WASHINGTON, D.C. – March 24, 2015 – (RealEstateRama) — The Morris County Freeholders, by a majority vote, and the Morris County Improvement Authority have agreed to a $7 million settlement of litigation connected to its Solar II renewable energy program.
Also, at the request of a freeholder majority, the county has formally asked the State Comptroller’s Office to perform an independent review of the county’s solar program, and to advise the county of procedures, safeguards and revisions it recommends to the current solar program and future procurements by the county. The freeholders also are considering other possible avenues for an independent review.
The settlement effectively removes Morris from a lengthy legal battle between the solar project’s developer, SunLight, and its contractor, Power Partners MasTec.
Morris County will use its budget surplus to finance the settlement and will not issue additional bonds or increase taxes to raise the money.
Similar agreements were approved by Somerset and Sussex counties, which along with Morris, started solar programs in 2011. In a joint venture response in a competitive procurement process, SunLight became the developer for all three counties, with Power Partners MasTec as general contractor.
However, SunLight General and MasTec became involved in legal disputes which wound up in state and federal courts. The disputes centered on who was responsible for extensive delays and cost overruns in the Morris II project, and led to solar projects not being completed on time.
Because Morris and the other two counties guaranteed the bonds issued to construct the solar project sites, they were included in the litigation as guarantors.
An arbitration panel found Morris County received $6.3 million in lease payments from Sunlight which should have been paid to the contractor, Power Partners. The county used the $6.3 million to cover debt service on project bonds. The settlement includes a $6.3 million repayment to the contractor, plus $1 million to settle the case.
Morris County in 2011 sold $33.1 million in county-guaranteed bonds to help finance the Morris II solar project to install solar panels at 30 municipal and school sites in Morris County to generate power and reduce energy costs for the participants. Of those projects, 17 have been fully built and are up and running.
This settlement will leave Morris County with funds to complete all or a portion of the unbuilt sites, if it chooses to do so, pending the State Comptrollers review. The county and the MCIA will make all decisions regarding the unbuilt sites, including whether or not they are built, and if they are, who builds them and how the sites may be value engineered for construction savings, plus additional municipal and school energy savings.
To view a copy of the pertinent freeholder resolutions, please visit: