CT Construction Digest Wednesday April 22, 2020
Connecticut traffic is down 50 percent and that could spell trouble for the Special Transportation Fund
Marc E. Fitch
Traffic numbers from the Connecticut Department of Transportation show a steep drop-off in people traveling on Connecticut’s highways in response to the COVID-19 pandemic and the closure of nonessential businesses by the governor.
The number of vehicles traveling along I-84, I-91 and I-95 at particular points dropped by as much as 50 percent.
On I-84 in Newtown, for instance, the number of vehicles dropped from an average of roughly 78,000 in 2019 to 39,043 on Thursday, April 16 — a 50 percent decline. Many days saw significantly fewer cars and trucks.
I-95 in Branford saw the number of vehicles drop 49 percent, from a 2019 average of roughly 86,000 per day to 42,291, as of April 16. In Norwalk, the drop was 42 percent.
I-91 in Wethersfield saw a 49 percent decline in vehicles
At the same time, gasoline prices have reached the lowest point in recent history, the result of an oil price war between Saudi Arabia and Russia.
None of this bodes well for Connecticut’s Special Transportation Fund, which relies on the state’s gasoline tax and oil companies gross receipts tax as two of its largest revenue sources.
While the state gasoline tax of 25 cents per gallon is a set rate, fewer people driving means declining gasoline sales. A report from OPIS Pricing and Marketing Analysis for Oil, Fuel & Energy showed retail station sales were down 46.6 percent for the week ending March 28.
Michael Fox, executive director of the Greenwich-based Gasoline & Automotive Service Dealers of America, Inc., says gas stations are seeing a steep drop-offs in sales.
“My members are talking about numbers between 40 and 60 percent lower in sales,” Fox said. “There’s just no traffic or volume out there.”
Fox said typically high-volume stations, in particular, are seeing steep declines in sales, noting that a typical high-volume station sells anywhere between 100,000 and 150,000 gallons of gasoline per week.
Fox says the STF will take “a double hit,” because the price of gasoline and oil has plummeted, impacting the fund’s third-largest revenue source: the petroleum gross receipts tax.
In FY 2019, the STF took in $509.7 million from the motor fuels tax and $313 million from the oil companies tax, according to the state’s Open Budget website.
This fiscal year – which ends June 30 – the state has taken in $303.5 million in the gasoline tax and $153.1 million from the oil companies tax.
During the 2019 fiscal year, the state took in an average of $31.2 million per month in gasoline tax revenue, according to the CT Data website, although revenue figures for all months were not yet available.
A percentage of the state sales tax is also deposited into the STF, constituting the second-largest revenue source for the STF. Indications are Connecticut could see lower sales tax revenue as many businesses are closed and residents are spending less
The STF started the year with a balance of $320 million and a projected surplus of $13 million, but, according to recent budget projections from the Office of Fiscal Analysis and the Office of Policy and Management, that balance is already declining significantly due to oil prices and reduced commuter travel.
The Office of Policy and Management is estimating a revenue loss of $102 million, resulting from lower gasoline sales, sales tax revenue and oil company gross receipts, leaving the fund’s balance at $184.3 million.
“The Motor Fuels Tax has been revised downward by $26.5 million due to significant declines in consumption resulting from increased telecommuting and social distancing orders which we assume will continue through the month of May,” OPM Secretary Melissa McCaw wrote in an April 20 report to State Comptroller Kevin Lembo.
“The Oil Companies Tax has been revised downward by $18.0 million as a result of continued declines in the price of oil. The Sales and Use Tax has been revised downward by $26.3 million, consistent with revisions made in the General Fund,” McCaw wrote.
The STF had been on track to have a cumulative balance of $638.9 million by 2024, according to the OFA. However, according to the governor’s office, after 2024 debt service payments for Connecticut’s past borrowing would begin to outpace revenue.
The future of the STF has already been the subject of a multi-year fight regarding tolls on Connecticut’s highways.
Both Gov. Dannel Malloy and Gov. Ned Lamont argued tolls were necessary to support the STF because gasoline tax revenue had flattened, and debt service costs were projected to rise, but the public backlash to the tolling proposals eventually killed the government’s push for tolls in early 2020.
But the lower gasoline sales and prices are not the only problem for the state’s transportation fund.
The pandemic and social distancing measures put into place have led to decreased usage of public transportation, which means much lower ticket sales for trains and buses.
