Attorney General: The Honorable M. Jodi Rell, Governor, Formal Opinion 2007-011, Attorney General State of Connecitcut

Attorney General's Opinion

Attorney General, Richard Blumenthal

June 21, 2007

The Honorable M. Jodi Rell

Governor

Executive Office

State Capitol

Hartford, CT 06106

Dear Governor Rell:

You have asked me several questions regarding the funding the University of Connecticut (“UConn”) may use to repair code violations discovered in buildings constructed or renovated under the University of Connecticut 2000 Act (“UConn 2000”), governed by Conn. Gen. Stat. §§ 10a-109b through 10a-109ff, as amended by Public Act  No. 06-134, including the third phase of the program, often referred to as “21st Century UConn.” 

 

This office concludes that the General Assembly’s primary concern in enacting Public Act 06-134 was immediate repair of all code violations in UConn buildings to protect the safety of students and employees.  The UConn 2000 statutes provide numerous allowable sources of funding for UConn 2000 projects.   Neither the explicit terms nor legislative history of Public Act 06-134 provide clear guidance as to any particular source of funding for code violation repairs.  Statutory language and remarks by legislators render uncertain and ambiguous any intent to use UConn 2000 bond funds for such repairs.  Only action by the legislature can resolve the significant uncertainty about how code violation repairs will be paid.  The General Assembly should clarify the specific funding sources that may or may not be used to pay for these repairs. 

 

As a matter of sound public policy,  I urge the General Assembly to prohibit the use of student fees and tuition to pay for such repairs.   Burdening financially hard-pressed students and their families with the cost of  code violation repairs is unfair and violates common sense.  They were in no way responsible for the code violations.  They are beneficiaries, but certainly not the sole beneficiaries, of corrective action.  All Connecticut shares the educational and economic opportunities the University provides.  Indeed, my office has been informed by University officials that they agree.1

 

“The University of Connecticut 2000 Act” was enacted “to promote the welfare and prosperity of the people of the state and the continuation and improvement of their educational opportunities by approving a special capital improvement program for the University of Connecticut.”  Conn. Gen. Stat. §10a-109b.  The UConn 2000 construction program was declared to be “For the benefit of the educational and economic development needs of the state and the University of Connecticut, all to the public benefit and good.”  Conn. Gen. Stat. §10a-109b. To accomplish this objective, the General Assembly granted the University the power to “borrow money and enter financing transactions in its own name, on behalf of the state, … [and] to construct projects and assure a state commitment to support the financing of the acquisition, construction, reconstruction, improvement, and equipping of facilities, structures and related systems ….”2  Conn. Gen. Stat. §10a-109b.

 

The UConn 2000 statutes provide numerous allowable sources of funding for UConn 2000 projects.  Conn. Gen. Stat. § 10a-109d(a)(13) granted the University broad powers to establish and maintain “various funds and accounts” “[i]n order for the University to construct and issue securities for UConn 2000 and to otherwise carry out its responsibilities and requirements under sections 10a-109a to 10a-109y, inclusive.”  Conn. Gen. Stat. §10a-109d(a).  These funds and accounts include:  “university operations, bond proceeds and special debt service requirements for securities issued, renewal and replacement and insurance, special capital reserve and operating reserve, special external gifts, pending receipts, assured revenues, project revenues … and other funds or accounts as may be more particularly required.”  Into those funds and accounts are to be deposited “(A) All proceeds from the sale of all securities; (B) All fees, tuition, rentals and other charges from students, faculty, staff members and others using or being served by, or having the right to use or the right to be served by the university or any project; (C) All fees for student activities, student services and all other fees, tuition and charges collected from students matriculated, registered or otherwise enrolled at and attending the university …. pledged under the terms of financing transaction proceedings; (D) All rentals from any facility or building …; (E) Federal and State grants, gifts, state appropriations, and special external gift funds; (F) All other assured revenues; and (G) Project revenues.” Conn. Gen. Stat. §10a-109d(a)(13).

