NJ Hires $485-Per-Hour Firm to Fight $271M Tunnel Tab

Hudson River tunnel had been most expensive public works project under way in nation

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    NEWSLETTERS

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    embers of labor unions hold a rally in support of the planned 'Access to the Region's Core' (ARC) rail tunnel between New Jersey and New York City October 19, 2010 in North Bergen, New Jersey. New Jersey Governor Chris Christie plans to kill the project due to budget constraints. (Photo by Ramin Talaie/Getty Images)

    The adage says spend money to make money, but NJ Transit is hoping to spend money to save money — specifically, the $271 million the federal government has demanded as repayment for the canceled rail tunnel project into Manhattan.

    NJ Transit's executive board on Thursday approved the selection of a Washington, D.C., law firm that will charge $485 per hour to challenge the Federal Transit Administration's tab.

    The measure passed unanimously minus the vote of state Transportation Commissioner James Simpson, who recused himself because he is a former head of FTA.

    NJ Transit Executive Director James Weinstein defended the selection of Patton Boggs LLP, a firm with experience in large-scale construction projects and government contracts. In addition to the attorneys' rates, clerks and assistants at the firm will be paid $125 an hour and paralegals $90 an hour, according to Weinstein.

    "We're fighting to keep $271 million. Whatever we pay the law firm is far less than what the federal government is asking us to pay them," he said.

    On Oct. 27, Gov. Chris Christie halted what was the nation's most expensive public works project because of potential cost overruns he said could total $2 billion to $5 billion or more.

    The federal government and the Port Authority of New York and New Jersey each had committed $3 billion to the $8.7 billion project. New Jersey's portion was $2.7 billion, and the state and Port Authority were responsible for overruns.

    The project to construct a second rail tunnel was projected to double train capacity between New Jersey and New York. When Christie pulled the plug, more than $600 million had been spent for engineering, construction and environmental studies.

    The FTA sent New Jersey a bill on Nov. 24 for its $271 million share, payable within 30 days.

    "We feel that the position the government is taking is not nearly as clear as they'd like to think it is," Weinstein said. "We feel very strongly about this and are going to pursue it."

    Weinstein didn't say what projects would be affected if the state is forced to pay back the entire $271 million, but noted that the amount represents a significant chunk of the agency's $3 billion budget.

    Earlier this year, NJ Transit trimmed executive salaries, cut service and raised fares as much as 25 percent to address a $300 million budget shortfall.

    Rail travelers could face another hit Jan. 1 if the commuter tax benefit isn't extended. Under the current plan, commuters can take up to $230 per month in pretax deductions; the benefit is scheduled to drop back to $120 per month if Congress doesn't take action.

    Weinstein said he has reached out to New Jersey's congressional delegation but said Thursday, "We're advising our customers to plan accordingly."