Freeholders in Morris, Somerset and Sussex counties approved a $21 million bailout in 2015 Watch video
Officials in Morris and Somerset counties say they will not join a possible lawsuit by Sussex County seeking to recoup losses from a tri-county, $88 million solar project that ran into trouble.
While the freeholder boards in all three counties approved a $21 million bailout of the project in 2015, four years after it started, fallout appears limited to Sussex County -- with officials in Morris and Somerset arguing that the controversial venture is starting to pay off.
Overhead view of solar panels at County College of Morris. (File photo)The Sussex freeholder board hired ex-State Comptroller Matthew Boxer's law firm in January 2016 to investigate what went wrong with a project initially touted as a surefire cost savings.
Boxer submitted a 62-page report in August.
He asserted in his presentation to the freeholder board that Sussex -- whose solar project was run by the Morris County Improvement Authority (MCIA) -- was "the victim of negligence, misconduct and various other failings by multiple parties," though he did not single out anyone for blame.
In response, Sussex officials began discussing possible litigation and said they would welcome participation from their fellow freeholders in Morris and Somerset -- though construction in both those counties was further along, minimizing their losses, when work halted in 2013 amid a feud between the developer and contractor.
It appears no such support is forthcoming.
Contacted by NJ Advance Media, Morris County Freeholder Director Douglas Cabana and Somerset County Administrator Michael Amorosa said neither freeholder board is interesting in joining a lawsuit.
While Boxer estimated the eventual cost of the solar project to Sussex at $26 million, Cabana said the venture will end up paying for itself in Morris.
"We are going to be fine," Cabana said, adding, "In the end, Morris County will be whole."
Amorosa was similarly optimistic, stating that the 2015 settlement restarting construction led to the completion of two key solar installations in Somerset.
"Local municipalities and boards of education throughout the county continue to benefit from decreased energy costs, providing local unit budgetary relief which is a direct benefit to the taxpayer," Amorosa said in an email.
Solar project constrction concluded in the three counties in December 2016.
"Neither Somerset County nor the SCIA (Somerset County Improvement Authority) are aware of any information that would lead us to join Sussex County in a legal action against any party," added Amorosa, referring to the entity overseeing the solar project in Somerset.
In response, Sussex County Freeholder Director Jonathan Rose said the county "would certainly welcome" a statement from the full freeholder boards in both counties.
"I am hopeful that Morris and Somerset would meet with Mr. Boxer before taking a position," said Rose, who was elected in the aftermath of the settlement and campaigned against it.
Rose said, while no final decision has been made, that "Sussex County is moving in the direction of litigation."
The origins of the tri-county solar project trace to December 2009, when the MCIA announced plans to install solar panels on the roofs of several county government facilities and 14 public school buildings in Morris County.
Morris County guaranteed the bonds, with no debt service incurred by the school districts.
The following year, Somerset County -- via the SCIA -- launched a similar project involving 15 local entities.
According to Boxer's report, former Morris County Freeholder John Inglesino, whose law firm was the MCIA's legal counsel, pitched the solar project at a Nov. 2010 dinner attended by former Sussex County Freeholder Richard Zeoli, among others.
Zeoli, then the board's director, brought the proposal to then-Sussex Administrator John Eskilson, culminating in a unamious vote by the Sussex board in February 2011 for its partnership with the MCIA.
In December 2011, the SCIA and MCIA issued municipal bonds totaling $88 million to guarantee the project. Sussex County guarantees the bonds, totaling $27.7 million, issued on behalf of its program.
Construction of the solar panels was supposed to wrap up in a year, but then the market price for solar renewable energy certificates -- the linchpin of the purported savings -- fell dramatically.
Cabana, a Morris County freeholder since 1997, said the market "got oversaturated."
In May 2013, the contractor notified the developer that it was halting construction in all three counties, and each filed arbitration actions against the other.
In 2014, an arbitration panel sided with the contractor and ordered the developer to pay about $60 million in damages, prompting settlement discussions.
Cabana said the three counties were "caught between two warring parties."
In Feb. 2015, the Sussex County freeholder board voted 3-2 to approve its share of the three-county, $21 million settlement.
According to Boxer's report, then-Sussex Chief Finance Officer Bernard Re said the deal was nearly derailed after the MCIA insisted on including a release of claims, under which Sussex County agrees not to sue the agency or Morris County, or any of the county's attorneys, financial advisors and consultants.
Asked about Boxer's findings, Cabana said, "I didn't read the report."
"Quite frankly, I have enough stuff to deal with in my own county," he said.
Rob Jennings may be reached at rjennings@njadvancemedia.com. Follow him on Twitter @RobJenningsNJ. Find NJ.com on Facebook