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Bond Commission Approves Money For Home Repair Company

by Hugh McQuaid | Dec 13, 2013 2:51pm
(13) Comments | Commenting has expired
Posted to: State Budget, Taxes, State Capitol, Norwalk, Stamford

HomeServe USA press release

HomeServe USA ribbon cutting

In its last meeting of the year, the state Bond Commission approved $1 million in borrowing Friday to help an emergency home repair company move its headquarters from Stamford to Norwalk.

The bonding will assist the HomeServe USA Corporation in relocating its headquarters as part of an agreement to create 130 jobs and maintain another 109. In addition to a $1 million grant, the company is also eligible for a $3 million, partially forgivable loan and up to $5 million in tax credits. The project was the only item on an unusually short bonding agenda to be opposed by the group’s two Republican members.

Senate Republican leader and gubernatorial candidate John McKinney raised questions about HomeServe in a press statement Thursday evening. McKinney pointed to news articles on questionable business practices by HomeServe USA and its UK-based parent company.

The company has been fined and has been investigated by government agencies in the UK and states including Massachusetts, which fined the company $85,000, as well as Kentucky, and Ohio. The Better Business Bureau also has warned consumers of complaints against the company in various states across the country.

Among the allegations against Homeserve are claims the company sent communications to customers falsely appearing to be from local utility companies, or using logos intended to look governmental. The company also is accused of misleading customers on their insurance products.

“Here we are, handpicking another company for state funding even though that company has had several questions raised about its business practices. It is reckless and careless,” McKinney said in a press release.

A spokeswoman for HomeServe declined to comment on for this story. However, McKinney also leveled criticisms against Gov. Dannel P. Malloy’s administration for entering into the deal with HomeServe.

“Does the Malloy administration vet the companies it is providing millions of our taxpayer dollars to? Did anyone do any research or did they just write out the check?” he said. “Through a simple Google search, this is what I found.”

Economic and Community Development Commissioner Catherine Smith said the state was aware of the issues McKinney detailed Thursday.

“We looked at and discussed with the company pretty much all the issues that you have seen,” Smith told reporters after the Bond Commission meeting. “We became satisfied that they had dealt with and managed, to the satisfaction of their customers . . . all of the issues that were raised.”

Smith said the administration researched the company before it engaged them on the economic development deal.

When picking companies to partner in economic development programs with, Smith said the state prioritizes practical issues like whether the company is following state rules and regulations, is doing appropriate business, paying their taxes, and has a business plan that seems likely to succeed.

But she said the department also considers the public image of a company it plans to help financially support.

“And yes, do we also look at the softer side of this? Yeah, we learned from TicketNetwork that it’s a good idea to do a little bit of research and make sure we understand who we’re doing business with,” she said.

TicketNetwork is an online ticket exchange company that withdrew last year from a state economic development agreement following the arrest of its CEO Don Vaccaro. Vaccaro also had a lawsuit pending against him at the time his company entered into a deal with the state.

“To be honest with you, in HomeServe’s case, they raised the issue with us, which I found was extremely useful,” she said. “It is something that we want to take into consideration. Why? Not because we’re worried about [news reports] when we do the deal, but because we want to make sure the taxpayer dollars are being managed in a fiduciary sense, in a smart and careful way.”

Despite concerns about the HomeServe agreement, Friday’s Bond Commission meeting was not marked by partisan arguments. The commission ended up borrowing less than $1.8 billion in 2013. That number was a self-imposed bonding limit the governor set back in January.

During the meeting, Sen. L. Scott Frantz, R-Greenwich, thanked Malloy for not exceeding the limit.

“When I received the agenda for today’s Bond Commission meeting I felt like it was an early Christmas or holiday gift, at only $10.5 million. Clearly, this is below your soft bonding cap you gave us in the month of January,” he said. “I just want to say thank you for respecting it.”

