The New Jersey Turnpike Authority board this month is expected to vote to eliminate employee bonuses and payouts, toll-free work commutes, and other practices that have cost the agency $43 million in nearly four years.

The board’s actions are in response to an audit released Tuesday that showed the agency spent $43 million from 2007 through Sept. 14 on bonuses and payouts, E-ZPass fees for its workers, and faulty legal bills.

The audit by New Jersey Comptroller Matthew Boxer states that the agency overpaid $224,168 to outside legal firms due to inaccurate invoices submitted by law firms. The Turnpike is now re-examining those bills for potential reimbursement.

Agency officials have implemented a new process to review and authorize legal bills and it will release in late 2010 or early 2011 a request for proposals for legal services that incorporates more control over fees.

The $43 million includes $30 million that employees received in bonuses and unused sick time and vacation payouts that are included in contract agreements with various labor unions. All of the authority’s labor contracts will expire in 2011.

Veronique Hakim became the authority’s executive director on Sept. 1 after Diane Gutierrez-Scaccetti left the post on Aug. 31. Gutierrez-Scaccetti was appointed by former Gov. Jon Corzine. The agency oversees the 148-mile New Jersey Turnpike and the 173-mile Garden State Parkway.

The authority’s board will vote at its Oct. 26 meeting on eliminating the bonuses and payouts for all non-union employees and for unionized workers once the labor agreements expire, according to New Jersey Transportation Commissioner James Simpson, who also chairs the Turnpike’s board.

It will also vote to stop providing toll-free passage to and from work for its employees and eliminate an employee relations account that cost the agency $178,000 from 2007 through 2009, including $12,000 for an employee bowling league.  

“We’re taking critical and long overdue steps to end waste at the [authority] and implement real reform in line with Gov. Chris Christie’s efforts to bring accountability and efficiency to state authorities, boards and commissions,” Simpson said in a statement. “We’re driving down costs and maximizing the return on every dollar we spend, and customers who pay our tolls and the investors who buy our bonds should be reassured that we will live up to those promises.”

The authority has about $7 billion of debt. Officials plan to issue up to $2.53 billion of new-money and refunding bonds in mid-November, including $2 billion of taxable Build America Bonds. The agency will sell $538.6 million of refunding bonds at that time, depending upon market conditions. Goldman, Sachs & Co. is book-runner for the new-money and refunding deals. Citi is co-senior manager.

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