New Haven Independent

The request, to build a new heating and cooling system underneath the plaza behind City Hall, comes as the city ends a 20-year contract to buy energy from the Chase family.

“We want to control our own destiny,” said Larry Rusconi, the city budget director.

The proposal arrives at a time when city, bracing for a $20 million increase in personnel costs next year, considers a spending freeze.

Protesting that the city is rushing the proposal through without giving them enough info, the Board of Aldermen’s Finance Committee passed the request on to the full board without taking a stance.

Rusconi made the case for the mid-year $5-million budget amendment at the committee’s meeting last week. Sitting at a large round table before skeptical aldermen, he argued that City Hall should seize the chance to break free from an inefficient system and take its own heating and cooling operations into its own hands.

For the last two decades, the city has been in contract with the Government Center Thermal Energies Partnership (a vehicle of the Chase Family Limited Partnership) to buy hot and cold water from a power plant in the basement of 200 Orange St. The water provides all the heating and cooling to City Hall and the Hall of Records. The 20-year contract expires on June 30, 2009.

As part of the contract, the city was given a “drop-dead” date: If it didn’t opt out of the lease by June 30, 2008, it would be locked into it for another 20 years. The arrangement, Rusconi explained, wasn’t working out in the city’s favor.

After it was built 20 years ago, the plant was never able to get enough customers to operate at full capacity, Rusconi said. It was built twice as big as it had to be, he said. City Hall is the only other customer using the plant besides the Connecticut Financial Center. With the plant running at 50 percent capacity, it isn’t efficient, and the city is paying the price, he argued.

So, when the “drop-dead” date hit, Rusconi and two colleagues looked at other options. They gave Chase notice that they’d terminate the contract when it expires. They made a decision to build their own plant, a dual burner using oil and natural gas, under the plaza behind City Hall.

To fund the project, they asked aldermen for a new appropriation and bond authorization for $5 million, in the middle of the fiscal year.

Will They Let Us Freeze?

At the Nov. 19 Finance Committee meeting, aldermen balked at the proposal.

“Why are you coming to us now? Why not sooner?” asked Hill Alderman Jorge Perez. The city has known for 20 years that the contract would end, he noted.

“It was a timing issue,” Rusconi said. At the drop-dead date, the city still didn’t hadn’t made up its mind. The city got an extension to think the matter over. The city commissioned an engineering report, which didn’t come back until July or August, he said.

“We didn’t do the work ahead of time, it looks like,” Perez jabbed.

“The biggest problem we had, was we don’t have a lot of room to build something like this,” said Edward Melchiori, a consulting engineer hired to work on the project. “Once we found a space for it under the plaza,” he said, the city had to weigh its options. They determined that the cost of owning a new plant, which would have a lifetime of 20-25 years, would be less than staying on with Chase.

Building the plant would take six to eight months, he said. The city needs to have its own cooling system in place by July 1. The plant could be built in that time, but it would be a tight squeeze.

To “allow us to prepare ourselves to produce the plant with a little less craziness,” said Melchiori, the city is negotiating with Chase for a time extension.

Carl Goldfield, the aldermanic president, questioned why everything was so rushed.

“I’m concerned that we had this contract for 20 years and now,” he said with a snap of the fingers, “we have to do this with a fast pace,” with a mid-year budget amendment.

“I don’t feel that it’s fair to the taxpayers to come after the budget and say we need something else,” he said.

“We tried,” replied Peter Shmigelsky, a government facility asset manager for the city. “In retrospect, we wish we could have been a little more aggressive, but honestly I felt we did the best we could to get this rolling.”

Nuclear Winter

Goldfield raised another concern.

What if the contract runs out and the city still hasn’t built the new unit? He said he’s never seen an undertaking of this size happen smoothly.

And then, what if, instead of letting the city extend its contract, Chase chooses the “nuclear option”?

“No one’s going to let us freeze in here?” he wanted to know.

“If they use the nuclear option,” said Melchiori, the city would use a temporary heating and cooling system. But he hoped it wouldn’t come to that.

Out in the hall, the trio of city workers regrouped. They told City Engineer Dick Miller, who was passing by, that the meeting didn’t exactly go as planned.

“I’m a little bit more nervous than I was at the start of the meeting,” Rusconi said as he awaited a vote. “I didn’t think it would be an issue.”

Rusconi grumbled about the contract the city had locked into, many years before his time.

“We’re the only customers paying 30 to 40 percent of the cost, but with no say at the table,” he said. “We want to control our own destiny.” Chase couldn’t be reached for comment for this story.

When it came time for a vote, aldermen were torn between feeling underinformed and not wanting to hold up the project.

“I’m not happy about the fact that we’re here at such a late moment,” said Goldfield, “but it’s spilled milk.”

Aldermen opted to send the item on to the full board without making a recommendation. It is scheduled for a final vote on Dec. 15.