Subsidies for trains and buses constitute one of the largest payouts for the state’s transportation fund, but without ticket sales those subsidies will likely grow. The New Haven Line, for instance, took in $356.3 million in ticket sales during the 2019 fiscal year, according to numbers provided by DOT.
“The decrease in ridership is a reflection of the fact that our customers are continuing to follow the advice of health professionals to keep themselves and others safe,” said CTDOT Public Transportation Bureau Chief Richard Andreski in a March 27 press release.
Although the Connecticut Department of Motor Vehicles has closed its doors to the public, many services remain available online. License renewals have been extended during the shutdown.
DMV and registration fees are also a significant source of revenue for the STF, but, presumably, license renewal fees will start flowing again when the offices reopen, making it only a temporary loss. OPM projects that $20 million of DMV revenue will be shifted to the 2021 fiscal year.
Although revenues will surely decrease, expenses most likely won’t — at least not nearly enough to make up for the loss.
Payroll is the biggest cost for state agencies and many DOT employees are considered essential and are working on the states roads and bridges. Those employees deemed nonessential have been working from home when possible.
A DOT worker who works on Connecticut’s bridges, and agreed to offer comment on condition of anonymity, says even though he’s considered an essential employee, he was told to stay home for a week with pay.
“Half my guys are staying home this week, and I’m doing it next week,” he said in an interview. “If I’m an essential employee, why am I home? A week off isn’t going to change a damn thing. I’d rather be at work than sitting at home.”
Connecticut is currently sitting on a reserve fund of roughly $2.5 billion.
Early estimates project Connecticut may face a $500 million deficit this year and a $1.5 billion deficit next year as a result from the shutdown and economic downturn, although those numbers will likely depend on how long the pandemic and recession continues.
Danbury’s proposed $80M cancer center could be first of its kind in CT
Julia Perkins
Marc E. Fitch
Traffic numbers from the Connecticut Department of Transportation show a steep drop-off in people traveling on Connecticut’s highways in response to the COVID-19 pandemic and the closure of nonessential businesses by the governor.
The number of vehicles traveling along I-84, I-91 and I-95 at particular points dropped by as much as 50 percent.
On I-84 in Newtown, for instance, the number of vehicles dropped from an average of roughly 78,000 in 2019 to 39,043 on Thursday, April 16 — a 50 percent decline. Many days saw significantly fewer cars and trucks.
I-95 in Branford saw the number of vehicles drop 49 percent, from a 2019 average of roughly 86,000 per day to 42,291, as of April 16. In Norwalk, the drop was 42 percent.
I-91 in Wethersfield saw a 49 percent decline in vehicles
At the same time, gasoline prices have reached the lowest point in recent history, the result of an oil price war between Saudi Arabia and Russia.
None of this bodes well for Connecticut’s Special Transportation Fund, which relies on the state’s gasoline tax and oil companies gross receipts tax as two of its largest revenue sources.
While the state gasoline tax of 25 cents per gallon is a set rate, fewer people driving means declining gasoline sales. A report from OPIS Pricing and Marketing Analysis for Oil, Fuel & Energy showed retail station sales were down 46.6 percent for the week ending March 28.
Michael Fox, executive director of the Greenwich-based Gasoline & Automotive Service Dealers of America, Inc., says gas stations are seeing a steep drop-offs in sales.
“My members are talking about numbers between 40 and 60 percent lower in sales,” Fox said. “There’s just no traffic or volume out there.”
Fox said typically high-volume stations, in particular, are seeing steep declines in sales, noting that a typical high-volume station sells anywhere between 100,000 and 150,000 gallons of gasoline per week.
Fox says the STF will take “a double hit,” because the price of gasoline and oil has plummeted, impacting the fund’s third-largest revenue source: the petroleum gross receipts tax.
In FY 2019, the STF took in $509.7 million from the motor fuels tax and $313 million from the oil companies tax, according to the state’s Open Budget website.
This fiscal year – which ends June 30 – the state has taken in $303.5 million in the gasoline tax and $153.1 million from the oil companies tax.
During the 2019 fiscal year, the state took in an average of $31.2 million per month in gasoline tax revenue, according to the CT Data website, although revenue figures for all months were not yet available.
A percentage of the state sales tax is also deposited into the STF, constituting the second-largest revenue source for the STF. Indications are Connecticut could see lower sales tax revenue as many businesses are closed and residents are spending less
The STF started the year with a balance of $320 million and a projected surplus of $13 million, but, according to recent budget projections from the Office of Fiscal Analysis and the Office of Policy and Management, that balance is already declining significantly due to oil prices and reduced commuter travel.
