WolfeNotes.com

The Bergen Record reported Sunday that the Legislature – despite rubber stamping proposed legislation to renew the ability of the NJ Environmental Infrastructure Trust to issue another $500 million in bonds – is diligently working on reforms to prevent a recurence of that debacle See: State taking steps to prevent another EnCap http://www.northjersey.com/environment/State_taking_steps_to_prevent_another_EnCap.html?c=y&page=2.
That story responds to our criticism – see: $500 Million Clean Water Fund subsidizes new development – ENCAP DEBACLE LOOMS OVER LATEST NEW JERSEY WATER FUND PLAN — Impending Legislative Approval Fails to Address Root Causes of Smoldering Scandal
NJ has a $16 Billion Unmet Clean Water Infrastructure Need – So Why are Clean Water loans subsidizing new development? http://www.nj.com/njvoices/index.ssf/2008/06/500_million_clean_water_fund_s.html
Yet, in addition to blindly rubber stamping reathorization of funding authority, the proposed reform legislation does not even address the causes of the Encap debacle. According to excellent reporting by the Record:
“But other key safeguards, including one to protect taxpayers from eating bad loans to developers, remain on the drawing board….. Hart acknowledged, though, that state officials are still working on plans to tighten up credit and collateral standards for borrowers like EnCap. New procedures for releasing loan money and checking up on projects in progress are also being drawn up, he said.”
We have made very specific reform recommendations that have been completely ignored.
Trenton is not serious about reforms –
Not another penny should be appropriated to the NJEIT and DEP until reforms are put in place that prevent new Encaps – the legislature can start with prohibiting the use of clean water money to subsidize new development and provide private benefits of public funds.

We recently established awards for comparing profiles in courage in environmental protection with lapses of cowardice (see: Testicular fortitude versus gonadal atrophy http://blog.nj.com/njv_bill_wolfe/
In a similar vein, today, we expand that approach to the quality of our environmental journalism – we will compare real investigative work with stenography.
Welcome to the first edition of the “Edward R. Murrow/George Orwell” versus the “Heck of a Job Brownie lapdgo stenographer”.
Murrow/Orwell
The first Murrow/Orwell goes to Jeff Pillets of the Bergen Record. Jeff was recognized as a finalist for this year’s Pulitzer Prize for his reporting on the Encap fiasco. In typical Pillets fashion, more recently, he wrote a scathing expose Safety testing lax on new school sites http://www.northjersey.com/education/educationnews/Clifton_school_site_lacks_test_for_pesticides.html
Heck of a job Brownie/Lapdog stenographer
The lapdog stenographer award goes to Tom Hester, of the Star Ledger for today’s story Bond re-fi cuts cost of water, sewage projects http://www.nj.com/news/ledger/jersey/index.ssf?/base/news-10/121333172350790.xml&coll=1
Since its not obvious, we have to provide a little background on this story, which is nothing more than stenography of a press release by the NJ Environmental Infrastructure Trust. (NJEIT)
Legislation is pending to reauthorize this year’s $400-$500 million NJEIT project funding cycle. The Trust ran into some turbulence during Monday’s Senate hearing, when certain inconvenient truths were told about the NJEIT and DEP failures at Encap – where DEP made a $212 million inadequately secured loan and taxpayers have lost at least $60 million due to bankruptcy filing.
You see, those failure have yet to be fixed and the Legislature is set to rubber stamp a new rtound of Trust funding that replicates the Encap problems (see: ENCAP DEBACLE LOOMS OVER LATEST NEW JERSEY WATER FUND PLAN — Impending Legislative Approval Fails to Address Root Causes of Smoldering Scandal http://www.peer.org/news/news_id.php?row_id=1060
So obviously, to keep that story from emerging and divert attention, the spinmeisters at the NJ Environmental Infrastructure Trust and the Department of Environmental Protection ginned up some good news.
Tom swallowed the government propaganda hook line and sinker. His story provides no context whatsoever (curious given the pending legislation) or sources with a competing perspective – just NJEIT spin –
Just when they needed it – Heck of a job Tom!

