Oversight office faults New York board's quick approval of loan for Tappan Zee Bridge

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ALBANY, New York — A New York oversight office on Thursday criticized the way a state board approved loans for a new Tappan Zee Bridge, concluding members ignored federal concerns that led the U.S. Environmental Protection Agency to reject most of the $511 million sought.

The Environmental Facilities Corp.'s directors authorized low-interest federal clean-water funding for Gov. Andrew Cuomo's signature public works project in June.

The board had been directly notified by the EPA a day earlier about concerns and should have waited until federal questions were resolved, the state Authorities Budget Office said in its Thursday report. EPA Regional Administrator Judith Enck specified federal officials hadn't approved New York's "unconventional" approach and questioned how the construction project would improve water quality.

The Cuomo administration proposed using that money to mitigate damage to the lower Hudson River and its wildlife from building two new bridges and later demolishing the old one.

Environmental groups opposed the bridge loans, saying the EFC's revolving fund is meant for sewer upgrades and clean water projects. They filed a complaint about the EFC board's actions, requesting the oversight review.

The report noted that EFC directors were initially briefed about the proposal behind closed doors last year, that their "lack of transparency" contributed to the complaint and that they didn't open the process for public comment.

EFC spokesman Jon Sorensen said the oversight report correctly determined that the board upheld its fiduciary responsibility and protected the revolving fund's assets but contained inaccuracies and omissions. He said staff made a detailed public presentation before the board vote and the board actually approved only half the loan amount.

The board in July formally authorized a $256 million, five-year, no-interest loan, postponing a vote on a second $256 million loan at 4 percent interest.

Cuomo is appealing the EPA's approval of only $29 million in Tappan Zee borrowing from the environmental fund. He said the $3.9 billion bridge replacement is continuing with or without those loans. Its funding already includes a $1.6 billion low-interest federal loan.

Peter Iwanowicz, executive director of Environmental Advocates, said communities across the state are struggling to fund crumbling sewage and drinking water systems while the Cuomo administration worked secretly for a year trying to divert $500 million of that money to help fund a new bridge.

Joe Martens, the state's conservation commissioner, said Thursday that based on the EFC staff's legal and program analysis, he's confident the loans are eligible and appropriate.

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