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Archive for the ‘Transportation’ Category

So, the ARC tunnel project will be put to rest in a fashion akin to lethal injection. We sorta knew a month ago that this was coming when Governor Christie suspended all new work. So, it was no surprsie when the final announcement came down Thursday.

Here is what is interesting: how quiet labor has been. The cancellation of the tunnel will mean the loss of 6000 jobs at a time when the building trades are running at 30% unemployment. We have heard outrage about the end of ARC – although mostly from Democrats. People down south and along the shore ( who voted for Christie in huge pluralities ) are probably satisfied that New Jersey’s money for ARC may soon be diverted to shore up the Transportation Trust Fund, and not some North J project. More on that in just a minute.

I’m told by a few people associated with organized labor that they have been “holding their fire.” and the reason is because the Christie Administration reached out to these groups and told them to mute their criticism if ARC goes down on the understanding that the Governor will indeed transfer that $2.7 billion originally slated for the tunnel into the TTF; thus guaranteeing future work for the trades on other projects – roads, bridges, highways.

Could it be??? Labor not supporting their friends the Democrats in order to cozy up with the Republican Gov??? Well, no one wants to talk about this on the record but that appears to be what is happening. I mean, as long as the union guys get work…who cares what it is, right?

But herein lies rub…critics say even a $2.7 billion shot into the TTF is a “short term fix.” Not necessarily. In a very under-reported development, when work on 100 projects statewide was suspended on Monday, then subsequently resumed after a bond sale, not all of them were actually – well , resumed. “Early phase work on new projects continues to be on hold,” says Joe Dee from DOT. That is pending a top to bottom review of their worthiness. That means a scale-back is coming to stop burning through so much TTF money so darn quickly. Moreover, at least one insider says Christie is looking at ways to make an infusion of cash go even further. For example, by taking salaries outta the TTF ( which is a lot of money ). The TTF money would then only be used for capital projects.

So, if that money wouldn’t be going to solid union salaries, is there a possible bait and switch here?? Could that mean New Jersey would wind up outsourcing the work to cheaper firms??? I’m not sure, but perhaps labor should investigate that before they hold their tongues on ARC’s suspension.

In conclusion, you gotta give the Gov credit. While he has a reputation for bluster, he has actually been quietly euthanizing his potential adversaries and buying off other critics with a mixture of carrots and sticks. Let’s do an update on the Teresa Ruiz situation. Christie was annoyed Joe D could not force her to abstain on the subpoena vote in the Senate last week ( see earlier post ). Was I the only one who noticed she was the only legislator not invited to share the stage with Christie at the UMDNJ event Wednesday???

Well, if the actual subpoena hearing this Thursday was an indication of how Ruiz is coping with Siberia, it sounds like she’s feeling awfully cold being out of the circle of trust. As Senator Kean was running interference before the hearing even started ( gotta give him credit too btw…the Schundler stuff was both damaging and new, and Kean did his best to smother and obscure it ) Ruiz chimed in on his side. In fact if you look at the broadcast piece I did for NJN News, she can be heard off-camera furiously interrupting Barbara Buono to second Kean’s motion that would allow Kevin O’Toole to substitute for Joe Kyrillos on the Legislative Oversight Committee. It’s worth a listen.

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When Governor Christie halted forward momentum on the ARC tunnel he expressed concerns about possible cost overruns. But there might have been something more going on here.

Democrats are speculating that Christie wants to use New Jersey’s $2.7 billion in ( supposedly ) committed ARC tunnel funding to instead shore up the Transportation Trust Fund. Christie has said that he will come up with a plan for TTF soon. And since we know it won’t involve raising taxes, and there is no magic pot of money hidden underneath the State House near Petty’s Run, this would be a logical fit.

In essence, the money could be redirected to the TTF. When reporters put this theory to Transportation Commissioner Jim Simpson in the hallway of the State House Annex Thursday he said, “I don’t know. I don’t know. I don’t know.”

Hmmmm. Do you think he knows?

Well,$1.25 billion of New Jersey’s ARC funding comes from the 2008 toll increases and is therefore under the control of the Turnpike Authority. Without having to go through the legislature, Christie could presumably redirect that money to the TTF. He wouldn’t even have to go through his old pal JBOC ( that’s an inside joke ). However, some of the money also comes from other sources, and the path to usefulness for those dollars is less certain. A good portion of those ( supposedly committed to ARC ) other dollars are from the federal gas tax. And that means Christie might also be able to redirect them without Democrats being able to do much of anything.

