CT Construction Digest Wednesday July 6, 2022
Inflation threatens to erode the value of billions of dollars committed to build roads, bridges and other public works, forcing Connecticut transportation officials to compress their time horizon when calculating project costs.
Rising costs are particularly worrisome with the state set to receive more than $5 billion over five years from Washington in the federal Infrastructure Investment and Jobs Act. President Joe Biden signed the legislation in November, committing more than $1 trillion to the states and other jurisdictions for roads, water projects, railways, airports, broadband internet, electric grids and green-energy projects.
“The inability to get specific materials and the rising costs of virtually everything are challenges we must face,” Josh D. Morgan, spokesman for the Connecticut Department of Transportation, said in an emailed statement.
Over the last three years, supply chain problems and inflation have increased costs, he said, without citing specific projects. Items such as electrical equipment, steel, concrete and asphalt can cost 10% to 20% more than a few years ago, he said.
Bids are coming in higher than estimates due to increased costs and lack of supply for particular materials.
To help plan for problems caused by inflation, the Department of Transportation no longer uses a three-year price history when figuring out a project estimate, Morgan said. Officials instead use a price history extending back six to 12 months when calculating estimates to make sure projects move forward as planned and on schedule, he said.
U.S. Sens. Richard Blumenthal and Chris Murphy announced in August 2021 that Connecticut would receive about $5.4 billion over five years.
It includes $3.3 billion for major road projects, $1.3 billion for buses and railroads, $561 million to strengthen bridges and $100 million for extending computer broadband coverage around the state and to low-income families.
Blumenthal acknowledged Wednesday “there is certainly a concern about inflation and its impact and the adequacy of investment in infrastructure.” But construction projects have multi-year timelines and may not be threatened by inflation that he’s confident will soon be brought under control by the Federal Reserve as it raises interest rates.
Inflation, which reached 8.6% in May, the highest in more than 40 years, is sapping consumers’ purchasing power at the supermarket, gas pump and at retailers online and at the mall. Rapidly rising prices and the corrosive effect on Americans’ paychecks are putting Democrats on the defensive just four months before elections that will decide whether they keep their slim majorities in the House and Senate or Republicans take over.
The price hikes are driven by several factors, including worldwide supply-chain backlogs, strong consumer and business spending in the U.S. and Russia’s invasion of Ukraine. Critics say federal energy and fiscal policies, particularly government spending, including the infrastructure program, is contributing to inflation.
Ben Johnston, chief operating officer at Kapitus, a New York financing company serving businesses, particularly small businesses in industries such as construction, retail and health care, identified four forms of inflation.
Wages are rising in response to a “very hot labor market” and worker shortages, he said. The cost of goods is rising, prompting businesses and individuals to make bulk purchases and find other strategies, rent and facilities costs are rising and capital costs are climbing as interest rates rise, he said.
“Certainly it’s a very large and substantial amount of capital going into infrastructure,” Johnston said.
“However, as costs rise across the board those dollars won’t be able to go as far given the high and considerable increase in costs for many of the raw materials that are going into construction broadly,” he said.
Construction projects now being identified and assigned in the next few years will be affected “if inflation is not brought under control in the next year or two,” he said.
Joe Toner, executive director of the Connecticut State Building Trades council, said supply chain problems have shaped up as equally important as inflation. But unions have benefited because they can dispatch larger work crews more quickly than nonunion labor to developers and builders shut by COVID-19 and supply shortages and looking to quickly resume work, he said.
“We can double down, triple down and push the project out for them,” Toner said.
HARTFORD — At 144 years old, the Connecticut State Capitol, built as a memorial to the Civil War, is showing its age.
Winds, temperatures and time are causing the thin layer of gold leaf on the iconic dome to slowly blow away. The exterior sidewalks and stairs around the High Victorian Gothic architectural confection are deteriorating to the point where they are hazardous for pedestrians.
And then there’s that persistent leak that’s coming off a roof and dripping through fifth-floor ceiling tiles in a hallway outside the Commerce Committee’s staff office.
The seat of state government, declared a national historic landmark 50 years ago, which hasn’t seen major renovations in nearly 40 years, is overdue for a face lift. And Facilities Administrator Eric Connery, who has held his “dream job” running the Capitol complex and the Old State House a mile away for the last 27 years, has just retired.
Connery’s confident that the two-year, $15-million cleaning and renovation scheduled to start next year, including a million dollars to brush new gold leaf 3/1000th of an inch thick around the massive 250-foot-tall dome- designed by architect Richard Mitchell Upjohn - will be successful.
“The gold leaf is just a very, very, very thin layer of gold that’s applied as little squares pushed on with a very gentle brush,” Connery said during a final behind-the-scenes tour of the building with a reporter.
