As government funding dwindles, so may public disclosure

As Connecticut struggles to maintain and upgrade its aging infrastructure, residents may be faced with a choice:

* To pay less for expensive public works projects, and know very little about who’s building them or what they will look like;

* Or, to know more about how they’re being built and who’s building them, but pay more.

In this day of tighter budgets and less federal help, they may not be able to have both.

As state and local coffers have dwindled, public officials nationwide have embraced the “public-private partnership” — often referred to as P3 — where a public agency involves the private sector in designing and putting up the financing for public projects.

P3s have been touted as a way to save money and get things done in an era of raging deficits and public distaste for government spending. Connecticut has just started to dabble in them.

The Department of Transportation is planning to give a private developer $35 million to replace an aging parking garage in Stamford, at Connecticut’s busiest train station. The project will include a combination of residential, retail or office space.

The plan has important ramifications for commuters, 858 of whom are on a waiting list for a monthly parking permit there. Some 27,000 people get on and off Metro-North trains at Stamford daily. But because the DOT’s plan involves an unprecedented role of potential private developers in designing and financing the project, DOT Commissioner James Redeker has said that to protect the developers’ competitiveness, their names — and their proposals – will be kept secret from the public until the state chooses one at the end of the year.

Because the state, not the city of Stamford, owns the land, even top Stamford officials won’t know anything about the developers or the proposals. That doesn’t sit well with commuters or state legislators.

No input

“There has to be some kind of input from the legislature” on deals considered to be P3s, said state Sen. Gary LeBeau, D-East Hartford. “We have a right to see what’s going on.”

Colleen Murphy, executive director of the state’s Freedom of Information Commission, said in an interview that as public agencies look more to the private sector for help with financing, the public may get less information because of a need to protect proprietary information and trade secrets.

“We may be somewhat at the tip of the iceberg in this area,” Murphy said. “We may be on the verge of more of this.”

In Virginia, where P3s have been on the books for much longer and have been used for major transportation and education infrastructure projects, freedom of information advocates said they have had similar concerns.

“These were huge projects that involved a large expenditure of public money, and they were not receiving the same kind of scrutiny… especially in some of these transportation projects that take years to complete,” said Megan Rhyne, executive director of the nonprofit Virginia Coalition for Open Government.

At the same time, more and more people agree that P3s, which require some level of confidentiality, are the way to get plans moving — plans that may otherwise have been stalled for decades.

“Other states are doing this,” said Paul Brady, executive director of the American Council of Engineering Companies of Connecticut, based in Middletown. “Other people are doing this and they manage to make that compromise. You’re going to have to compromise some openness in terms of what you get in the early stages.

“You can’t do this completely in front of everyone, so there’s going to have to be some sort of trade-off,” Brady said.

‘Trade secrets’

Major portions of a contract procurement process have long been kept secret to protect proprietary information that bidders have included in their bids. In Connecticut, as in many other states, the law provides for an exemption of “trade secrets” from public disclosure.

But several years ago, the FOI commission’s Murphy recalled, a number of legislators and developers began to feel that “the trade secrets exemption wasn’t enough.”

In 2007, the General Assembly passed a broad bill that added language exempting many records relating to the contract award process.

The bill’s four sponsors were Rep. Linda Orange, D-Colchester, and state Sens. Edwin Gomes, D-Bridgeport; Joseph Crisco, D-Woodbridge, and LeBeau. Orange’s aide Matt Macunas said her sponsorship of the bill was not related to the freedom of information exemption and was instead focused on a section dealing with environmental permits. Gomes, who lost the primary election for his seat this year, did not respond to a request for comment, nor did Crisco.

LeBeau said he, too, was probably in favor of the bill for reasons unrelated to the FOI exemption. But when he was told how it’s been used, he said, “that may need to be modified.”

The P3 process and FOI exemption that are being invoked for the Stamford train station project reminded LeBeau of another P3 project that was signed by the state in 2009.

Gov. M. Jodi Rell announced that the state would enter into a 35-year contract with the private company Project Services LLC. The company would pay the state $1 million to renovate and manage 23 highway rest stops in Fairfield County along I-95 and the Merritt Parkway.

“It was a done deal,” LeBeau recalled thinking when it was announced. “… I thought that the state got shafted in that deal. I thought we could have done much, much better. And … the legislature had no input into that.”

Using similar reasoning involving concerns about releasing proprietary information, the state said it was unable to tell lawmakers very much about the deal before making it.