The Office of Policy and Management is estimating a revenue loss of $102 million, resulting from lower gasoline sales, sales tax revenue and oil company gross receipts, leaving the fund’s balance at $184.3 million.
“The Motor Fuels Tax has been revised downward by $26.5 million due to significant declines in consumption resulting from increased telecommuting and social distancing orders which we assume will continue through the month of May,” OPM Secretary Melissa McCaw wrote in an April 20 report to State Comptroller Kevin Lembo.
“The Oil Companies Tax has been revised downward by $18.0 million as a result of continued declines in the price of oil. The Sales and Use Tax has been revised downward by $26.3 million, consistent with revisions made in the General Fund,” McCaw wrote.
The STF had been on track to have a cumulative balance of $638.9 million by 2024, according to the OFA. However, according to the governor’s office, after 2024 debt service payments for Connecticut’s past borrowing would begin to outpace revenue.
The future of the STF has already been the subject of a multi-year fight regarding tolls on Connecticut’s highways.
Both Gov. Dannel Malloy and Gov. Ned Lamont argued tolls were necessary to support the STF because gasoline tax revenue had flattened, and debt service costs were projected to rise, but the public backlash to the tolling proposals eventually killed the government’s push for tolls in early 2020.
But the lower gasoline sales and prices are not the only problem for the state’s transportation fund.
The pandemic and social distancing measures put into place have led to decreased usage of public transportation, which means much lower ticket sales for trains and buses.
Subsidies for trains and buses constitute one of the largest payouts for the state’s transportation fund, but without ticket sales those subsidies will likely grow. The New Haven Line, for instance, took in $356.3 million in ticket sales during the 2019 fiscal year, according to numbers provided by DOT.
“The decrease in ridership is a reflection of the fact that our customers are continuing to follow the advice of health professionals to keep themselves and others safe,” said CTDOT Public Transportation Bureau Chief Richard Andreski in a March 27 press release.
Although the Connecticut Department of Motor Vehicles has closed its doors to the public, many services remain available online. License renewals have been extended during the shutdown.
DMV and registration fees are also a significant source of revenue for the STF, but, presumably, license renewal fees will start flowing again when the offices reopen, making it only a temporary loss. OPM projects that $20 million of DMV revenue will be shifted to the 2021 fiscal year.
Although revenues will surely decrease, expenses most likely won’t — at least not nearly enough to make up for the loss.
Payroll is the biggest cost for state agencies and many DOT employees are considered essential and are working on the states roads and bridges. Those employees deemed nonessential have been working from home when possible.
A DOT worker who works on Connecticut’s bridges, and agreed to offer comment on condition of anonymity, says even though he’s considered an essential employee, he was told to stay home for a week with pay.
“Half my guys are staying home this week, and I’m doing it next week,” he said in an interview. “If I’m an essential employee, why am I home? A week off isn’t going to change a damn thing. I’d rather be at work than sitting at home.”
Connecticut is currently sitting on a reserve fund of roughly $2.5 billion.
Early estimates project Connecticut may face a $500 million deficit this year and a $1.5 billion deficit next year as a result from the shutdown and economic downturn, although those numbers will likely depend on how long the pandemic and recession continues.
Danbury’s proposed $80M cancer center could be first of its kind in CT
Julia Perkins
DANBURY — An $80 million cancer treatment center offering a therapy only available in 36 other facilities in the country could be coming to the city.
Danbury Proton proposes building what it calls a “state-of-the-art” center at 85 Wooster Heights, where 338 patients a year could be treated using proton therapy, a non-invasive radiation technique.
The company published Tuesday a notice of intent to submit a “certificate of need” to the state Office of Health Strategy. This is the first step in what is expected to be a three-year process to open the facility.
The announcement comes as the city and globe is roiled with the coronavirus pandemic, which has killed 1,331 Connecticut residents and led to mass unemployment.
“The wheels of progress were already turning when the coronavirus crisis hit,” he said. “Cancer doesn’t wait for the coronavirus. Cancer is still a huge killer, and cancer will be with us long after the coronavirus virus vaccine is (developed).”
The project is expected to create more than 100 construction jobs over a two-year period, with at least 30 permanent on-site jobs and an annual payroll of $3 million once the center opens in early 2023, Crandall said. The company expects to pay around $613,000 a year in property taxes.