William Morgan, a former State Capitol Police chief who is a member of the advisory Capitol Preservation and Restoration Commission, said Thursday that he saw the blotched gold leaf was in need of replacing when he was recently picking up his daughter at the nearby Hartford train station.
“I noticed that the gilding wasn’t as brilliant as it normally is, or as it should be,” Morgan said, adding that he drove around the Capitol and noticed it further. “It wasn’t sparkling and the last time it was gilded was probably the early 1980s,” Morgan said. “I don’t pretend to know how long gilding lasts, but I’m a freak for that building.”
Morgan said that years of deferred maintenance, mostly from state budgetary constraints, are likely coming home to roost. The exterior work, scheduled to start after the General Assembly finishes in June, 2023 includes fixing leaks in non-original atrium glass on the east and west sides of the Capitol, repointing the granite and marble blocks and cleaning the entire outside the building. Antique stained glass that has been conserved in recent years, will be replaced under each atrium.
Exterior steps that are splitting open on the north side will be fixed and a new sidewalk and driveway is planned, including an underground link to the downtown Hartford heating and cooling loop.
The pesky leak in the fifth floor hallway is just the latest edition of roof leaks that have baffled maintenance crews in one location or another, for Connery’s entire Capitol career.
“You see a historic building that has to meet modern office standards,” said Connery on the tour, which included upper-floor crawl spaces with heating and cooling machinery and the occasional antique desk from the House chamber, kept in case there’s a need for spare parts. The sub-basement gas-fired boilers are close to the end of their working lives.
“We have hidden in the walls data cabling, voice cabling and all that was put in during the 1980s restoration so you can’t see it,” Connery said. “Fortunately there are vertical shafts originally used for ventilation originally that go from the attic down to fourth, third, second and first floors.
Underneath the blue rug with the hundreds of state seals on the floor of the House chamber, are entrances to crawl spaces with literally miles of cable.
Morgan credited Connery with allowing a former Capitol tour guide who has since died, Gerry Caughman, to pursue her interest in researching and preserving the dozens of Civil War battle flags from the various Connecticut regiments, including Black troops. “I think Eric’s support and recognition around making sure the flag project was done with coordination is a very positive legacy,” Morgan said. “Someone else might have said ‘no’ and nothing would have gotten done.”
The state’s annual budget for non-invasive flag preservation is about $12,000 to $15,000. During the recent tour, Connery unlocked a hidden fifth-floor work room full of shelves and long boxes containing 60 wooden poles and various kinds of battle flags, which were used to lead troops on their missions.
On a flat table was the flag of the 28th Regiment, which fought in Louisiana. Surrounded by clear fabric, the goal is to keep the flag together without affecting its current state. Part of the problem preserving the flags is where to display them. There just isn’t enough space to show them except in a few glass wall cases in the Capitol basement. Flags in the west entrance of the Capitol, called the Hall of Flags, are furled on poles but are slowly tearing because of gravity.
Connery envisioned giant glass drawers, but then visitors could only see one side of a flag. He pulled out a step ladder and reached high on a shelf for a box containing the pieces of a flag of the 15th Regiment, which was organized in New Haven in 1862, and fought in Fredericksburg, Va. and New Bern, N.C. It’s just a pile of mostly shredded red fabric that may never be put back together. “The good news is that’s really the only one,” Connery said. “The preservationists just couldn’t do anything with it.”
Up on the roof, Connery stood at an angle so the now-mottled dome, which is actually 12-sided and accentuated by a dozen stained-glass windows and pointed arches, was easier to see.
“Over 30-to-40 years that gold will wear off from wind erosion, and that has become noticeable over the last year so we’ve added that to the project to do the exterior,” said Connery, who had run school and bank building before answering a newspaper ad in the summer of 1995 for the job running the Capitol and adjacent Legislative Office Building, taking the job before asking what he’d be paid.
“If there is anything that’s a symbol for Connecticut, it is that building and that dome,” said Morgan, the member of the preservation commission. “The fact that we have been sadly so inattentive and now the gilding needs to be redone, reflects the state of the state. The physical appearance of our state capitol underscores the importance of having good laws and the importance of people passing those laws. It makes it harder to keep traditions and respect and people excited about what goes on here.”
WALLINGFORD — A recent meeting on transit-oriented development in downtown included a a deputy commissioner for the state Department of Transportation.
Deputy Commissioner Garrett Eucalitto gave a presentation during the June 30 event at HUBCAP Wallingford on downtown Center Street. Town officials and leaders attended to learn more about transit-oriented development. It was organized by State Rep. Mary Mushinksy, D-Wallingford.
Eucalitto started his presentation by talking about the General Assembly’s definition of transit-oriented development.