Frustration at the decision prompted the legislature’s Government Administration and Elections Committee to introduce a bill in 2010 that would allow the legislature to review and possibly veto long-term state contracts. The bill, which did not make it past committee, was drafted at the urging of then-state Sen. Andrew McDonald from Stamford, who had been critical of both the rest stop contract as well as attempts at P3s for the Stamford train station.

“I’m a member of the Transportation Committee and there was no disclosure to anybody on the economic substance of this deal prior to the administration signing it,” McDonald told Hearst Newspapers in 2010.

Now legal adviser to Gov. Dannel Malloy, McDonald did not respond to several requests for comment for this story. A spokesman for the Malloy administration, however, did call to say it would be “inappropriate” for McDonald to do so given his current position.

LeBeau said he may introduce such a bill again this year, along with modifying the exemption that was passed in 2007 to at least allow a closed hearing with leadership or members of the Transportation Committee.

‘Out of time’

Faced with heavy criticism at the only public hearing scheduled on his plans for Stamford’s train station, DOT Commissioner Redeker stressed the importance of speed.

“Frankly, I think we’re out of time,” he told the audience of 50 people at Stamford High School last week. “We’ve taken too long.”

Indeed, the state and city of Stamford have known for decades about serious deficiencies in one of Stamford Transportation Center’s parking garages, which was built in 1986 and has 727 parking spaces. Plans to tear down the garage and build a bigger one have dragged on for almost as long.

In 2010, Rell announced plans with an unnamed private developer to build a new parking garage with more spaces. But at the urging of Stamford legislators who were concerned that the garage would be built too far away from the station, the General Assembly added last-minute language to a transportation bill preventing that from happening, which spurred Rell to veto the bill. The legislature overrode her veto, but the project never happened.

The city and the DOT had made earlier attempts to replace the garage. Years ago, Redeker told those at the Stamford public hearing, DOT tried to solicit public proposals for the project from private developers.

“How many did we get? Zero,” he said. The reason was, developers were afraid of giving away competitive trade secrets.

Frosty Landon, former editor of the Roanoke Times and founder of the nonprofit Virginia advocacy group, said he heard that defense time and again as Virginia began large-scale infrastructure projects using P3s.

“It was a hurdle that we could never really get past, because those who argued for the partnerships insisted that there could be only confidentiality in the early stages or that there wouldn’t be bidders,” Landon said.

At the same time, he added, an argument could be made that “you need these partnerships in order to get things done … whether it’s a toll road, or whether it’s a schoolhouse.”

P3s, and the changes in public disclosure that go with them, may be “a necessary evil, if you will,” Landon said.

Virginia recently used a public-private partnership to add more lanes to its notoriously congested I-495 highway. The process to pick a bidder was competitive, but not public — and when commuters were told the project would be paid for through tolls, many were upset.

“It’s aggravating for some folks,” acknowledged Rick Norment, executive director of the Arlington, Va.-based nonprofit National Council on Public-Private Partnerships. But, he added, “This is how the process generally works.”

In response to concerns, Norment said, the state “went on a very aggressive public education campaign,” explaining that only the new lanes would be tolled. Before the campaign, Norment said, 75 percent of respondents to a poll were against the project. Afterward, 65 percent were in favor.

Releasing all documents and the final plan after the decision was made proved helpful in this case, Norment said. Responding to requests from public commenters, developers altered their plans so that fewer homes would be demolished.

“We’re very strong advocates of full, open disclosure,” Norment said. “But one of the things that occurs in the early stages is, in some of the proposals, people are going to come up with dollar figures, technical skills, intellectual property … there’s a time to share the information and a time to let the process work itself out a bit.”

‘That’s our garage’

Whatever the concerns are, Norment said, P3s are moving forward. Five years ago, 21 states had statutes allowing them for transportation projects; that number is now 34. New York, Maryland and other states are considering legislation right now. Connecticut passed a bill in October authorizing a broad range of P3s, and requiring the governor to approve five such projects by 2015.

William Tong, state representative from Stamford, said in an interview last week that he understood the delicate balance that needs to be struck between public disclosure and getting a project done.

“People need to understand that the public process, particularly in this state, is almost tortured. It’s very slow,” he said.

“This is an effort to get private developers to give proprietary confidential bids so that they don’t feel like they don’t lose their intellectual property. But we want those ideas. So how do we make that happen?”

At the same time, he hopes that the DOT will modify its process for choosing a developer in Stamford so commuters will have some say before a decision is made.

“We need to hear from the commuters because that’s our garage,” Tong said. “Frankly, it doesn’t belong to the state. It doesn’t belong to the developers. It belongs to the people of this city and the commuters that use that station.”

This story is the result of a reporting partnership between the Mirror and WNPR. Listen to a radio version of this story here.