Budget Creates Private Company to Assist Homeowners – Must be Watched by the State

November 13, 2017

In the budget that passed recently the General Assembly began to address the issue of crumbling foundations.  The legislation that came out of General Assembly for the crumbling foundations was mostly good. However, there are some cautionary notes and they mostly involve the distribution of the funds.

Let’s start with the good news first; the general assembly authorized $20 million a year to address this problem. The commitment is for five years which undoubtedly will not be long enough but it was a very good start.

Legislation allows for the following:

  • Develop financial assistance eligibility requirements for residents applying for help
  • Develop a financial assistance application for homeowners
  • Provide monetary Financial assistance to homeowners in the form of grants
  • Distribute funds to eligible contractors for repairing and replacing crumbling foundations
  • Set up an appeals process for homeowners whose applications have been denied
  • Requires municipalities and the state building inspector to waive application fees for a building permit applications related to this problem
  • It will establish a training program for contractors who will be repairing these crumbling foundations
  • Prohibit the use of recycled material containing pyrrhotite to be used to make structural concrete unless the State building inspector approves of specific guidelines to do so.

Now for the cautionary note; the legislation establishes a private entity, a captive insurance company, to distribute the funds. This private entity has its own Board of Directors and reports to them.  While the State of Connecticut will receive quarterly reports from this captive insurance company we have no control over it and will not set the eligibility requirements.  I am extremely concerned about placing millions and millions of taxpayer dollars into the hands of a private insurance company without having absolute control over this company.  It is not the solution I was advocating for this problem.  We must watch this carefully in the months and many years ahead.

In the end, it is a start. The State is putting money in to help these homeowners.  However, we all must keep careful watch to ensure that the money goes to the homeowners and is not wasted in administrative costs by this private entity.