State lawyers are combing through financial documents provided by the owner of a burned-out Seymour factory to see whether money from a low-interest loan for cleaning up the site was used properly.
Questions about the loan were raised publicly last month by First Selectman Kurt Miller, who said during a selectmen’s meeting that Alex Budzinski, the owner of Housatonic Wire, set himself up as a $30,000 paid “consultant” to his own clean-up project.
The factory was destroyed by fire Sept. 11, 2010. Delays in cleaning up the site — near the intersection of River and Bank streets, in one of the most visible locations in town — have long frustrated town officials and residents.
The cost of cleaning up the property is being covered by a $200,000 low-interest loan from the state Department of Economic and Community Development (DECD).
Budzinski announced that he had obtained the funds from the loan in April, and estimated the majority of the debris on the site would be gone by Memorial Day.
Jim Watson, a DECD spokesman, said Tuesday that the agency requested documentation from Budzinski about how the money is being used. Lawyers are looking over the paperwork now.
“We’re reviewing it,” Wilson said. “In terms of what the documentation is, it includes the following: invoices for services, copies of checks paid, copies of checks received, copies of bank statements.”
Wilson said the purpose of DECD’s review is to determine “whether the contract we’ve entered into has been followed to date and to make sure funds have been expended appropriately.”
The original contract between Housatonic Wire and the DECD is embedded at the end of this story. Seymour officials alleged last month Budzinski created an addendum to the original contract without informing the state. The addendum, according to the town, set himself up to receive $30,000 for consulting work. The disputed part of the contract is posted below.
Wilson said he couldn’t put a timeframe on how long it would take for the DECD to review all the documents, or how many documents Budzinski sent them.
A message seeking comment was left with Budzinski Tuesday.
Miller said the town will wait to see what the DECD determines before deciding on how to proceed.
“I’m hoping that we’ll hear something this week or the beginning of next week,” he said.
Meanwhile, the clean-up remains stalled.
Miller said that last week the company Budzinski had contracted with to do the clean-up, EnviroGuard, obtained a permit to perform the next phase of its work, but that he “hasn’t noticed any work starting.”
“We just want to make sure that the state’s money is being expended in the proper way,” he said. “I think it’s pretty obvious that this was questionable.”
“When you’re using public funds, i think you need to hold yourself to a much higher standard,” Miller went on, saying it’d be one thing if Budzinski was paying for the clean-up out of his own pocket. “But when you’re using state money like this i think you need to be above and beyond reproach.”
But he wouldn’t say what, if anything, the town would or could do about the situation.
“Town Counsel and I have had many conversations, but we will weigh all of our options when the time comes,” Miller said.
Asked if those options included litigation, Miller said: “It’s a little premature to say specifically.”
“Our first priority is the buildings coming down,” Miller added. “This was a 60- to 90-day project, and we’re coming up on five months. I think we can all agree that this is unacceptable.”
The Valley Indy filed a request with DECD Tuesday for the documents sent to them by Budzinski.
