News that doesn't receive the necessary attention.

Tuesday, September 16, 2014

EPA rejects most of $511 million loan for new Tappan Zee Bridge requested by NY Gov. Cuomo-NY Times

9/16/14, "E.P.A. Rejects Most of a Loan for the Tappan Zee Bridge Project," NY Times, Joseph Berger

"In a significant blow to Gov. Andrew M. Cuomo’s plan for financing a new Tappan Zee Bridge, the federal Environmental Protection Agency on Tuesday rejected most of New York State’s request for a $511 million low-interest loan to help pay for the project, saying the state had planned to use the money almost entirely for construction, rather than its required purpose: enhancing the environment.

The rebuff means that the state may have to sell more of its own bonds to pay for the replacement of the current Tappan Zee, which could result in even higher tolls for drivers than the Thruway Authority had been contemplating. The decision also offered a caution to other governors who may have considered pursuing federal Clean Water Act money to help cover the cost of infrastructure projects.

The state said it would appeal the decision, even though E.P.A. officials made clear that the agency’s experts had reviewed the ruling.

Speaking to reporters in New Paltz, Mr. Cuomo, a Democrat, contended that the E.P.A. “approved the loan in concept” and said that the financing had never been essential to the bridge’s construction.

“We’d like to get it done, but it was not that the bridge was dependent upon this,” he said.

Nevertheless, the decision is a personal setback for the governor, who has trumpeted the bridge project as evidence of his ability to do things that had flummoxed his predecessors.

The rejection of the loan quickly became an issue in Mr. Cuomo’s re-election campaign, in which he is facing Rob Astorino, the Westchester County executive and a Republican.

In a statement, Mr. Astorino said, “Slowly but surely, all the myths of the Cuomo administration are being exposed to sunlight.” While adding the E.P.A. decision to what he characterized as a litany of other Cuomo failures, such as the termination of the governor’s short-lived anticorruption commission, Mr. Astorino tartly laced his statement with metaphors derived from bridge building.

“Mr. Cuomo’s administration was constructed on the silt of corruption, intimidation and secrecy,” he said. “There is no bedrock beneath it.”

In response, Peter Kauffmann, a New York State Democratic Party spokesman, said: “If it were up to Rob Astorino, the Tappan Zee Bridge toll would be $20 and the bridge would be ready in another two decades or so. Governor Cuomo has made more progress in four years than anyone has in decades, and thanks to his leadership, New York remains on schedule and on budget to build a new bridge at less cost for toll payers with tens of thousands of jobs for the region.”

The rejection by the E.P.A. was a reminder of the ways in which big infrastructure projects — and the challenges of financing them — can create potholes in the path of governors: In New Jersey, the financing of repairs to the Pulaski Skyway by the Port Authority of New York and New Jersey has set off an investigation by the Manhattan district attorney’s office and the Securities and Exchange Commission into possible securities law violations.
Construction of the new, twin-span, 3.1-mile Tappan Zee Bridgecrossing the Hudson between Rockland and Westchester Counties — began last year and is scheduled to be completed by 2018. The state has been seeking inventive forms of financing in a bid to hold down the tolls that will eventually be used to pay off the loans financing the project.

So far, the state has obtained $1.6 billion in federal transportation loans, an approach highlighted by President Obama in May when he used the bridge as a backdrop while urging Republicans in Congress to support his $302 billion, four-year transportation-infrastructure program.

In June, the state asked for an additional $511 million under an E.P.A. program through which the agency provides loans for initiatives created to improve water quality as called for by the Clean Water Act.

In seeking the funds, the state said it intended to use them for a variety of projects aimed at cleaning up the Hudson, including tearing down the existing bridge, dredging the river’s bottom to accommodate large barges and reducing underwater noise during construction to protect sturgeon. 

The state’s Environmental Facilities Corporation approved the loans in late June.

The E.P.A. rejected seven of the state’s 12 proposed projects as falling outside the purposes of the Clean Water Act, under which the money has usually been used for sewage treatment plants and other methods of cleaning polluted waters. The rejected projects totaled $481.8 million, while those accepted totaled $29.1 million.

