Cruz-Perez, Diegnan Bill Requiring Reimbursement After TTF Shutdown Clears Committee

Bill requires DOT to compensate local government entities for contractual delay damages

TRENTON – Legislation sponsored by Senator Nilsa Cruz-Perez and Senator Patrick Diegnan requiring the NJ Department of Transportation (DOT) to make payments or fully reimburse local government entities for delay damages resulting from the Transportation Trust Fund shutdown cleared the Senate Transportation Committee today.

In June of 2016, an Executive Order was issued by Governor Christie which halted all projects funded by the Transportation Trust Fund Authority that were not absolutely essential.  As a result, contractual delay claims have been filed across the State against counties and municipalities.  According to the New Jersey Association of Counties, the total amount for contractual delay claims for counties is at least $9,137,359.

The bill, S-2776, would require the NJ Department of Transportation (DOT) to make payments or fully reimburse local government entities for delay damages resulting from the Governor’s Executive Order halting all non-essential projects funded by the Transportation Trust Fund Authority (TTFA). Payment would be for any construction contract between local government entities and contractors.

“The work stoppage put many counties and municipalities on the hook for projects left in limbo,” said Senator Cruz Perez.  “Local governments were forced to take on the responsibility of ensuring the safety of their residents after that executive order. This bill ensures that our already cash-strapped towns and counties are not made to shoulder a heavy, long term financial burden for the cost they covered.”

“Replenishing the fund to fix our state’s roads and bridges was a significant accomplishment, and it took a lot of work to get it done and people back on the job. However, many counties and municipalities were caught in the crossfire and are now left with a big bill,” said Senator Diegnan.  “Local governments showed leadership by taking on the responsibility. This legislation will help them bridge the financial gap while also ensuring tax payers that the money is coming back.”

The bill would also prohibit DOT or any other executive branch agency from withholding, revoking, or otherwise canceling certain local aid due to the local government entity’s decision to use its funds to continue or complete a transportation project.

S-2776 cleared the committee 4-0-1 and will now head to the full Senate for further consideration.