BELMAR, NJ — Belmar has been thwarted in its efforts to recover $600,000 in professional services fees paid to the engineering firm improperly hired for the federally funded Lake Como stormwater outfall pipeline project.
And it all comes down to precedent, according to the N.J. Department of Community Affairs (DCA), which is responsible for addressing conflicts arising from disaster recovery grants. It recently informed the borough that the U.S. Department of Housing and Urban Development does not release grant funding when a company has been awarded a contract in violation of federal bidding laws.
“In every case, including Belmar’s, HUD declined to grant any waiver of what it opined to be a clear violation of federal procurement law,” wrote Lt. Gov. and DCA Commissioner Sheila Oliver in an August 26 letter to Belmar Mayor Mark Walsifer.
And that’s what happened in September 2015 when the borough under its previous administration awarded a contract for “construction management and administrative services” to Maser Consulting — without putting the project out for a competitive bid, according to the state Attorney’s General Office, which initially notified Belmar in February it would not be reimbursed.
The Red Bank-based engineering firm was found by state and federal officials to be ineligible to bid on the project because it had performed preliminary engineering studies and other work for Belmar in preparation for submitting the application for the $6.2 million HUD-funded project.
Since then, Walsifer and other officials in the borough’s new administration have been in contact with HUD officials — and even made a trip this summer to Washington, D.C., with Congressman Chris Smith to plead their case and see whether there was any retroactive action that could be taken to bring the borough into compliance or satisfy the federal requirements.
But because HUD was not swayed by the borough’s predicament, other options to recoup the $600,000 will now be explored by Borough Attorney Jerry Dasti, according to the mayor, including the possibility of litigation to recoup the lost funding that was part of the Superstorm Sandy relief aid.
As a stopgap measure to begin paying back contractors to close out this project so that the borough can collect the federal funding, the borough has introduced a bond ordinance seeking $1.3 million in financing. This includes $300,000 to begin the payback process for this project.
The borough’s outfall pipeline woes don’t end there. Three months after lead contractor Bird Construction filed a lawsuit against the borough claiming it is still owed at least $345,000 under its original $4.3 million contract, the borough has filed a counterclaim that charges the Bayville-based marine construction company with breach of contract, negligence and deficient work resulting in a malfunctioning “flapper valve system” the regulates the flow of water from Lake Como to the Atlantic Ocean.
Completed in May 2018, the drainage improvement project involved the construction of an underground 700-foot pipeline that now extends from Lake Como to the ocean, designed to protect the flood-prone area of surrounding residential neighborhoods in Belmar, Lake Como and Spring Lake — an area hit hard during Superstorm Sandy in October 2012.
Discussions are currently under way between Bird and borough officials to resolve the valve issue — and an agreement is close, according to Belmar Business Administrator Edward Kirschenbaum.
FEMA Wants $1 Million in Superstorm Sandy Funding Repaid
And as if the Superstorm Sandy saga will never end, Belmar was recently informed by the state that it was overpaid $1 million in Federal Emergency Management Agency (FEMA) funding for rebuilding efforts completed in October 2016 and closed out 12 months later.
While FEMA approved a total project cost of nearly $8.45 million — with a corresponding 90 percent federal cost share of $7.6 million — a total of $8.6 million was actually paid, resulting in the $1 million overpayment to Belmar, according to a letter from Salvatore Marcello in the New Jersey State Police’s Recovery Bureau, Financial Unit.
The proposed $1.3 million bond ordinance, which is expected to be on the borough council’s October 1 agenda for a public hearing and final vote, includes funding to make this payment as well.
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