“The focus of corrective actions and compliance schedules in a conservation and management plan is, therefore, water quality-based and not for the mitigation of impacts directly caused by major construction projects — such as the replacement of the Tappan Zee Bridge — within an estuary,” Joan Leary Matthews, director of the E.P.A.'s clean water division in Region 2, which includes New York, wrote in a letter explaining the decision.

The E.P.A. said that the state’s plans to use Clean Water Act money to restore a marsh on the Rockland County side of the river and for storm water management were acceptable, but that most of its other proposals were not. Among the rejected projects were the demolition of the existing bridge, and the addition of a bicycle and pedestrian path that is to run parallel to the new bridge’s roadway.

In her letter, Ms. Matthews dismissed the state’s arguments that using $65 million for bridge demolition would keep lead-based paint and floatable debris out of the Hudson. She said that repainting over the years had largely obviated the lead paint problem, and that there was no evidence the current bridge was a source of debris. She also said she did not believe that a bicycle path qualified for Clean Water Act financing either, because the loans are intended by law to pay only for recreational projects that bring people directly to the water for, say, canoeing or fishing.

Thomas J. Madison, the executive director of the Thruway Authority, said that the approved amount was a “first installment” on the original $511 million request and that the agency planned to secure another $256 million loan in 2016.

Jon Sorensen, a spokesman for the Environmental Facilities Corporation, said in a statement, “While this loan is not integral to the overall bridge construction, the projects identified here will clearly provide significant benefits for the Hudson River Estuary.” He added that the E.P.A. division was “simply wrong in its assessment.”

The decision was hailed by environmental groups, which had criticized the use of money under the Clean Water Act. Travis Proulx, a spokesman for Environmental Advocates of New York, said, “The Environmental Protection Agency has the responsibility to call balls and strikes when states seek to divert federal funds away from their intended purpose, and that is what happened.”

Paul Gallay, the president of Hudson Riverkeeper, echoed that sentiment, saying that there were great needs throughout the state for water quality projects and that the E.P.A. loans should never have been earmarked for building a bridge.

“The money needs to be put to the purposes Congress intended it for, which is water infrastructure and river restoration,” Mr. Gallay said."


8/23/14, "Tappan Zee tolls: Feds ignore appeal for estimates," Journal News, by Theresa Juva-Brown

"Officials are required to respond within 20 business days. Appeal was filed in June."

"Federal officials continue to remain silent on whether they will release key documents that contain future toll estimates for the Tappan Zee Bridge.

In December, the state Thruway Authority secured a $1.6 billion low-interest loan from the federal government for the $3.9 billion bridge replacement project.

Earlier this year, The Journal News filed a Freedom of Information Act request to obtain the financial section of the state's loan application to the Transportation Infrastructure Finance and Innovation Act program.

U.S. Department of Transportation officials, after consulting with Thruway leaders, denied The Journal News' request in May, arguing that releasing "hypothetical toll revenues and financing scenarios both for the Project and for the entire NYSTA system" could damage the Thruway's credit rating and increase its borrowing costs.

The Journal News filed an appeal in June and officials acknowledged it June 10. A public agency has to answer an appeal within 20 business days, according to law.

As of Friday, it had been 52 business days. Several DOT officials assigned to the case did not respond to emails last week.

The delay has prompted The Journal News to seek help from the Office of Government Information Services, a federal agency that oversees Freedom of Information Act policies and compliance. Nikki Gramian, deputy director of OGIS, said she is looking into the matter.

The Journal News is not the only organization seeking financial details on the Tappan Zee project. Tri-State Transportation Campaign, a mass-transit advocacy group, recently received a single blacked-out page in response to its request for the same documents.

"We've been asking for the financial plan, and we think they should make it public," said Vincent Pellecchia, general counsel for Tri-State. "Not being able to see it is frustrating.""

Image: "
A recent view of the Tappan Zee Bridge and ongoing construction on the replacement span. Photo: Theresa Juva-Brown/The Journal News.


6/26/12, "Faulting a Plan to Replace the Scorned Tappan Zee," NY Times, Peter Applebome

"It was unloved from the start, built on the cheap, located improbably at the broadest stretch of the Hudson River, its improvised design derided by its own engineers as “one of the ugliest bridges in the East.”"...Tappan Zee Bridge map from NY Times. 



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