Gov. Cuomo (photo: Governor's Office on Flickr)
In 2014, Gov. Andrew Cuomo was looking at how to fund the construction of a new Tappan Zee Bridge and in such a way that he could promise minimal toll hikes. Construction had actually already begun on the $4 billion project despite no clear funding plan in place and pressure to detail the spending was mounting.
On June 13, 2014 Cuomo announced that the state Environmental Facilities Corp. would loan the state up to $511 million for the multi-billion dollar project from the Clean Water State Revolving Fund. The fund, which is actually backed by federal dollars, exists to dole out low-interest loans for projects like local sewer repairs and wastewater treatment plant upgrades. The state also has a similar Drinking Water Revolving Fund that gives out loans for water main repairs and upgrades.
The move was met with immediate backlash from environmental groups that insisted the funds were simply not meant for a transportation project and that the move could set a bad precedent - perhaps undermining the very purpose for the federal funding and killing funding for clean-water infrastructure in New York and elsewhere. Budget watchdogs also attacked the plan as a “gimmick” and “irresponsible.” After much hand-wringing, it did not go forward as the Cuomo administration had sought.
As the Cuomo administration struggles to divert blame for the debacle in Hoosick Falls, where the state resisted calls to notify residents of contaminated drinking water, environmentalists and others point to the Tappan Zee loan episode as evidence that the administration has repeatedly not fully recognized major clean water and water infrastructure issues facing the state, instead concentrating on costly transportation economic development projects that benefit developers while localities grapple with the costs and consequences of decaying water infrastructure. On the other hand, for some legislators and advocates say it represents the administration’s ability to recognize a problem and tackle it head on with an efficient solution.
Asked if the administration could do more to help localities struggling to pay for water-related infrastructure repairs, Cuomo told Gotham Gazette: “I think this is a national crisis when it comes to water quality. I think we are just starting to learn about chemicals in the water and just how dangerous they can be. I think as time goes on you are going to see more and more dangerous chemicals being disclosed in the water we’re drinking.”
Cuomo added that he was advocating for the EPA to update its regulations to force all municipalities to conduct water safety testing (there is currently a 10,000 person population threshold). If the federal government fails to act, Cuomo said he would introduced legislation to force localities of any size to do water quality testing and that the administration would pay for the testing of localities that are strapped for cash.
Environmental groups estimated at the time of the Tappan Zee loan controversy that localities across the state were contending with $36 billion in costs related to clean water infrastructure demands over the next 20 years.
“Clean-water funds have never been used for a transportation project before – and we shouldn’t start now,” said Marcia Bystryn, president of The New York League of Conservation voter, in a 2014 statement. “If approved, this would set a very bad precedent, especially considering the huge backlog of wastewater projects across the state. We urge the Environmental Facilities Corporation Board to reject this proposal.”
The federal Environmental Protection Agency (EPA), which provided the state with the billions of dollars for the fund over the last two decades, eventually rejected the proposal. But the state didn’t back down and appealed the decision. In the end a compromise allowed the state to use $1.3 million for oyster bed restoration and the replacement of a falcon box, with none of the money going toward the “New New York Bridge,” the funding of which is still not completely clear.
The ordeal leant new focus to clean water infrastructure demands faced by localities across the state. (As has the recent crisis in Hoosick Falls and questions about water contamination elsewhere in the state.) While Cuomo administration officials noted that millions of dollars were sitting in the revolving fund untouched as proof that they were unneeded, local leaders countered that they simply couldn’t afford to take on anymore debt, regardless of the interest rate, because they would never be able to repay it. Meanwhile, municipalities have grappled with decaying and dilapidated water infrastructure and seen overflowing sewer lines, exploding water mains, and sinkholes.
In 2015 the state Legislature pressed for a new program to help fund water infrastructure projects across the state. Cuomo signed the New York State Water Infrastructure Act to disperse $200 million in grants to localities for water infrastructure repairs and improvements. By December 2015, $75 million in grants had been awarded. This year the state Assembly successfully fought for a $200 million increase to the program.
James Tierney, deputy commissioner for water at the state Department of Environmental Conservation, told Gotham Gazette that the grant program mixes and matches loans from the revolving fund and grants to kickstart projects proposed by municipalities. Tierney said his focus has been on helping “hardship” municipalities in both rural and urban areas. He noted that a lot of communities weren’t in a position to utilize the revolving loan funds. “A lot of communities were making the case after the Great Recession, saying ‘Hey we’ve got nothing here. We can’t afford these loans.’”
Tierney said that the pressure on municipalities and the state to fund water projects has increased as the federal government has altered the strategy behind the Clean Water Act. Early in the 1970s when the program was starting some water infrastructure projects would receive up to 75 percent funding with municipalities covering only 12 percent. “In the olden days it was much more about funding infrastructure and regulations. Then it turned into grants and then loans and then the pot for loans began to sink.” said Tierney.
He noted that the Congressional Budget Office reports that only 4 percent of water infrastructure projects are funded by the federal government.
A number localities, including Syracuse, are focused on advocating for more federal funds. But in the meantime many local officials and state legislators are pleased with the administration’s efforts with the grant program. Advocates have noted a positive trend.
“We have seen a total “180” on water infrastructure funding,” said Liz Moran of Environmental Advocates of New York. Moran said the Tappan Zee raid and the backlash that followed “was a wake up call” for the Cuomo administration about just how necessary water infrastructure funding is.
“After the raid ceased it became clear that the money was needed to go to these problems,” said Moran. “Maybe the governor didn’t know about the need in the first place, but we are very happy he's embraced the programs now.”
The notion that taking on loans from the revolving fund wasn’t the ideal solution to dire infrastructure needs faced by cash-strapped localities across the state wasn’t new in 2014 or 2015.
