HARTFORD — The state Department of Housing says it’s working to ensure that operations aren’t delayed for the nonprofit captive insurance company that’s in a hold until it has the funds to make payouts for crumbling foundations.
In August, the Housing Department transferred $850,000 to the company, but the remainder of a $20 million allocation remains in agency coffers. Housing spokesman Dan Arsenault said the department hopes to release the funding “as soon as possible.”
Michael Maglaras, superintendent of the Connecticut Foundations Solutions Indemnity Co., said last week that if the funding, which is the first of five $20 million installments, isn’t transferred by the company’s board of directors meeting next week, the nonpprofit’s continued existence could be in jeopardy.
Without the funding, the company cannot honor its contracts, he said.
“If I meet with my board on Nov. 27 and I don’t have that money, I’m going to, the following day, go up on the website and tell people we’ve shut down,” Maglaras said Friday.
Arsenault said Tuesday that the department’s goal is to release the funding in time to ensure the company can continue operations.
The State Bond Commission is expected to allocate four more annual installments of $20 million, and Arsenault said that future transfer processes would be more prompt once the Housing Department is finished with this initial contracting period.
He noted that despite some concerns from the public, the $20 million annual installments of bond funding are set by state statute and, once deposited into the Crumbling Foundations Assistance Fund, can be used only to address failing foundations.
The legislation also prohibits the nonprofit from using more than 10 percent of the money allocated in any calendar year on administrative and operational costs.
On Friday, Maglaras indicated that the state treasurer’s office also was taking a role in transferring the funds, but the office’s responsibility is merely to approve the process once the Housing Department completes its part.
A spokesman for the treasurer’s office said the office is aware of the urgency to approve the payment by early next week.
Arsenault was quick to add that the Gov. Dannel P. Malloy’s administration has been working to help homeowners with crumbling foundations and continues to do so.
“It is important to note that under Governor Malloy’s leadership, the state has already provided $5 million, and set aside another $1 million from the federal government for a testing reimbursement program to help better understand the scope of this problem,” Arsenault said.
“With any disbursement of state funding, there are administrative processes which must occur before the funds are released. In this case, we continue to conduct our due diligence and expect that more funding will be released soon. No doubt, CFSIC will be an important tool to assist affected homeowners.”
Maglaras declined to comment until after the company’s board meeting Tuesday.
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