When Administrations change, so do priorities.

Programming Note: I wanted nothing more than to see Raiders of the Lost Arc when it came out almost 30 years ago. However, my parents were troubled by the scariness/violence ( since i was young ), particularly the ending scene where the Nazi faces melt off. However, A recent viewing of that film through modern eyes reveals that the questionable scene is not really “scary,” but laugh-out-loud funny with how fake it looks.

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My friend Michele ( btw – it’s pronounced ‘mik-kelly’ – he’s Italian. Just like Michael Corleone was called ‘Michele’ in Godfather while he hid out in Italy after shooting the police captain in the Bronx. “Try the veal, it’s the best in the city” ) had this great series of observations about the movie Star Wars. And since I began my blog posts about the DRPA with a Star Wars theme, it seems only appropriate that I bring it back to that.

So, Michele ( who was once introduced to someone actually named ‘Mick Kelly’…I wasn’t around for that college-era encounter but I hear it was pretty memorable ) theorizes that despite dressing up the movie characters in space garb, they are more or less wearing 70’s fashions. This despite the fact that the great adventure took place “a long time ago in a galaxy far, far away.” After all, Han Solo is wearing a vest. The haircuts on he and Luke Skywalker are pure 70’s ‘let it be’ look. And if you slow down the video you will notice that Chewbacca’s furry legs are actually shaped into bell bottoms. Swear to God. Check it out.

Anyway, no matter how hard you strive to achieve authenticity, what we do reflects who we are. What our culture is, what are values may be and even ( in the case of George Lucas’ 1977 film classic ) what we are wearing.

When NJN News first reported on a troubling culture within the DRPA back on June 30th, the agency’s first instinct was denial. They sent out a 6-page missive to every Senator in the state of New Jersey basically denying everything. They put the same report on their website where it laughably remained until just a couple of weeks ago. We all know what has happened since. There has been a complete about face. Just like alcoholics go through stages such as denial, anger and ultimately acceptance…so too has the top management at the DRPA. Although I was slightly baffled by John Matheussen’s comments before the cameras last week when he said “you guys know me as someone who never shies away from the media. Really?? Don’t we have you on camera in that first report refusing to speak with us?? Oh, right. We do.

And that brings me back the True Up – which is the way insurance commissions were split evenly between the two states ( see earlier posts ). I have enclosed this email exchange amongst the DRPA and Graham and Willis – the two companies involved in the McGreevey-era True Up arrangement. As you can see, as late as August 10 the Willis group is still demanding that they make the arrangement so that the company can get it’s share of commissions. This was long after Governor Christie and others questioned the practices of the DRPA. Documents are below, the exchange began on July 8 ( just click on them to enlarge ). And by the way, why on earth is former Public Safety Director Mike Joyce cc-ed here??? He’s the guy who was forced out for misusing an EZ-pass. Joyce also served as Solicitor for Pennsauken, and as Vice Chair Jeff Nash’s Assistant.

So, to tie in the movie metaphor ( Alright, alright…so I might be reaching a bit on this one ), no matter how much you try and change the appearance, ultimately who we are shines through. The actors and costume designers of the 70’s made a product that reflected their time despite efforts to overcome it. And as late as one month ago the current DRPA leadership team seemed incapable of breaking from the practices of the past. Can they be trusted to transform the agency now? The force is not with them.

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There were a coupla things Christie said outside the DRPA last week that deserve further amplification. the first is that these guys “need to get religion.” Without the authority to fire the top management at the DRPA, he is basically putting them on notice that they need to completely disavow the old ways, and embrace the new. Otherwise it’ll be death by a thousand vetoes, essentially rendering the DRPA useless.

But asking these guys to not only recognize the problems of the past but also completely disassociate themselves from their complicity with that past might be a tall order. They may indeed find religion, but isn’t it a little too little, a little too late? It’s like how Daryl Strawberry used to hit most of his homeruns – in like, the 8th inning when the Mets were already up by seven.

The other comment that slipped under the radar was the Governor’s contention that the True Up arrangement regarding insurance commissions is what he finds “most disturbing.”

