Still no answer for New Canaan arbitration's 'communication breakdown'
Updated 10:29 am, Saturday, July 9, 2011
The Lakeview Avenue Bridge Arbitration Subcommittee of the Town Council continued its ongoing investigation last week by speaking to all three members of the Board of Selectmen and Town Administrator Tom Stadler.
Once again, First Selectman Jeb Walker took full responsibility for the missteps in communication after the town learned of the $650,000 arbitration award.
"I take full responsibility and accountability for everything that happened during this process, the good things and the things that didn't go well," Walker said.
"And I include Rob and Sally and Tom in that because they work for the town, and as the CEO I hold myself responsible for that."
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Walker stressed the need to focus more on the future in terms of figuring out best practices that could prevent a situation like this.
He said the problems were mainly constricted to the "breakdown in communication" after the award was handed down, and not during the arbitration process that racked up more than $800,000 in legal bills.
"Even though there were things that did not go well during this process, it is the exact same process that we have used in other arbitration situations. I'll remind everybody of the lawsuit from the contractors for Dunning Field," Walker said. "We wound up in a lawsuit with the contractor, followed the exact same process and we won that one. The last arbitration prior to that was on the transfer station. (It was) the exact same process with the same lawyer, Tim Fisher, and his firm and we won that one. And we went through this process with the same kind of confidence."
As he continued explaining the rationale behind pursuing arbitration, Walker reiterated how the town officials involved and their attorneys believed New Canaan had a strong case.
"Our primary duty was to follow the path, take the steps that we thought were in the best interest of the taxpayers of this town. Otherwise had we rolled over and not pursued this we would have been out quite a bit of money in just turning it over to Loureiro and we did not think that was the right thing to do," Walker said. "And we thought our case was a strong one, as did our counsel. And even as we went in to the arbitration process we had offered to the Loureiro Contractors a settlement, they turned that down. We offered to them, not arbitration, but the next step prior to that, they turned that down and insisted on arbitration. And we were confident at that time that we had enough of a case."
Selectman Sally Hines agreed on the part of pursuing arbitration, saying they relied on the knowledge of those who were intimately involved with the case to make the most intelligent decisions possible.
"Once a decision is made to go down a path, as I tell my children, there is no alternate reality machine that you could step into to see what the contra positive effect would have been or future would have been if you had chose another path," Hines said. "There are intangible reasons that litigation could be pursued, such as reputational defense, there is a point where one can't simply walk away. In this case, the understanding was when one enters arbitration, if one says we walk away it's an implied capitulation."
Walker came forth with many recommendations, which his colleagues Hines and Selectman Rob Mallozzi agreed with, but he stressed the most important one had to do with communication.
"I go back to the point that what can be improved is a better information flow and a better awareness and involvement of all the town bodies," Walker said. "In this particular case, we should have had a better communications process in place. It should have been, I hate to say it this way, second nature."
In addition to improving communication, other ideas discussed involved the idea of check signing. All checks going out in town have to be signed by the treasurer and it was revealed at the meeting that many of those signatures are simply stamped. It was a point that many, including members of the public, agreed should be improved immediately.
"I was appointed chairman of a nonprofit some years ago and checks above a certain level required two signatures, that of the chairman as well as the executive director," said Roger Williams, Republican candidate for Town Council. "My second day as chairman, the director called me up and said `Oh, would you stop by? We need to get your signature so we can make a stamp up so I can stamp a second signature on the checks.' And I said `It ain't happening here, not now.' The idea that we have checks of sizeable amounts that are going out with a treasurer, an elected official, the treasurer is allowing his signature to be used on a stamp for hundreds of thousands of dollars is absolutely unconscionable."
Of the three BOS members, Mallozzi, who is running for first selectman, was glad to see the process be forward looking and apolitical, though he did point out sensitivity to the fact that others involved in executive sessions concerning the arbitration last year have not yet been asked to come before the subcommittee.
"I am happy to share my opinions on what we can do better in the future, however, I have no desire to speculate or ruminate on what has happened in the past," Mallozzi said. "I especially appreciate the committee's acknowledgement of the political dialogue taking place in the community at this time. Your committee has previously established that a member of the Board of Finance and a member of the Town Council, who are running for public office in the coming Republican Caucus, were present at an executive session on Sept. 14, 2010, where information about the legal fees and the conduct of this litigation were disseminated. As of this time, both of those individuals have not been asked to come before this committee, thus my obvious sensitivity to being here tonight."
Board of Finance member and First Selectman candidate Paul Giusti, as well as Town Council member Tucker Murphy, who attends the subcommittee meetings as an ex-officio member of Town Council, were present at the Sept. 14 Board of Finance executive session according to the minutes. As pointed out at the last subcommittee meeting, that was the only executive session attorney Tim Fisher was able to attend.
The subcommittee will go more in depth with financial processes at its July 7 meeting, which happened after this paper went to press, where they will meet with Gary Conrad, New Canaan's chief financial officer.