board of Selectmen that they believe Flatto did not get the proper authority to sign an agreement with the state, giving the town $19.4 million to restart the project in 2010.

Vitarelli said Wednesday night that his firm also found that Flatto did not disclose part of that deal, dubbed the “Binding Letter Agreement.” That agreement was signed by Flatto and then-Transportation Commissioner Jeffrey Parker in spring 2010. It changed the original 2003 contract.

Fairfield was originally entitled to as much as $300,000 per year in parking fees from the Fairfield Metro station for the first 20 years it was open, a total of up to $6 million. The Binding Letter stated that portions of the $19.4 million grant from the state would be included in the Department of Transportation’s operating fees for the lot. Fairfield could still get its $300,000 per year, but only if money is left after those fees are paid.

The Board of Selectmen voted on the changed agreement between the state and the town in May 2010. But Vitarelli found that former Selectman Sherri Steeneck, the only voting member besides Flatto at the time, did not receive the Binding Letter or know about it before the vote.

The Board of Finance and the Representative Town Meeting did not vote on the 2010 agreement, but Flatto presented it to both boards after the selectmen’s vote. He did not mention the specifics of the Binding Letter at either presentation.

The town also discovered a new document just two months ago. The Department of Transportation’s lawyer had asked Saxl to clarify that Fairfield had followed the proper approval process before sending the $19.4 million grant in July 2010. Saxl sent that letter, stating that the town bodies knew about the deal, including the Binding Letter.

Saxl’s letter was also supposed to be sent to the Board of Selectmen. But Flatto found a factual error in the report after it had gone to the state: It said the RTM was briefed on the Binding Letter, but it had not been. Because of the error, Flatto did not send the letter to his fellow Selectmen Steeneck and James Walsh. Neither he nor Saxl corrected the error with the Department of Transportation.

Because of the July 2010 memo, Vitarelli says that trying to void the Binding Letter would be impossible. Since Saxl’s letter showed that the state believed all the approvals were in place, it could argue in court that it had no reason to doubt the Binding Letter.

Vitarelli also cautioned against a private suit against either Saxl or Flatto. He said that it would be costly to the town to sue the two, and that the pair might not be able to pay even if the town won.

The attorney also said it would be tough to prove that the money would not have been lost had the deal with the state not gone through. “If there’s no train station, there’s no parking revenue,” Vitarelli said.

Walsh said he plans to bring forward a revision to the Town Charter that would prevent such issues from coming up in the future. His change would require full approval of all contracts by the Board of Finance and the RTM, even revisions to established deals.

“The public deserves better,” Walsh said. “There’s got to be some way to correct this so that this doesn’t happen again.”

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