Atlantic City could receive $20 million in federal funding to fix infrastructure damaged by Superstorm Sandy under a proposal pitched by New Jersey Gov. Phil Murphy’s administration.
The New Jersey Department of Community Affairs, which is overseeing a state takeover of Atlantic City finances, proposed last month transferring $20 million of Community Development Block Grant Disaster Recovery funds toward repairing and replacing city facilities afflicted by the 2012 hurricane. Projects
“Though we have made great strides in recovering from Superstorm Sandy, there is still much to be done when it comes to rebuilding Atlantic City’s infrastructure,” Murphy said in a statement. “As climate change turns previously once-in-a-lifetime catastrophes like Superstorm Sandy into more frequent occurrences, it is clear that we cannot wait to respond to these disasters after the fact, and that our efforts must continue.”
Damages caused by Sandy added to Atlantic City’s financial struggles following the 2008 Great Recession which led to a near default in 2016 that prompted state intervention. Atlantic City has achieved fiscal progress under state control with multiple bond rating upgrades, but the city’s debt is still in junk territory.
“The proposed $20 million transfer would be a credit positive for Atlantic City,” Moody’s analyst Doug Goldmacher said in a statement. “While the city’s still strained finances have improved, any assistance is helpful, particularly given the city’s high degree of exposure to sea level rise and flooding. Money spent on storm recovery and resiliency projects would be particularly useful.”
Moody’s rates Atlantic City’s general obligation debt B2 with a positive outlook, four notches above what it rated the city three years ago.
The DCA is accepting public comments on the proposed funding transfer through Dec. 18. The Murphy administration said the program would be a joint effort between the state and the city with the DCA working closely on the initiative to ensure projects are completed by the end of 2022. It would not impact any existing federal disaster funding.
“By allocating $20 million in Sandy recovery funds for these projects, we are protecting a more than $100 million investment we’ve already made in Atlantic City in restoring homes and rebuilding small businesses damaged by Superstorm Sandy,” said Lt. Governor Sheila Oliver, who is DCA commissioner. “Also, in the longer-term, these projects will help guard against repetitive flooding and fortify Atlantic City to attract future investment.”
