Contractors who are worried about running out of money and being forced to shut down projects at the height of the construction season because of the state budget impasse are getting a reprieve.
The Association of General Contractors of New York State, an industry trade group, reports that the last two budget extenders approved by the Legislature and Gov. David Paterson included $5 million to reimburse contractors for work performed April 1-18.
Steve Stallmer, contractors’ association public affairs vice president, said his organization first learned of the road and bridge project funding authorization from the Department of Transportation on Friday, after agency officials took a second look at the resolution’s language.
Stallmer said two major local projects — the $42 million I-87 Northway Exit 6 interchange and the $9.4 million Route 9P bridge replacement over Saratoga Lake — were included in the list of projects that will receive the reimbursements.
Stallmer said the association is hopeful the reimbursements will be included in every temporary budget resolution until state lawmakers and Paterson reach final agreement on a budget, but warned that it’s anyone’s guess.
“Our expectation is that it will continue, but this governor is unpredictable,” he said. “Hopefully, the governor and Legislature will see that these projects need to be paid for before they shut down.”
Paterson spokesman Morgan Hook said the governor will continue to appropriate funding for the projects. To prevent a government shutdown, the Legislature must act on another budget resolution on Monday.
Stallmer said Paterson previously refused to include funding for capital projects in the temporary spending bills to apply political pressure to lawmakers, and partly because of the governor’s dispute with public employee unions. Stallmer called it “just another shortsighted move by Gov. Paterson.”
The president of Lancaster Development, the contractor for the Exit 6 project, says without the reimbursements he would likely have to shut down operations sometime after July 4.
Mark Galasso said, “I guarantee you I wouldn’t make it to Labor Day.” He said if the project were halted, the impact would be felt in the local economy. Galasso said he has 30 full-time employees on the project, “and every single one lives in New York state.” He added there are an additional 50 full-time workers on the project when you include subcontractors and suppliers.
Stallmer said projects will continue throughout the summer, as long as the reimbursements are authorized. “If this was just an anomaly and they stop, then the projects will shut down. If they do this with the budget extenders every week, we’ll be fine.”
However, contractors are concerned with a related edict from the administration. The Division of Budget late Thursday banned overtime for most state employees, including those at the Department of Transportation. Only employees involved with the immediate health and safety of New Yorkers are exempted.
Galasso said he wasn’t sure yet what impact it would have on his projects but is concerned it could mean his employees would not be able to work overtime. Under state law, the state can withhold payments for a project if work is performed without DOT inspectors present. The order could effectively force contractors to limit work to eight hours a day.
Galasso said the edict comes at a point in the project when “some workers were doing double shifts. Right now, the weather is on your side, overtime is more efficient and makes more sense because you have more daylight hours.”
Stallmer warned that delays could cost contractors a lot of money in the long run, and become a “commuter’s nightmare.” He said contractors are fined $10,000 a day for each day a project is not completed by its target date.
State DOT Director of Communications Deborah Rausch said any potential effect on contractors could not yet be determined. She said there’s a possibility project inspectors would be exempted from the order.
Stallmer said safety is an ongoing issue. “These projects have lane shifts, lane closures, and sometimes drivers don’t always use caution,” he said.