With contractors on public projects unpaid this month and workers stopped from returning to much-needed jobs in a new construction season, construction industry groups have gone to court to force state officials to end a freeze on payments for road and bridge projects until a new state budget is adopted.
Gov. David Paterson on March 30 announced the suspension of payments to contractors except for projects funded by federal stimulus dollars. Among other projects in this region, the $150 million reconstruction project on Interstate 287 in Westchester is affected by the halt in payments.
In early April, Paterson urged construction crews to continue on their jobs during the budget impasse in Albany. The state Legislature”™s emergency spending measures to extend funding for some programs after April 1 have not included contractors”™ pay. Assembly Republicans were defeated in their bid to add construction payments to a recent budget extender submitted by Paterson.
“This is unprecedented,” Ross J. Pepe, president of the Construction Industry Council of Westchester and Hudson Valley Inc. in Tarrytown, said of the state pay freeze. Pepe is spokesman for a coalition of plaintiffs that also includes the Long Island Contractors”™ Association, the General Contractors Association of New York Inc. and Associated General Contractors of New York State L.L.C.
The lawsuit, filed in state Supreme Court in Albany by the coalition”™s attorney, Alfred DelBello, of DelBello Donnellan Weingarten Wise & Wiederkehr in White Plains, names state Department of Transportation acting Commissioner Stanley Gee and Ronald Epstein, DOT”™s chief financial officer, as defendants. It seeks a judge”™s ruling that contractors can continue on projects and be paid as usual in the absence of a stop-work order from DOT officials.
Without a stop-work order, unpaid contractors who stop work on their projects could be penalized or held in default of their contracts by the state.
“Contractors can”™t just stop a job,” said Pepe, whose organization represents 500 firms and affiliates in the heavy construction industry in the seven-county Hudson Valley region. “The contractors are almost forced to work as long as they can hold on.”
Pepe said the state freeze could lead to project slowdowns, delayed deliveries of materials and claims against the state by contractors. “At the end of the day, the taxpayer”™s going to pay for it,” he said.
In Rockland County, the pay freeze applies to the $26 million project on Route 9W at Haverstraw being done by Ecco III Enterprises Inc. in Yonkers, Pepe said. Ecco is low bidder at $51 million on the next phase of the I-287 reconstruction in Westchester. Ecco also was the recent low bidder at approximately $147 million for a road improvement project at the Kew Gardens Interchange in Queens. Those are among 36 to 38 new projects on which low bidders are not being awarded during the pay freeze, Pepe said.
Raymond Gizzi, president of Ecco III Enterprises, did not return calls for comment.
Yonkers Contracting Co. Inc. is general contractor on the continuing I-287 project in White Plains. John Kolaya, the company”™s executive vice president, said the freeze as yet has had no impact on payments due the company. “Come May, we”™re going to be looking for payments,” he said, “and we”™re being told that there are no expectations that payments will be made.”
On some state projects, “Some contractors have slowed down or maybe even stopped, but we haven”™t done that,” Kolaya said.
A union official in Westchester said a New Jersey-based contractor, The Conti Group, has stopped work on a bridge construction project in Chappaqua.
Edward Doyle, president of the Westchester Building Trades Council in Elmsford, said the state building trades council wanted to join the coalition”™s lawsuit but could not because it was not a contractor with the state. “This guy”™s nuts, this governor,” he said. “With the economy the way it is now, the last thing you want to do is stop jobs, especially in construction,” which has the highest unemployment rate of any job sector in the state. “It”™s crazy what”™s going on.”
For contractors still waiting to be paid, “I”™ve got a feeling some of them are going to shut down at the end of May,” Doyle said.
In Albany, “There”™s no sign yet that any resolution is going to be reached,” Pepe said. “The expectation is that it will continue with no end in sight.”