The Pennsylvania Treasurer has already questioned the legality of this arrangement ( see earlier posts ). Basically it comes down to this: two firms Willis on the Jersey side and Graham on the Pennsylvania side were charged with finding insurance policies for the DRPA’s various projects. All commissions for finding the best policies were split 50-50 between the two companies ( and by extension the two states ). However, Graham claims that his firm was doing all the work. And he was still forced to split the payouts, which of course come from toll payer money.

The True Up was a McGreevey era ( do you think he also had a hand in Watergate, since all roads seem to lead back to him ??!! )   arrangement, so it predates CEO John Matheussen. But it continued through this past Summer; meaning it happened on Matheussen’s watch.

Here is Matheussen’s letter to DRPA Commisioner John Dougherty from last month saying that he basically has no information about the True Up. See the last paragraph, particularly the highlighted portion. ( just click on all of these documents to enlarge )

Here is an agreement about a True Up payment from September 2009 ( a year ealier ) from the Graham company. Note that Matheussen was cc-ed, meaning he personally received all the relevant information about the arrangement.

And here is a letter from Graham to Dougherty laying out the amount that has been paid out in the True Up dating back to 2004. As you can see, the check numbers are included ( just in case Comptroller Matt Boxer happens to read the Zachary Fink Blog…what’s up, Matt? How you doin? Talk soon ). It adds up to more than half a million dollars of public money.

So, as you can see once again, the record doesn’t paint a very flattering picture. The DRPA might need more than a towering homerun into the parking lot after the Mets already have the lead.

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There is a scene in the movie “Ghostbusters” where Bill Murray tells Harold Ramis that he is still  “a little fuzzy on the whole good-bad thing.” Ramis proceeds to lay out the ultimate doomsday scenario they face which involves imagining all life as they know it stopping instantaneously and every molecule of their bodies “exploding at the speed of light.” Suddenly, it’s quite clear. I mean, how couldn’t it be with that explanation?

Unfortunately, I’m still a bit fuzzy on the pot of economic development money at the DRPA. And the interview we did yesterday ( see below ) with CEO John Matheussen didn’t make it much clearer.

In a taping of NJN’s On The Record, Matheussen told NJN Senior Political Correspondent Michael Aron that in 2008 the DRPA approved a resolution ending the practice of spending toll money on those controversial economic development projects. But as we pointed out in the last post, The DRPA actually continues to spend that money including committing $1.5 million to the Army-Navy game over the next six years. That was voted on in 2009, long after the resolution supposedly stopping the practice was passed.

But wait, there is more. According to internal documents, the board approved 62 resolutions authorizing economic development spending since the resolution ( which supposedly outlawed it ) was passed on 8/15/08. That’s right, 62.

Matheussen explains that they are merely spending what was left over…not new dollars. Fine, but couldn’t that money have been be redirected back to the DRPA’s core mission? After all, wasn’t the intent of the ’08 resolution to end that controversial practice once and for all??? Or was it merely window dressing? Something doesn’t add up here. And it’s particularly noteworthy since there was a long, spirited debate during the DRPA special board meeting on August 25 about whether to continue toll discounts for seniors and others. we heard dire warnings that if the senior discount continues the loss of revenue could affect the agency’s bond rating. Apparently no one was worried about that bond rating when the agency spent money on clean energy wind turrbines on top of the aquarium that apparently do not spin.

Wednesday’s story. Be sure to watch the interview after the taped piece.

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My friend Dinny used to have this brilliant theory about how Disney World is like the American Vatican. Much the way Vatican City operates autonomously within the city of Rome, Disney World does the same within the confines of Orlando. That includes Their own municipal services such as garbage collection, and even their own security/police force.

However, the Vatican is home to a monotheistic religion that appeals to millions of people world wide…Disney encourages the worship of life-sized stuffed animals making it more like Neo-Paganism.

Well, autonomy has it’s benefits and it has it’s drawbacks. In the NewYork – New Jersey region and the Philly-New Jersey region there are numerous authority’s that operate independently. It’s a Robert Moses concept – create a Tri-boro Bridge And Tunnel Authority ( for example ) that can float it’s own bonds, has it’s own cops and even has the power of eminent domain. That way, these authority’s can do unpopular things, but aren’t really answerable to taxpayers.

The DRPA was created by an act of Congress and while both New Jersey and Pennsylvania have some say, there does not appear to have been a lot of scrutiny by either state.