Syracuse Mayor Stephanie Miner, a Democrat like Cuomo who has clashed with the governor, has been calling for state and federal assistance in dealing with her city’s water infrastructure needs for years. In 2014 Miner called for the state to create “The Syracuse Billion,” a take off of Cuomo’s Buffalo Billion program that invested in major economic development projects. But Miner wasn’t looking for deals to draw high-tech firms to the area. Instead she proposed using $750 million of the cash to replace and repair a 550-mile, 100-year-old water pipeline that is in constant disrepair.
Cuomo responded that Syracuse was going “bankrupt,” adding, "You are unsustainable. You need jobs, an economy, business. Show us how you become economically stronger and create jobs. Then you fix your own pipes." He later added he was saying the city was “metaphorically” bankrupt, according to The Post-Standard.
Miner told Gotham Gazette that she thinks the Tappan Zee Bridge funding battle “brought attention to the fund and the overwhelming need for water infrastructure funding throughout the state. Every municipality has water problems,” Miner said, “from Hoosick Falls to Long Island, Kingston and Buffalo.”
During a 2015 budget hearing Miner pressed the State to use bank settlement funds to help struggling localities across the state. She said municipalities are handicapped by the state’s property tax cap and increasing state mandates, and can’t afford to make major infrastructure repairs without drastic intervention.
Cuomo did not grant Miner’s wish, but the Assembly used discretionary funds to allocate $10 million to repair Syracuse’s water infrastructure through the 2015 budget. Cuomo used settlement funds for transportation projects like the Tappan Zee replacement and for economic development grants.
Assemblymember Steve Otis, a Democrat representing Rye who championed the state’s grant program, is intimately familiar with infrastructure funding challenges faced by localities around the state. Otis served as mayor of Rye for 12 years. “We knew there was a great need. But the loan fund does not receive applications for all the money that is available,” Otis said in an interview. “Why? Because these localities couldn't afford to incur 100 percent debt.”
Otis said the program was so successful and the need so great that the Legislature doubled funding for it in 2016. The first round of the program doled out $75 million in grants; the second $175 million; and the third round will come next year with the distribution of another $175 million.
Otis praised the Cuomo administration for expediting the grants. “These are simple projects that are helping communities maintain water quality and the Cuomo administration has done a fantastic job getting the grants out the door and recognizing the need.”
But Otis, as well as advocates and other government officials and workers charged with dealing with water infrastructure across the state, acknowledge the program can’t help everyone. “One or two municipalities could eat up all the funding in one shot,” Otis said, indicating the scale of the need around the state.
Miner said that in her experience the Environmental Facilities Corporation (EFC) grant programs have been targeted toward smaller communities and that some of them require extensive pre-design work even to apply. Syracuse was, however, awarded $679,444 for a water infrastructure project in August through the New York State Water Infrastructure Improvement Act of 2015.
Asked about the program, Miner initially responded that Syracuse was ineligible because of its large population, though the program does not have a population restriction. Miner later clarified through a spokesperson that she was talking about other grant programs offered by the EFC and that she believes the EFC needs to offer a wide array of water infrastructure grant programs for communities of all sizes.
Officials from the EFC, the agency tasked with overseeing both the revolving loan programs and the water grant initiative, confirmed that there are no population restraints on the grant program.
Joe Coffey, the water commissioner for the city of Albany, is all too familiar with just how costly it is to maintain an aging water system. Albany’s dates to the 19th century. The city’s water treatment plant was built in the 1930s, as was the transfer line. And as Coffey points out, age is the greatest indicator of the possibility of infrastructure failure.
This summer residents have had to contend with a number of water main breaks and sinkholes that have gnarled traffic on busy roads not far from the Capitol building while the city continues to remedy sewer system overflows into the Hudson River, which functions not only as a source of recreation and food for some locals but as a water source for those down river.
”You can't print enough money to replace our water and sewer system,” said Coffey. “You are looking at asset management and the probability of failure--if it fails what's the consequence of failure?”
Albany recently won an $837,500 grant from the State. Coffey said the cash will allow Albany’s water department to leverage other funds for more projects and to expedite urgent repairs.
“It’s a tough call on how to balance investment in aide for water infrastructure,” said Coffey. “But without water you have nothing. In this state we are were blessed with an abundant supply of safe, reliable drinking water and from that we can leverage economic development and all the things that come after that. If you don’t make repairs you don’t have that base and these issues become real quality-of-life problems.”
Miner, the Syracuse mayor, echoes Coffey’s concerns about infrastructure. “I don’t want to undercut the [grant] program, but nobody wants to cut a ribbon underground--but at least people are talking about it now,” said Miner, hitting on one of the key reasons for a lack of focus on essential, basic infrastructure repairs.
Miner estimates the total cost of replacing the city’s most troublesome water lines would be around $730 million. According to the Syracuse Post-Standard the city hit its 102nd water main break of this year in May--a lower total than the 171 water main breaks it had suffered by the same time last year.
Tierney, of the DEC, acknowledged that a number of cities across the state are facing problems so large that they can’t be addressed as a whole. “The first step is recognizing the problem. Some of this infrastructure is very old and they are dealing with combined problems and it is a lot. Our approach has been to phase things in in a reasonable way, to use grant programs and EFC loans and coach communities how to apply for funds.”
Miner said Syracuse is now focusing on utilizing data analysis to predict and pinpoint where fixes should be made to preempt major problems, rather than pushing for a comprehensive replacement project.
She remains concerned that the state’s economic development spending may be undermined if it does not provide more assistance to localities facing dire infrastructure needs. “You can’t build a high-tech center if people can’t make coffee or flush their toilets,” said Miner.