 

The projects comprising the UConn 2000 program are set forth in Conn. Gen. Stat. § 10a-109e(a), together with the estimated cost for each project.  According to Conn. Gen. Stat. §10a-109e(b), the “plan of funding for UConn 2000” shall be the proceeds of general obligation bonds issued prior to June 7, 1995, securities issued in the amounts authorized by Section 10a-109d(a)(10) and the proceeds of the special External Gift Fund.  These bond funds are commonly referred to as the “UConn 2000 bond funds,” although as set forth in Conn. Gen. Stat. §10a-109d, other enumerated sources of funds may be used for UConn 2000 projects.

 

In 2004, UConn learned that a number of newly constructed and renovated UConn 2000 projects did not comply with the State Fire Safety Code and State Building Code.  Immediate remediation work was necessary and was begun to bring those buildings into compliance and protect the safety of the students and employees at UConn.  The General Assembly, through Public Act 06-134, enacted a series of measures to address these serious construction problems in the UConn 2000 program, including the establishment of a “Construction  management oversight committee”  (Conn. Gen. Stat. §10a-109bb) and a “Construction assurance office” (Conn. Gen. Stat. §10a-109cc) to oversee the ongoing remediation and construction process at UConn.

 

The General Assembly’s primary concern was that the Fire Safety and Building Code violations be corrected immediately to ensure the safety of UConn students and employees and that the buildings constructed and renovated under the UConn 2000 program would continue to be available “for the educational and economic development needs of the state and the University of Connecticut.”  Conn. Gen. Stat. §10a-109b.  As stated by Representative Noujaim during the debate on Substitute House Bill 5695:

 

 “I am hoping that this oversight is going to ensure that all of the past problems that took place during the construction phase, are going to be taken care of.  And I know that it is going to cost the State of Connecticut and its taxpayers of Connecticut more of their hard-earned money, to support these projects.  However, the safety of the students at UConn and the safety of the Administration is so much at risk, and this has to be taken care of.” 

 

49 Conn. H.R. Proc., pt. 14, 2006 Sess. 004264 (April 28, 2006). 

 

This directive for immediate action to protect the safety of UConn students and employees was echoed in the Senate: 

 

“As soon as we can fix all these problems, we can feel even better about what we are doing at UConn and the safety of the students that are there, the safety of the personnel, and I’m very pleased that this bill is here.” 

Remarks of Senator Stillman, 49 Conn. S. Proc., pt. 10, 2006 Sess. 003140 (May 2, 2006).

 

To achieve this safety goal, the General Assembly determined that immediate inspections and corrective action were needed for all UConn buildings, including those statutorily exempt from inspection by the State Fire Marshal and State Building Inspector (so-called “non-threshold buildings” that do not meet the statutory “threshold” for such inspections).3  The General Assembly directed the Commissioner of Public Safety and UConn to enter into a memorandum of understanding “for the purpose of ensuring compliance with the Fire Safety Code and the State Building Code” with respect to all buildings or building projects that are part of UConn 2000.  Conn. Gen. Stat. §10a-109ff.  In addition, the newly created Construction Management Oversight Committee was directed to “review and approve the policies and procedures” developed by UConn concerning “building and fire code compliance … and … project and program budgets and schedules….”  Conn. Gen. Stat. §10a-109bb(b).

 

Code work is designated as part of a specific UConn 2000 project.  Section 10a-109e establishes “Deferred Maintenance/Code/ADA [American with Disabilities Act] Renovation Lump Sum” as a UConn 2000 project, with an approved estimated cost of $39,332,000 for fiscal years 1996-1999 and $215,000,000 for fiscal years 2005-2015.  Section 10a-109e also establishes “Deferred Maintenance and Renovation Lump Sum Balance” as a UConn 2000 project with an approved estimated cost of $104,668,000 for fiscal years 2000-2005.  The terms Deferred Maintenance, Code and ADA Renovation were not defined in the original UConn 2000 statutes. 

