Mold mess doubles city’s debt limit
The cost to repair damage to schools has finance officials planning for twice what they anticipated for the year
STAMFORD — Property owners, at least, will not get an extra tax bill this year to cover the ever-rising cost of removing mold from school buildings.
But the city’s debt limit will be twice what finance officials planned for the coming fiscal year, and probably for the following year, too.
Director of Administration Michael Handler last week asked the Board of Finance to increase the safe debt limit from the budgeted $25 million to $50 million for fiscal 2019-20.
Handler’s plan includes the same increase for fiscal 2019-20, raising the city’s borrowing capacity to $100 million for the two years.
His best estimate is that at least $60 million of that will be needed to clean mold from classrooms, hallways, school gyms and building ducts; replace Sheetrock and ceiling tiles; and repair roofs, windows, doors, walls, foundations and drainage systems so mold won’t return, Handler said.
But the amount could increase significantly, he said. Mold has been found in more than half of the district’s school buildings since the problem was detected over the summer. One school, Westover Magnet Elementary, had to be closed and students moved to a converted office building in the South End.
The estimated cost of repairs so far at Westover alone is $13 million to $23 million, Handler said. At Westhill High School, surface cleaning has removed most of the mold, except in the ducts, which can be accessed only by ripping out ceilings and walls, he said.
That just hints at the problems.
“I fully anticipate that our capital needs will grow,” Handler wrote in a letter to the finance board. “We are fortunate that our balance sheet is in a strong position to be able to accommodate our needs.”
It’s because Mayor David Martin’s administration put the city on a strict debt diet after borrowing $105 million in fiscal years 2015-16 and
2016-17 to build a new school on Strawberry Hill Avenue and a new police headquarters on Bedford Street, he said.
But mold has created a capital emergency, he said. Now a lot of work will have to be done with the $100 million the city may borrow in the coming two fiscal years, Handler said.
“If we don’t solve the problem with this money, we don’t get a second bite at the apple,” he told the board.
Then there’s the currentyear operating budget.
It was set pre-mold. When it became clear that the problem was beyond the Board of Education’s budget, the administration formed the Mold Task Force, which is headed by Handler and has its own fund.
So far the mold mess has drained $1.5 million from the city’s contingency fund, now nearly empty, finance board members said during their meeting.
Handler anticipates asking the board for another $1.5 million from a surplus in the 2017-18 budget, plus $278,500 from a school board surplus that year.
He also will request $1.6 million from the City Storm Reserve, established in 2013 to cover major weather events, plus $750,000 from the school board’s Legal Reserve after a case was settled without costing the city money, Handler said.
The total of those sources, $5.6 million, should cover mold-related costs through June 30, the end of this fiscal year.
“This $5.6 million would have minimal to no impact on city services because it is largely a redirection of available operating reserves,” Handler said.
So, he told the board, he sees “no reason for a midyear supplemental tax bill.”
But some finance board members and parents who spoke at the meeting said too many questions remain.
“When you ask us to set a safe debt limit … you kind of have an obligation to give us some sense of where that money is going to be spent,” board member Mary Lou Rinaldi said. “People have been asking, what happened? What’s going to be fixed? How much is it going to cost? ... We can’t keep
saying, we’ll let you know. Obviously, somebody wasn’t doing their job for the schools to get to this point. People have to be held accountable.”
Parents said they want assurances that the allocated money won’t be misspent because the same people who let school buildings fall into disrepair are still making decisions.
Handler said he can’t offer answers yet because the task force had to move fast to open a substitute site for Westover, and to clean other schools while children are in them. They are hiring architectural engineers, hydrogeologists and other experts to assess how water is entering the buildings, what went wrong and how to fix things.
He agrees that people need to know how the buildings ended up where they are.
The task force “is committed to uncovering all of the facts” and ensuring that the problems don’t recur, Handler said. Several factors are to blame, he said.
One is that some school buildings are poorly designed, he said. Other buildings were not constructed as designed, he said.
He cited a lack of proper maintenance, a failure to adequately fund capital budgets so buildings could be repaired, a “failure to hold people and processes accountable,” and last year’s record rainfall.
The Mold Task Force is investigating potential claims against contractors and others who have worked on school buildings, and notified the district’s insurance carriers about possible claims, he said.
Some parents asked the board to refuse to raise the debt limit until someone explains how the buildings were allowed to deteriorate; they left the room in anger when the debt-limit hike was granted.
Board member David Kooris addressed the parents who remained.
“Don’t think that this was the vote that resolved this,” Kooris said. “Come back when we’re actually talking about the capital projects (and) actually allocating money and … whether or not we’re going to spend it and what we’re going to spend it on … I hope folks stay engaged.”