U.S. Senators Frank Lautenberg and Bob Menendez Thursday continued to try to find common ground between the state and federal transportation officials over repayment of some $271 million expended on the now scuttled ARC tunnel.

Despite their opposition to the cancellation of the project, the two senators sent a letter to Transportation Secretary Ray LaHood asking the secretary to work with Gov. Chris Christie on a compromise over repayment of the money, which was demanded by the federal government after Christie halted construction on the tunnel, called ARC for Access to the Region's Core.

“We are writing to urge you to quickly come to a fair resolution over the disputed $271 million following the cancellation of the ARC Tunnel project.  Each day that passes costs the taxpayers of New Jersey more in interest, lobbying fees, and attorneys’ fees, and – if this dispute is not resolved very soon – the taxpayers will be faced with millions of dollars in penalties,” the letter said.

“As Senators who fought vigorously for the $3 billion in funding for this project, we remain disappointed that the state did not fulfill its commitments to complete a critical project to advance our region.  The ARC Tunnel would have created 6,000 annual construction jobs and 44,000 permanent jobs, eased traffic congestion, lowered pollution levels, and fortified the economic future of the region. Despite our opposition to the cancellation of the project, we believe it is important not to punish the taxpayers of New Jersey and burden them with additional, unnecessary costs.”

Christie has refused to repay the funds despite LaHood’s demands, and said in April if the feds want it back, they can come and get it.  In a letter to the administration, LaHood all but threatened to do just that, saying the money could be taken out of the state’s federal aid.

As part of their efforts to broker a compromise, Lautenberg and Menendez had convinced LaHood to allow half of the money to be used on other mass transit and emission reduction projects, but the state has balked.

As the fight plays out, the state has spent well over $1 million in legal costs as well as nearly $500,000 in interest on the $271 million.  Interest continues to accrue at a rate of about $225,000 per month. Christie has been unapologetic and has claimed the state is being held to a different standard than other states that backed out of federally funded construction projects.