NAUGATUCK — After months of fighting, the borough and the state Department of Transportation have reached a settlement in a dispute over grant money.
More than a decade ago the state received about a $450,000 grant to offset the cost of renovating the former Naugatuck train station on Water Street for the Naugatuck Historical Society museum, according to Mayor N. Warren “Pete” Hess.
The historical society called the train station home until 2015 when the borough sold the building, which has since been turned into a restaurant.
The federal government conducted an audit in 2017 that found the state Department of Transportation was supposed to pay back $200,000 of that grant, and it never did, Hess said. The federal government sent the DOT a bill, which the state passed along to Naugatuck last summer, he said.
Hess said the borough refused to pay since there was no documentation supporting that the borough, rather than the state, needed to pay back the money.
“The state attempted to pass that cost off to the borough of Naugatuck, and we resisted it,” Hess said.
Shortly after the borough refused to pay, Hess said, the DOT started taking money out of a $520,000 grant Naugatuck received in 2013 for the reconstruction of Cross Street, according to Hess.
“Even though we denied we owed the money, they nevertheless took the money,” Hess said.
When reached for comment, after press time for the Feb. 23 edition, DOT spokesman Kevin Nursick said he didn’t have information on the matter to comment but would look into it. As of this post, Nursick had not responded back to the Citizen’s News.
Hess said the borough planned to sue the state to recuperate the money but reached a settlement with the DOT at the end of January to split the cost, with each side paying $100,000.
“It was a very tough call. I think we have a good defense. However, we weren’t in a situation where we were defending a claim from them. We were in a situation where they took our money and we had to get permission from the state, and then sue them and get the money back. It seemed that would be a long, costly procedure,” Hess said.
The money for the settlement payment will come from a surplus the borough is expecting in this year’s budget, Hess said.
Hess said the borough still doesn’t believe it owes the money but felt the settlement was the best deal it could reach.
“It doesn’t mean we think we were wrong. We still think we were right. There was a legitimate dispute and we decided to settle it,” Hess said.