“It is the development of residential, commercial and employment centers within a half a mile of walking distance of public transportation facilities, including rail and bus rapid transit...”Eucalitto said.
The town’s train station is within a half mile of downtown.
With the state experiencing a migration of young working professionals, one way to retain the population is increasing transit oriented development, according to Eucalitto’s presentation.
“Housing and transportation are two of the largest expenses in a household budget,” Eucalitto said. “If you can eliminate some of that transportation budget, it would significantly benefit the household … The average person who lives near transit is five times more likely to use transit. If they work near transit, they are three and a half times more likely to use transit, thereby reducing their expenses in their household.”
The state of the town’s sidewalks also became a topic during the event. A 62-year-old man died last month after being struck while riding in his motorized wheelchair on South Main Street. Family and friends said he rode in the street because he felt the sidewalks were too bumpy. The accident remains under investigation.
“The current status of Wallingford sidewalks is pretty dire,” said Riley O’Connell, 2021 mayoral candidate.
Tom Dacey, a Wallingford resident who uses a motorized wheelchair, said he appeared in a video showing how cracks in the sidewalks make it difficult to maneuver his wheelchair.
In order for transit oriented development to be successful, Eucalitto said people need to be able to safely and easily get to transportation
“If we build a train station and you can’t get to it, then it is a failure,” Eucalitto said.
Eucalitto said the Community Connectivity Grant program, which provides funding for smaller scale infrastructure, can help towns improve safety for pedestrians and bicyclists. Over the past few years, the program has awarded around $39 million in grants to municipalities, including Wallingford.
Wallingford has adopted a plan to increase affordable housing. Jim Seichter, planning and zoning commission chairman, said the plan includes incentives for developers, including allowing more units per acre.
A developer can have 40 market rate units per acre, but if affordable housing is added, the number increases to 50.
“So you’re increasing that incentive for someone to do the affordable because they can have more units,” Seichter said.
Cathy Granucci, co–chair of the Linear Trail Committee, said incentives for developers are important, but the architectural aspects of downtown must also be maintained.
Seichter brought up the lack of shelter people receive while waiting for buses in town.
Eucalitto said the Department of Transportation has money set aside to for a statewide bus shelter improvement program. New shelters will include seats, a solar powered light and new technology to help riders know when the next bus is arriving.
“In the next year or so we hope to roll that out,” Eucalitto said.
Norwich — City Council members on Tuesday found a lot to like in the proposed $381 million school construction plan that would give the city four new elementary schools, a renovated middle school and new central offices for about $75 million less than chasing maintenance and repairs on the current aging and undersized schools.
Following a detailed presentation on the plan by representatives from the architectural firm Drummey Rosane Anderson, Inc., or DRA, aldermen stressed the real and projected savings the massive project would yield and praised the architects and School Building Committee for their efforts.
After an estimated 67% state reimbursement, city taxpayers’ share of the $381 million project would be $149 million, substantially less than an alternative “do nothing” option to keep the existing seven elementary schools, an unrenovated Teachers’ Memorial Global Studies Middle School and central office building.
Maintenance and repairs alone to the existing buildings are projected to cost $165 million over the next 20 years at today’s dollars, and $275.8 million with inflation. Very little of the work would qualify for state reimbursement, the architects said.
The proposal calls for new elementary schools, each housing about 525 students, on the grounds of the Moriarty Environmental Sciences Magnet School, the John B. Stanton School, the Uncas School and property where the Greeneville School once stood. Teachers’ Memorial would undergo a complete renovation to put it on par with the recently renovated Kelly STEAM Magnet Middle School.
DRA Project Manager Greg Smolley said the locations are central to projected future city population growth saving on transportation costs and and have adequate property for new playgrounds and sports fields at each location.
School central offices and adult education would move to the Samuel Huntington School. Wequonnoc School in Taftville would become a virtual learning center. The Thomas Mahan, Veterans’ Memorial, Bishop Early Learning Center and central offices in the former John Mason School all would be discontinued.
Alderman Derell Wilson said savings with the new project go beyond the energy efficient new buildings and lower maintenance costs. With more space and better facilities, Norwich could bring home special education students now transported to specialty schools outside the city.
Wilson said he also liked the prospect of having new playgrounds and sports fields at each school.
“The quick sound bite is, we would have four new elementary schools and a completely renovated and larger second middle school for $75 million less than if we pour money into the school system that we already have,” Council President Pro Tempore Joseph DeLucia said.
He added that the city would have three or four surplus buildings that could be sold or repurposed, one perhaps for a community center that residents have requested repeatedly.
Mayor Peter Nystrom requested the architects and School Building Committee include local school readiness program leaders in the discussions about including full preschools in each building. Norwich school readiness program, headed by the LEARN regional education agency, receives federal grants for more than 300 preschool slots in the city.