Mayor Mark Boughton said the center could be a boon to the city’s economy.
“Any economic investment will be a good story to tell after what I think will be a very, very difficult time economically, not just in Danbury, but in Connecticut and across the country,” he said.
Hartford HealthCare and the Yale New Haven Health System are working to build a 250,000-square-foot proton facility in Wallingford, but that center is expected to be years away, as well.
For now, there are no other centers offering this therapy in Connecticut, with the nearest facilities in Boston and New York, Danbury Proton said.
“That particular technology isn’t widely available, so it also has a nice health care component for our residents,” Boughton said.
The treatment is particularly good for patients with cancerous tumors, especially those in sensitive locations such as near the brain, spine, heart and eye, the company said. Unlike traditional radiation which uses photons, or X-rays, the protons better direct their energy onto the tumor, protecting healthy tissue and sensitive organs, leading to fewer or no side effects.
Patients also have a better quality of life during and after treatment, the company said.
“The whole field of proton therapy has been growing, and the forecasts are that it will become a growing therapy in cancer treatment for years to come,” Crandall said.
The center would use what the company called the “revolutionary” Mevion S250i system, which is manufactured in Massachusetts and installed at seven U.S. proton centers in the country, with several more in the planning stages.
The 14,400-square-foot building in Danbury would have one treatment room, but would be designed to add a second if necessary. Only one patient may be treated at a time, but multiple patients can be scheduled each day, Crandall said.
The facility would be built in a mixed-use development property adjacent to Route 7 and Danbury Municipal Airport, and three miles from Danbury Hospital.
State approval is expected to take several months, with city zoning approval needed afterward.
“Our attitude is: The sooner we get the proton center operational, the sooner patients can benefit,” Crandall said.
New Fairfield approves land purchase for school project
Kendra Baker
NEW FAIRFIELD — Despite opposition from several residents, the selectmen and finance boards voted to move forward with purchasing 78 Gillotti Road for the high school building project.
During a special joint meeting Monday night, the Board of Selectmen authorized the purchase of the 2-acre property for $325,000, and the Board of Finance voted to authorize the appropriation from the town’s capital and non-recurring projects fund balance.
Officials have said the $325,000 property purchase price will not be an added cost as the Permanent Building Committee has agreed to reduce the budget by $475,772 and move an additional $547,228 into contingency.
Costs, however, are not the only concerns residents have about the $84.2 million building project.
Some have questioned whether the town’s purchase of 78 Gillotti Road without referendum meets the criteria in Gov. Ned Lamont’s Executive Order No. 7S.
The legal opinion of New Fairfield’s town attorney, David Grogins, was that it was “an appropriate proceeding under the governor’s order” for the selectmen and finance boards to vote on the purchase and appropriation.
Others in town are against moving forward with the project at all at this time, including a number of Gillotti Road residents who are upset about the town’s recently changed construction plans and lack of communication with those who live near the high school.
Due in part to unforeseen costs in the original plan, the Permanent Building Committee decided two weeks ago to move forward with a different high school construction plan than the one taxpayers approved in October.
Since the new plan requires using land at 78 Gillotti Road, the committee recommended the purchase of the property to the selectmen and finance boards.
Kelly Zurzola, who lives across the street from the school, said she “did not know anything about this until last week.”
“I voted yes to the high school (building project) because I thought that was best for the kids in the town. We were told everything about that and where it was going to be — and now all of a sudden it’s moving … and no one was told anything about that,” she said.
Gillotti Road resident Claudia Thiel said she and her neighbors have tolerated a lot over the years, but the new high school construction plan is too much.
“Before there was ever a high school built, there were people living here (and) since the high school was built, there has been a lot of tolerance and sacrifice by people who have been living here,” she said. “None of us have really complained about it because it’s all been for the good of the town, but what you’re asking us to accept now is just wrong. It’s not right; it’s not what was voted on.”
Residents in the immediate vicinity of the high school already deal with school-related traffic backups, light pollution, noise and occasional trespassers, Thiel said.
“I do not doubt that is all going to be significantly worse now that you have abandoned the original site presented to the town,” she said.
Thiel said the site the town voted on back in October was “far less imposing” than the one incorporating 78 Gillotti Road, and she does not approve of the way the project is being handled.“The one group that was never contacted about these changes are the people who are going to be the most negatively impacted, and those are the neighbors,” she said.
