Mayor: School Financing At Risk

Paperwork Delays For State Cited

NEW BRITAIN — Alarmed that millions of dollars in state funding might be at risk, Mayor Erin Stewart is pressing the school system to resolve delays in filing crucial paperwork.

Until there's a solution, the city might have to absorb $1 million to $2 million in short-term borrowing costs, Stewart said.

In a memo to Stewart last week, city Finance Director Lori Granato warned of an even more serious consequence. She said state aid for the $53 million Smalley School renovation and expansion might be in jeopardy, leaving the city to either pay the bills itself or halt construction.

“This is extremely disturbing. How in God's name will we pay for this?” Stewart wrote in a Sept. 14 memo to Granato.

Schools Superintendent Nancy Sarra, however, has told Stewart the situation is under control. The schools plan to submit all overdue documents to the state by Oct. 1, Sarra said in a memo to the mayor on Monday.

The dispute arose last week when Granato was in a conference call with officials from the state Department of Administrative Services.

The agency told Granato that New Britain schools were years behind in filing a final audit and other closing documentation for the $30 million Gaffney School renovation. Construction ended more than three years ago.

Without that project officially closed, the state won't supply its share of roughly $50 million in renovations costs for Smalley Academy, she said.

“To be clear, the city will receive no state reimbursement for Smalley until Gaffney is closed and deemed ‘final' per the state,” Granato told Stewart in a memo.

More troubling, Granato wrote, is that the administrative services department said it had no record of Smalley work getting underway. Without proper authorization, the state won't put up its $38 million share of the work, she wrote.

That leaves the city with the choice of temporarily borrowing up to $38 million to keep current on bills, or shut down the Smalley project until the matter is resolved, she wrote.

Educators, however, maintain that state aid is not at risk.

Sarra said she sent copies of three letters over the past year in which the administrative services department authorized the Smalley construction to proceed.

Stewart could not be reached Thursday afternoon for comment.