The City Council will hold a similar presentation for the public at 6 p.m. next Monday, July 11, in Council Chambers, with time for questions and comments.
The City Council will introduce an ordinance for bonding for the proposed school project at its July 18 meeting, with a public hearing on the ordinance planned for Aug. 1. The city must submit referendum ballot question wording to the Secretary of the State’s office by Sept. 1 to get the item on the Nov. 8 election ballot.
The Office of State Ethics fined a New York-based consulting firm $10,000 Tuesday for providing more than $3,000 in food and gifts — including hockey tickets and an overnight stay at a Greenwich club — to Connecticut Port Authority officials in 2017 and 2019.
Seabury Maritime, a subsidiary of Seabury Capital Group, provided some of those gifts while pursuing a business relationship with the authority, and others after securing a contract to help find an operator for state pier in New London, according to the consent order signed by Seabury and the state ethics office.
Seabury also has come under fire this year from another state agency. The State Contracting Standards Board concluded in February that a $523,000 “success” fee the port authority paid to Seabury in May 2018 is eerily similar to the “finder’s fees” scandal that sent a former state treasurer to prison in 2001.
“Private companies that seek to engage state and quasi-public agencies for contracts must understand that fostering good will with state officials and employees cannot involve provision of impermissible gifts,” said Peter Lewandowski, executive director of the ethics office. “Violation of the Code’s gift laws will be forcefully prosecuted by the Office of State Ethics.”
Between May and August 2017, Seabury provided gifts totaling around $800, the ethics office wrote in a statement. This included “food, drinks and a leather personal accessory to a CPA employee and the employee’s spouse at a charity event” in May of that year, and more food and drinks and an overnight stay at a Greenwich club to the same couple in August. Food and drinks also went to a member of the authority’s governing board in August, according to the state ethics office.
The Office of State Ethics does not identify people mentioned in a consent order who are not the focus of that order. The office also does not comment on whether other mentioned people are themselves the focus of another investigation.
In 2019, after securing a contract to advise the authority, Seabury Capitol provided another $2,300 in gifts, according to the report. These included food, drinks and a leather handbag to an authority employee and that employee’s spouse in April, and food, drinks and National Hockey League tickets to two authority employees in May, 2019.
The ethics office added that “prior to the initiation of this ethics matter, Seabury received reimbursement from the recipients for the cost of the hockey tickets and the May 9, 2019 food and drinks.”
But because these items weren’t reimbursed within 30 days of receipt, as required by state law, the gifts still were a violation. The other gifts from Seabury in 2017 and 2019 were not reimbursed by the recipients.
State law “prohibits any person from knowingly giving, directly or indirectly, gifts to a public official or state employee when that person is doing business or seeking to do business with that public official or state employee’s agency or department.”
The authority hired Seabury in May 2018 to help with the search for an operator of the state pier in New London. The new operator would help transform the pier into the staging area for a major, offshore wind-to-energy project.
The authority issued a $700,000 payment to Seabury that included a $523,000 “success” or reward fee — and that happened three months after Henry Juan III of Greenwich, who was a managing director with Seabury, had resigned from the authority board.
The state’s contracting board adopted a report in February that compared this success fee with the “finder’s fees” the General Assembly banned more than two decades ago. That ban followed a scandal in the late 1990s that sent then-state Treasurer Paul Silvester to prison.
Silvester, a West Hartford Republican, was sentenced to 21 months in prison after admitting he had accepted kickbacks, often referred to as “finder’s fees,” in exchange for steering investment of state-controlled pension funds.
Jeffrey Erickson, who signed Tuesday’s ethics consent order as acting chief financial officer for Seabury, could not be reached for comment Tuesday.
Scott Bates of Stonington, who chaired the port authority’s Board of Directors from 2017 through May 2019, also could not be reached.
Lamont appointed one of his chief economic development officials, David Kooris, in July 2019 to chair the authority board and to overhaul operations.
“This is an unfortunate reminder of issues that occurred under prior leadership,” Kooris wrote in a statement. “ … Under new leadership, beginning in late 2019, the authority performed a complete overhaul of its policies and procedures. With the assistance of the Office of Policy and Management and outside auditors, the authority updated its ethics policies and all employees and board members now receive annual ethics training and certifications. Contractors are similarly made aware of the proper protocols.”
Kooris added that “authority stakeholders should be reassured that matters from the past will be thoroughly and transparently investigated.”
Besides the state, other major “stakeholders” in this matter include Gateway Terminal — the firm hired to develop state pier — and Eversource and Ørsted North America, which will develop the wind farm.
The pier project, priced three years ago at $93 million, also has been criticized for several cost hikes which now place the price tag at more than $255 million. Connecticut’s share now stands at $178 million, with $77.5 million coming from private partners.