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(13) Comments

posted by: JamesBronsdon | December 13, 2013  3:19pm

Is Frantz’s comment tongue in cheek or sincere?  I really can’t tell.  Thanking the overlord for not wasting all that he has laid claim to from his vassals?  That’s rich.

posted by: Noteworthy | December 13, 2013  5:00pm

Christmas came early. Here we are again, and Santa Danell is at it again - moving another company already in the state, to a new location in the state with visions of new jobs dancing in their heads…maybe.

posted by: LongJohn47 | December 13, 2013  6:01pm

As sleazy as this looks (and it looks pretty stupid), isn’t the larger story hinted at by Scott Franz? 

How much as the state borrowed the past year?  What was it for?  How does that compare to last year or the last ten years on average?  What are we getting in terms of jobs and economic development for our investment?

Stories on individual deals like this simply make people angry (and maybe they should be).  We need more in-depth reporting to give us the big picture and put things in context.

I, for one, don’t like giving incentives to move a company from one town to another, especially within CT.  I’d rather see new businesses given a lift in sectors that will produce growth down the road. 

We’re investing billions in new commuter rail between New Haven and Springfield.  How much economic development money is going into that region to really leverage the transportation dollars?

posted by: StanMuzyk | December 14, 2013  12:58pm

Gov. Dannel Malloy is out of step—as usual - but keeps dancing with our taxpayer money as a confused Santa Claus.

posted by: GoConnecticut | December 14, 2013  10:44pm

HomeServe USA, closed its Miami plant and laid off 160.  But they are almost doubling in size in Connecticut.

posted by: dano860 | December 15, 2013  12:28am

It would appear that their flim-flam look alike scam way be being perpetrated upon the good taxpayers of Connecticut.
I would love to understand the reasoning / justification behind the move and money being the big job retainer / grower that they claim it will be. Were they planning a move out of the State and this is just another form of extortion?
Magic money and magic job growth along with a magic ‘partially’ forgivable loan of millions. Something stinks in this sewage treatment plant called Connecticut.

posted by: StanMuzyk | December 15, 2013  12:12pm

What happens if Home Service USA does not create 130 jobs and maintain another 109?

posted by: GoConnecticut | December 15, 2013  12:40pm

HomeServe USA will receive a $3 million loan, two-thirds of which is forgivable if job targets are met.  So they lose $2 million if they do not meet job targets.

posted by: cliftonave | December 15, 2013  4:16pm

I had their policy needed them one night they kept me on the telephone at least 45 minutes line waiting for them to respond to an emergency call on a Saturday night my sewer backed up and it needed to be fixed NO response from this company. I called roto rooter the problem was fixed withen 1 hour for my out of pocket cost of over 500.00 I would like for them to pay this bill !! to make matters worse they called me to renew I told them NO and the girl assured me they would cancel this account,  GUESS what they debited my account for one more year I went to my bank called them from the bank told the girl I did not authorize them to take money from my account it took ten days for them to refund my money IWOULD NOT RECOMMEND THIS COMPANY TO MY WORST ENEMY

posted by: cliftonave | December 15, 2013  4:20pm

Can anyone answer this simple question how much money does the state owe in bonding money ???

posted by: cliftonave | December 15, 2013  4:24pm

HOME SERVE IS NOTHING BUT SCAM TO EMPTY HOME OWNERS WALLETS !!! THIER SERVICE IS NONEXISTANT I LEARNED THE HARD WAY WHEN I NEEDED THEM .

posted by: StanMuzyk | December 16, 2013  11:14am

Why doesn’t anyone vouch for HomeServe USA with a voice of confidence in their service?
Are they that bad?

posted by: LongJohn47 | December 16, 2013  3:09pm

cliftonave—here’s a link to get you started on the bonding status of CT
http://www.ct.gov/opm/cwp/view.asp?a=3010&Q=382918

and a bit about the process
http://www.state.ct.us/ott/aboutdebt.htm