 

During hearings before the legislative Higher Education and Employment Advancement Committee, the cost of repairing the code violations was discussed extensively.  It was the apparent intent of  the legislators at that hearing that UConn 2000 bond funds not be used for code violation corrections.  Consequently, representatives from the University of Connecticut stated that UConn did not plan to use 2000 bond funds on code violation corrections, but instead proposed using other allowable sources of funding for UConn 2000 projects.  Joint Standing Committee Hearings, Higher Education and Employment Advancement, 2006 Sess. 000785-000786 (March 7, 2006).  Instead of using UConn 2000 bond funds, UConn proposed funding the repair of code violations from payments by the contractors who constructed the buildings or from UConn operating funds.  Joint Standing Committee Hearings, Higher Education and Employment Advancement, 2006 Sess. 000785 - 000786 (March 7, 2006).4

 

Jonathan Pelto, former Co-Chairman of the Governor’s Commission on UConn Review and Accountability, testified that the General Assembly should ensure that student fees and tuition not be used to pay for code violation repairs because "The very people who are most innocent in the negligence to date" should not "be asked to pay the costs of repairing the mistakes of both contractors and the management in its oversight." Joint Standing Committee Hearings, Higher Education and Employment Advancement, 2006 Sess. 000819 (March 7, 2006).  Instead, Mr. Pelto urged that the repairs be paid from UConn 2000 and UConn 21st Century bond funds:  "UConn 21st Century money needs to be diverted first and foremost, to correct the mistakes to date."  Joint Standing Committee Hearings, Higher Education and Employment Advancement, 2006  Sess. 000819 (March 7, 2006).

 

During the House and Senate debates on Substitute House Bill 5695, the legislature did not discuss how to pay for the code violation repairs.  In enacting Public Act 06-134, the General Assembly did not either mandate or prohibit any of the numerous allowable statutory sources of funding for the repairs.  Instead, the legislature required UConn to report to the General Assembly by December 1, 2006 “any findings of violations of the Fire Safety Code or the State Building Code … Such report shall include an initial schedule to address the violations, the approximate costs and proposed funding sources.”  Public Act 06-134, Section 15 (emphasis added). 

 

The General Assembly had a  separate concern that appropriate maintenance was not being conducted on an ongoing basis.5   Public Act 06-134 defined for the first time the “deferred maintenance” portion of the “Deferred Maintenance, Code/ADA Renovation Lump Sum” and the “Deferred Maintenance and Renovation Lump Sum” UConn 2000 projects set forth in Section 10a-109e.  Although the General Assembly's expressed concern with deferred maintenance appeared to be unrelated to code violation repairs, the General Assembly excluded code violation corrections for certain non-threshold buildings from the definition of "deferred maintenance": 

 

 (29) “Deferred Maintenance” means repair of an infrastructure or structure, that was not maintained, repaired or replaced in the usual course of maintenance and repair, except for repairs performed solely to correct code violations that were applicable at the time of project completion and were for named projects pursuant to section 10a-109e, (A) which did not meet the threshold limits, as defined in section 29-276b, and (B) were completed prior to July 1, 2006.6

  

Although Public Act 06-134 specifically defined “deferred maintenance” to exclude code violation repair work for certain non-threshold buildings, the legislature did not address the funding sources for code violation repairs.  Public Act  No. 06-134 did not change the UConn 2000 project status, the allowable funding sources set forth in Conn. Gen. Stat. §10a-109d(a)(13), or the bond funding for “Code” or “ADA Renovation,” established in Section 10a-109e.  Nor did the General Assembly in separately defining and ensuring that deferred maintenance would be performed, appear to prohibit UConn 2000 bond funds from being used for code violation repairs under the "Code/ADA Renovation" bonding category in Section 10a-109e. In fact, the 2006 legislation specifically authorized the Construction Management Oversight Committee to review and approve, for all UConn 2000 projects, UConn’s “policies and procedures,” including those for “building and fire code compliance” and for all “project and program budgets and schedules.” 

 

Nevertheless, language used by the legislature in its new definition of "deferred maintenance" - - a UConn 2000 bond project - - to exclude code violation repair work for certain buildings, together with the legislative discussions, left ambiguous and unresolved key issues as to funding sources.