ENCAP DEBACLE LOOMS OVER LATEST NEW JERSEY WATER FUND PLAN — Impending Legislative Approval Fails to Address Root Causes of Smoldering Scandal
NJ has a $16 Billion Unmet Clean Water Infrastructure Need – So Why are Clean Water loans subsidizing new development?
Trenton — Yesterday, a key committee of the New Jersey legislature approved financing for a new round of water projects, but this year’s $500 million spending plan does not remedy the flaws that led to the Encap fiasco, according to testimony delivered by Public Employees for Environmental Responsibility (PEER).
At a meeting yesterday, the Senate Environment Committee signed off on a four bill package which implements the Infrastructure Trust financing program, clearing the way for a half-billion dollars of new state clean water loans to be issued this fall. This endorsement for extending unchanged current policies occurs just months after an Inspector General’s report laid out causative factors behind the Encap scandal in which the state Department of Environmental Protection provided a $212 million, largely unsecured loan to a project that went belly-up, leaving taxpayers to pay a multi-million tab.
Despite the bath taxpayers took when Encap declared bankruptcy, the Corzine administration is actually increasing reliance on the very techniques that led to the fiscal follies of Encap. For example, it has adopted rules allowing clean water funds to be used for “conduit financings,” “transit villages,” and “transfer of development rights” projects and other high-finance, high-risk projects. Here’s the DEP’s list of “non-traditional” eligible project categories that receive priority points:
Smart growth projects
Transfer of Development Rights (TDR) Receiving Areas
NJDOT Designated Transit Villages –
State Plan Urban Centers and Urban Complexes
Designated Brownfields Development Areas –
Conduit Borrowers (like ENCAP)
Sustainable Community Planning
$25 million Set aside Landfill Closures and Site Remediation
In testimony before the committee today, New Jersey PEER Director Bill Wolfe argued that fundamental features enabling Encap remain. Under the new plan –
1) Clean water funds could be used to subsidize private “brownfields” projects (for example, multi-million dollar loans to big corporations, such as Hartz Mountain ($31 million) and Michelin Tire ($6.6 million) are on the funding list). In addition, tax-secured loans could still go to new development including projects only tangentially related to clean water purposes – as opposed to upgrading existing deficient infrastructure, despite state Department of Environmental Protection (DEP) estimates of a $16 billion infrastructure backlog;
2) The proposed Trust renewal legislation fails to remedy insider and lobbyist abuses identified by the Inspector General as facilitating the Encap debacle; and
3) The legislation does not address the lax financial oversight of loans found by the Inspector General, such as DEP waiver of loan collateral and security and approval of payments for ineligible uses. Without remedying weak DEP financial controls and insufficient staff to oversee loans, the Legislature leaves the program vulnerable to more financial manipulation and abuse.
“We need to close the cookie jar by prohibiting private use or benefit from Infrastructure Trust loans,” Wolfe commented, “We need to focus state support on priority clean water projects instead of no-collateral development schemes sponsored by Governor Corzine.”

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Look at development projects subsidized
Download file
Read the 2007 PEER letter to EPA asking for oversight
http://www.peer.org/docs/nj/07_30_1_epa_oversight_req.pdf
See the 2008 U.S. EPA disclaimer
http://www.state.nj.us/dep/dwq/pdf/cwf_epa_disclaimer.pdf
Look at the Inspector General report
http://www.state.nj.us/oig/pdf/Meadowlands%20Remediation%20and%20Redevelopment%20Project.pdf
http://www.state.nj.us/dep/dwq/pdf/cwf_2008prop_toc.pdfView the Wastewater Infrastructure Trust Intended Use Plan
Examine diversion of water infrastructure funds to development schemes
http://www.peer.org/news/news_id.php?row_id=813
Review $16 billion backlog of water infrastructure needs
http://www.peer.org/news/news_id.php?row_id=813
New Jersey PEER is a state chapter of a national alliance of state and federal agency resource professionals working to ensure environmental ethics and government accountability

Why is Legislature extending a loan program under investigation?

