Connecticut officials have notified at least two municipalities that the state will not honor financial promises made by Konstantinos Diamantis, who is now at the center of a federal criminal investigation.
Over the past three months, local officials in Farmington and Hartford received letters from the state’s Office of School Construction Grants and Review informing them that the anticipated reimbursement rates for planned school projects were out of line with state rules.
The decisions have created turmoil in the towns and forced them to reassess how they will pay for millions of dollars in building costs they had expected the state to cover, and legislators are looking for a political fix.
Diamantis, who ran the school grants program for more than six years and served as deputy secretary of the Office of Policy and Management, was removed from his government positions on Oct. 29, 2021 — around the same time that the state was subpoenaed by a federal grand jury.
[The Kosta Diamantis timeline]
Since then, Gov. Ned Lamont has appointed new people to oversee the state’s school building program and instructed them to review dozens of school construction projects, toward which the state has contributed hundreds of millions of dollars.
As part of that ongoing review, the state sent letters to local officials in Farmington and Hartford, informing the municipalities that the state will not follow through on financial commitments made by Diamantis.
In both cases, the state told local officials that Diamantis had incorrectly calculated how much money the state would cover for the construction of school administrative offices.
Noel Petra, who was placed in charge of the school grant program following Diamantis’ exit, also explained that state law prohibited the office from setting a higher reimbursement rate for those projects.
“The Office of School Construction Grants and Review recognizes that the district was previously given different information regarding a higher reimbursement rate for the Board of Education offices,” Petra wrote to town officials in Farmington. “Unfortunately, that information was contrary to statute, and therefore we are not able to justify using it.”
The state’s decision to backtrack on past funding pledges could be extremely costly for the local governments that are affected.
The state’s decision to cut the reimbursement rate for part of the Farmington High School project could cost that town $915,000 that it didn’t budget.
And in Hartford, city officials may need to come up with an additional $16 million the state promised to cover as part of the Bulkeley High School project.
Lora Rae Anderson, a spokeswoman for the Department of Administrative Services, which oversees the school grant program, said Farmington and Hartford are the only municipalities to receive formal letters adjusting the reimbursement rates.
But she said the state also clarified the reimbursement rules for other municipalities that were just getting started with their procurement process for school projects.
Lamont and a group of high-ranking state officials held a press conference last week to emphasize the reforms they are making to the school construction grants and to highlight their attempts to instill public confidence in a program that remains the focus of an ongoing investigation.
“We have rebuilt the program already into a much more transparent and trustworthy program,” Petra told the crowd of reporters who gathered in the Capitol.
“We’ve met with dozens of the school districts. We’ve met with dozens of legislators. We’ve met with all of the industry stakeholders,” he added. “We have worked hand in hand with everyone to identify problems.”
The decision to reduce the state grant funding in Farmington has already set off a political backlash in that town.
Farmington’s board of education, the town council and the local school building committee all responded to the letter from the state by voicing shock and outrage.
Many of those officials said Diamantis made repeated promises in meetings that the state would cover more than 28% of Farmington’s new school administrative offices.
Yet town officials were informed in December that the state was only willing to pay for 14% of those costs.
“It’s not only disappointing. In some respects, it’s unacceptable, based on the conversations we had and the work we’ve done,” Meg Guerrera, the chairwoman of the Farmington High School Building Committee, said during a public meeting in December. “I don’t think I’m out of line in saying that. I’m sure we all probably feel that way at this moment.”
Farmington’s elected leaders said they relied on the reimbursement rates that Diamantis offered as part of their pitch to residents, who voted in a referendum to fund the new high school and related office space.
“We went out with numbers that were given to us by a representative of the state, and now we don’t have those numbers,” said Christine Arnold, a member of Farmington’s Board of Education. “And it’s not a little bit. It’s a significant amount.”
A written promise
A similar situation has also played out in recent weeks in Hartford, where city officials could face an even larger funding shortfall.
In that case, Diamantis vowed that the state would cover 95% of the $29.5 million for the administrative offices that are part of Hartford’s Bulkeley High School renovation.
Yet the new leaders at the Office of School Construction Grants and Review said in a Feb. 22 letter that the state can only cover 40%, or about $11.8 million, of the overall cost.
Howard Rifkin, Hartford’s Corporation Counsel, sent a letter back to the state at the beginning of March pushing back against the state’s decision to slash the reimbursement rate.
In that letter, Rifkin pointed out that Hartford received written confirmation from Diamantis about the promised reimbursement rate and approval for the overall cost of the new administrative offices.
“As you know, the city acted in reliance on the representation of the state official then-in-charge of school construction reimbursement, as memorialized in the attached
commitment letter, that the project would be eligible for Hartford’s full rate of
reimbursement,” Rifkin wrote.
“The written representation made in this regard by the state official responsible for overseeing the school construction program was incredibly significant,” he added.
That’s not the way the state views the situation, however.
In his letters, Petra emphasized that state law prohibits the Office of School Construction Grants and Review from unilaterally adjusting reimbursement rates, which are determined through a set funding formula that is developed by the Connecticut Legislature.
The only way around that, Petra noted, is for the legislature to pass a bill that adjusts the reimbursement rates for the projects that are now in question.
A political fix
There is already mounting pressure on Farmington’s legislative delegation to fix the financial problems.
The state senators and representatives for Farmington were recently questioned by members of the town council and the local board of education about the state’s decision to slash the reimbursement rate for part of the school project.
They promised to do what they could to make sure the town received the money it was promised.
“We hear you loud and clear. We are aware of it.” Rep. Mike Demicco, D-Farmington, told the town council. “What you were promised is what we will try to get for you.”
Sen. Derek Slap, D-West Hartford, said he was confident he could get it done.
“We will go to the mat for Farmington,” Slap told the board of education. “We have a lot of different pressure points we can apply, and we will use them all.”
Farmington’s lawmakers are also likely to have a powerful ally on their side as they seek the legislature’s help.
House Speaker Matt Ritter, D-Hartford, said he is aware of the cut to the school reimbursement rates and that Hartford’s six representatives and two senators are interested in remedying the problem.
“We’re going to look into it,” Ritter said. “The Hartford delegation will work hard at it.”