Selectman Khris Hall said many of the concerns presented by neighbors are legitimate and she hopes they will be considered during the design phase of the high school project.
Hall and First Selectman Pat Del Monaco voted in favor of the resolution to purchase 78 Gillotti Road, but Selectman Kim Hanson “vehemently” voted against it, citing concerns about legality and lack of transparency.
Board of Finance member Cheryl Reedy said she voted in favor of the 78 Gillotti Road appropriation because she believed it’s “the right thing to do” financially but had some reservations about the process.“I think we’re all learning, and we have to take this opportunity to learn how to be much more (transparent) than we have been in the past,” she said. “I think we need to take to heart the concerns that we heard tonight about how the public feeling has been that they’re not getting good information from us.”
With all the changes brought on by the coronavirus pandemic, Reedy said it’s important for the boards to “bend over backwards” to make sure the public is properly informed about what’s happening.
New Fairfield approves land purchase for school project
Kendra Baker
NEW FAIRFIELD — Despite opposition from several residents, the selectmen and finance boards voted to move forward with purchasing 78 Gillotti Road for the high school building project.
During a special joint meeting Monday night, the Board of Selectmen authorized the purchase of the 2-acre property for $325,000, and the Board of Finance voted to authorize the appropriation from the town’s capital and non-recurring projects fund balance.
Officials have said the $325,000 property purchase price will not be an added cost as the Permanent Building Committee has agreed to reduce the budget by $475,772 and move an additional $547,228 into contingency.
Costs, however, are not the only concerns residents have about the $84.2 million building project.
Some have questioned whether the town’s purchase of 78 Gillotti Road without referendum meets the criteria in Gov. Ned Lamont’s Executive Order No. 7S.
The legal opinion of New Fairfield’s town attorney, David Grogins, was that it was “an appropriate proceeding under the governor’s order” for the selectmen and finance boards to vote on the purchase and appropriation.
Others in town are against moving forward with the project at all at this time, including a number of Gillotti Road residents who are upset about the town’s recently changed construction plans and lack of communication with those who live near the high school.
Due in part to unforeseen costs in the original plan, the Permanent Building Committee decided two weeks ago to move forward with a different high school construction plan than the one taxpayers approved in October.
Since the new plan requires using land at 78 Gillotti Road, the committee recommended the purchase of the property to the selectmen and finance boards.
Kelly Zurzola, who lives across the street from the school, said she “did not know anything about this until last week.”
“I voted yes to the high school (building project) because I thought that was best for the kids in the town. We were told everything about that and where it was going to be — and now all of a sudden it’s moving … and no one was told anything about that,” she said.
Gillotti Road resident Claudia Thiel said she and her neighbors have tolerated a lot over the years, but the new high school construction plan is too much.
“Before there was ever a high school built, there were people living here (and) since the high school was built, there has been a lot of tolerance and sacrifice by people who have been living here,” she said. “None of us have really complained about it because it’s all been for the good of the town, but what you’re asking us to accept now is just wrong. It’s not right; it’s not what was voted on.”
Residents in the immediate vicinity of the high school already deal with school-related traffic backups, light pollution, noise and occasional trespassers, Thiel said.
“I do not doubt that is all going to be significantly worse now that you have abandoned the original site presented to the town,” she said.
Thiel said the site the town voted on back in October was “far less imposing” than the one incorporating 78 Gillotti Road, and she does not approve of the way the project is being handled.“The one group that was never contacted about these changes are the people who are going to be the most negatively impacted, and those are the neighbors,” she said.
Selectman Khris Hall said many of the concerns presented by neighbors are legitimate and she hopes they will be considered during the design phase of the high school project.
Hall and First Selectman Pat Del Monaco voted in favor of the resolution to purchase 78 Gillotti Road, but Selectman Kim Hanson “vehemently” voted against it, citing concerns about legality and lack of transparency.
Board of Finance member Cheryl Reedy said she voted in favor of the 78 Gillotti Road appropriation because she believed it’s “the right thing to do” financially but had some reservations about the process.“I think we’re all learning, and we have to take this opportunity to learn how to be much more (transparent) than we have been in the past,” she said. “I think we need to take to heart the concerns that we heard tonight about how the public feeling has been that they’re not getting good information from us.”
With all the changes brought on by the coronavirus pandemic, Reedy said it’s important for the boards to “bend over backwards” to make sure the public is properly informed about what’s happening.