 

Clearly, code violation repair work was a priority to the General Assembly in 2006.  The legislature neither mandated nor prohibited use of any statutory UConn 2000 funding source, including UConn 2000 bond funds and the so-called 21st Century UConn funds allocated under the term “Code” in Conn. Gen. Stat. §10a-109e(a), to correct code violations.  It left these issues unresolved and therefore uncertain.  Comments during the proceedings  on the 2006 legislation expressing an intent not to use UConn 2000 bond funds for the code correction work, together with the new definition of "deferred maintenance"  excluding code violation repairs, made the result enigmatic as to the funding sources for code violation repairs.

 

The General Assembly must clarify its intent as to funding code violation repairs.  As a matter of sound public policy, I urge that the General Assembly prohibit using student fees and tuition to pay for such repairs.  Burdening financially hard-pressed students and their families with the cost of such repairs would violate fundamental principles of fairness and common sense. They were never notified of the expense.  They were in no way responsible for the code violations.  They are beneficiaries, but certainly not the sole beneficiaries, of the corrective work.  All of Connecticut shares in the educational and economic opportunities the University provides to the state.

 

Please feel free to contact me if you require further information.

 

Very truly yours,

 

 

 

RICHARD BLUMENTHAL

ATTORNEY GENERAL



1 It is possible that some student fees or tuition are "pledged under the terms of financing transaction proceedings."  Conn. Gen. Stat. §  10a-109d(a)(13).  Bond counsel should be consulted prior to any legislative action that may affect such possible financial transactions.

 

2 The powers given to the University are more specifically detailed in Conn. Gen. Stat. §10a-109d and include the power to:  contract directly with architects, accountants, engineers, attorneys and securities counsel (§ 10a-109d(a)(5));  “plan, design, acquire, construct, build, enlarge, alter, reconstruct, renovate, improve, equip, own, operate, maintain, dispose of and demolish any projects, or any combination of projects” (§ 10a-109d(a)(6)); “acquire by purchase, contract lease, long-term lease, or gift, and hold or dispose of, real or personal property…and to hold, sell, assign, lease, rent, encumber” such real or personal property (§ 10a-109d(a)(7)); receive grants, subsidies or loans from federal and state agencies (§ 10a-109d(a)(8)); receive and accept aid or contributions of money, property, labor or other things of value (§ 10a-109d(a)(9)); “borrow and issue securities” (§ 10a-109d(a)(10)); “to do all things necessary or convenient” to carry out the construction program (§10a-109d(a)(11)) and “to fix and collect fees, tuition, charges, rentals and other charges for enrollment and attendance at the university and for the use of projects or any part thereof” §10a-109d(a)(12).

3 Conn. Gen. Stat. §29-276b defines “threshold” buildings as those having four or more stories, greater than sixty (60) feet in height, with a clear span greater than 150 feet in width, containing one hundred fifty thousand square feet of total gross floor area, or intended for an occupancy greater than 1,000 people.

4 UConn did not suggest using student fees and tuition for this purpose.

5 “In fact, if there was a problem that existed, greater than anything else, it’s not the amount of money we are spending.  It was that, of the buildings that were there we weren’t even taking care of them.  This Bill takes the first step to eliminate that problem.  It says we’re going to first off, define what deferred maintenance is, and then, we’re going to issue an annual report of what deferred maintenance exists on all of the campuses, and what it will cost to fix it.”  49 Conn. H.R. Proc., pt 14, 2006 Sess. 004270 (April 28, 2006) (remarks of Representative Heagney).

 

6 This definition is now codifed as Conn. Gen. Stat. §10a-109c(29).  UConn was also directed to submit to the Construction Management Oversight Committee an annual budget for deferred maintenance for its review and approval and UConn was required to spend all UConn 2000 funds allocated to deferred maintenance only on deferred maintenance.  Conn. Gen. Stat. §10a-109dd, 10a-109ee.  We presume the reference to UConn 2000 deferred maintenance funds in Conn. Gen. Stat. §10a-109ee refers to the “Deferred Maintenance” portions of the “Deferred Maintenance and Renovation Lump Sum Balance” and the “Deferred Maintenance/Code/APA Renovation Lump Sum” UConn 2000 projects  set  forth  in Conn. Gen. Stat. §10a-109e.

 


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