At the August 18 DRPA board meeting, Pennsylvania Auditor-General Jack Wagner asked why the DRPA spends $250,000 each year for the Army-Navy game. It’s worse than we thought. According to documents obtained by yours truly, on 12/12/09 the board approved a six-year commitment on the part of the DRPA to the football game at a cost of $1.5 million. This is money that will be paid out of that now infamous economic development fund  ( the spigot of which was supposedly shut off in 2008 ).

In addition two other contracts from economic development money caught my eye. Two payments to Bellevue Communications. One is for a PR buy in March of 2009 worth $25,000, the other is to the same firm for $99,000 in July of the same year. Trying to get some clarification on what this money was used for, but it should be noted that the President of Bellevue Communications is Kevin Feeley, the former Deputy Mayor for Communications under Ed Rendell.

It’s like Disney World…the fun never ends.

Friday’s story without comment.

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“The Jersey guys stick together like glue.”

That is a quote from a Pennsylvanian with connections to the DRPA. More on where that came from in a minute, but first I’d like to share a couple of observations about Wednesday’s board meeting.

It appears as though the push for reform on the board is coming mostly from the Pennsylvania side. PA Treasurer Rob McCord pretty much distinguished himself as the most sensible guy in the room. He was echoed by Pennsylvania Auditor-General Jack Wagner, and Commissioner John Dougherty. The PA triumvirate argued, introduced additional reforms and complained about a DRPA structure that has apparently kept them in the dark for years when they sought basic information.

The Jersey Commissioners were far less vocal. Almost like they had an interest in protecting the current structure. For example, Richard Sweeney ( who wears a large pinky ring, which btw – makes him awesome in my book but may not actually go a long way toward debunking the negative stereotypes PA folks have about the Jersey guys ) didn’t say a word during the five hour meeting. In fairness, Jeff Nash made an eloquent opening statement, and John Matheussen chimed in early on…but for the most part the PA Commishes debated the resolutions amongst themselves.

Perhaps there is a problem with the structure of the board. I mean, why does Pennsylvania have it’s Treasurer and Auditor General as ex-officio members and Jersey has nothing like that?? Why doesn’t Matt Boxer have a seat on the board??? So, give Assemblyman Dominick DiCicco some credit for requesting a change to the DRPA governing Compact. He also lamented that no Jersey colleagues have joined him in this effort. He’s got a point.

Senate President Stephen Sweeney ( brother of the aforementioned Commissioner Richard ) blames the PA folks for blocking reforms. He says they opposed eliminating two positions Wednesday which would save the DRPA money. The latter is certainly true. They opposed eliminating the Assistant to the Chairman job because it is currently filled. And they opposed eliminating the Corporate Secretary job which is currently in litigation and should probably be handled delicately.

But I wanna circle back to that True-Up regarding insurance commissions. According to an insider there are $800,000 – $900,000 in commissions paid out by the DRPA each year to insurance brokers. Under a verbal agreement these were to be split between the Graham Company (PA ) and the Willis Group ( NJ ). But Bill Graham was reportedly unhappy because he was doing all the work, then splitting the commissions in a 50-50 arrangement.

Well, here is a little more on that. Apparently, three people did angrily split off from Graham, but they did not go to work for Willis. They went to work for Conner Strong. That is the firm of George Norcross. A source says Michael Joyce ( the former Assistant to the DRPA Vice Chairman Jeff Nash who most recently served as the former Public Safety Director until he got fired last month ) told Graham he had to fork over $60,000 in commissions to the West Agency – a minority broker. Graham supposedly agreed ( albeit reluctantly ) but then Joyce demanded another $60,000 for another firm. When Graham protested, Joyce allegedly threatened to take away the DRPA business from Graham altogether. As it stands right now “the Jersey guys” are supposedly trying to pull the DRPA out of  four year contract with Graham. In fact, I am told that since Graham wasn’t willing to play ball, the company already lost work it was getting from the Camden school district.

A source tells me the Willis group is being forced to pay $200,000 of it’s share of commissions to “a very powerful” politician. Not necessarily as a lump sum payment. It may very well get split into smaller sums and then distributed to various candidate campaigns or even non-profit groups that support Democratic candidates.

So, it sounds like those “Jersey guys” really do stick together.

DRPA CEO John Matheussen is said to have told investigators he knew nothing about this arrangement, but sources say an email chain suggests otherwise. And those investigators are apparently none too pleased.

here is last night’s story without comment. If the sync is slightly off just remember…it’s not you, it’s me.

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