Bill Wolfe

According to Inspector General Cooper’s February 28, 2008 Report to Governor Corzine on the Encap project boondoggle:
“ENCAP OBTAINS $212M IN PUBLIC FINANCIAL ASSISTANCE FROM EIT/DEP
…. Counsel for EnCap approached the Executive Director of the Environmental Infrastructure Trust (EIT) and various State officials including the Treasurer to propose that EIT and DEP examine the eligibility criteria for their programs in order to issue loans to EnCap…….Documents obtained by OIG indicate that EnCap representatives continued in their efforts to obtain the low interest EIT and DEP funding for the Project despite the fact that a decision had not been made concerning EnCap’s eligibility for EIT and DEP loans……Furthermore, in October 2003, Wisler sent DEP Commissioner Campbell an analysis of the law promoting EnCap’s eligibility for EIT and DEP funding. Acknowledging that the EIT and DEP have traditionally issued clean water loans to public entities, …Wisler argued that the then current law allowed for the issuance of loans to EnCap” (starts on page 111 of a must read report: http://www.state.nj.us/oig/pdf/Meadowlands%20Remediation%20and%20Redevelopment%20Project.pdf
Thus began another tawdry chapter in this saga of corruption and insider special interest deals. You really must read this Report to get a glimpse of how the dirty deals are done in Trenton. I won’t go into all the ugly details here – but, take my word for it, they are ugly – or better yet, read the report yourself.
Well anyway, getting back to the water off the duck’s back, my purpose for writing this post.
IG Cooper found all kinds of major problems, from outright fraud and corruption, to mismanagement, incompetence and bad policy in the DEP and Environmental Infrastructure Trust loan programs. To begin to root some of this out, the Senate held what I assumed to be the first of several legislative oversight hearings last month, calling IG Cooper to testify and present her Report. There were calls for a criminal investigation.
So, needless to say, I was rather surprised to see a package of bills to extend and make appropriations to the EIT loan program suddenly appear on yesterday’s Senate Environment Committee’s agenda (see S1823 et al http://www.njleg.state.nj.us/BillsForAgendaView.asp
Surprise turned to shock after I read the bills – they make no change whatsoever to the EIT/ or DEP programs, other than to extend the 2007 expiration date of the Trust’s authority to issue bonds. Nothing. Nada. Zip.
Shock turned to disgust when I appeared as the sole witness to testify before the Committee and realized that the gameplan was to basically ram the extension and appropriations bills through with absolutely no effort to even think about fixing the problems Cooper documented. (testimony here: Download file
Why on earth should one more dime be provided to this program until the Encap related problems are fixed?
Why is there no outrage that the Corzine administration is expanding the use of the flawed policies that led to Encap, specifically allowing private uses of public funds dedicated to clean water, for all sorts of taxpayer subsidies for new development schemes?
Corzine’s DEP adopted new regulations that not only do not restrict the uses of these clean water funds to public entities for strictly clean water purposes, they expand the use of these funds to subsidize private development schemes via “conduit financings”, “transit villages” and “transfer of development rights” projects” (see: NEW JERSEY FLOATS DEVELOPMENT SCHEMES ON CLEAN WATER FUNDS — Golf Courses, Transit Villages and Transferable Building Rights Are Eligible Projects http://www.peer.org/news/news_id.php?row_id=813
DEP has identified a $16 BILLION unmet need for investment in clean water infrastructure – see: HUGE NEW JERSEY WATER INFRASTRUCTURE NEEDS NOT BEING MET — State’s Economic Future Threatened by Not Investing in Environmental Quality http://www.peer.org/news/news_id.php?row_id=764
Not one dime of clean water money should go to subsidize new development schemes. Period.
And the EIT and DEP programs should not be reauthorized, extended or receive any new appropraitions until the law is amended to prohibit the use of clean water funds for private development schemes, as was done in Encap.

Bill WolfeDEP Hearing Officer Jeff Reading summarizes clean water proposal

The Department of Environmental Protection (DEP) held a public hearing today on a proposal designed to protect NJ’s rivers, streams, bays and oceans from pollution discharged by hundreds of industrial and sewage treatment plants. DEP administers a permit program under the federal Clean Water Act to “restore, maintain, and enhance” water quality and ensure that NJ’s waters are “fishable and swimmable”.

Bill Wolfe14 DEP staffers observe public hearing – one person showed up to testify

While NJ has made great progress since the days when rivers caught fire and raw sewage was discharged, the fundamental goals of the Clean Water Act remain unmet in almost 70% of NJ waterways. As a result of excessive levels of pollution, it is unsafe to fish or swim in most waters in NJ, and drinking water supplies are increasingly threatened. (see:NEW JERSEY ADMITS 970 RIVERS AND LAKES POLLUTED — State Tries to Bury Report http://www.peer.org/news/news_id.php?row_id=684
New scientific evidence suggests that unregulated chemicals – like prescription drugs and endocrine disruptors – and under-regulated pollution sources continue to threaten water supplies and ecosystems. Due to an aging wastewater infrastructure, DEP has estimated that over $16 BILLION in new pollution controls is required to meet Clean Water Act standards. (See: HUGE NEW JERSEY WATER INFRASTRUCTURE NEEDS NOT BEING MET — State’s Economic Future Threatened by Not Investing in Environmental Quality http://www.peer.org/news/news_id.php?row_id=764
Thus, the need to do more and to tighten regulations to protect water quality grows stronger.

But despite this growing need and extremely high levels of public concern with water quality in NJ, no one showed up to testify.

Bill Wolfesewage treatment process at Middlesex County Utilities Authority plant.

Historically, the Clean Water Act permit program regulations have been a high priority of NJ’s environmental community. Environmental groups have sued DEP, harshly criticized DEP for lax oversight, and called for far tougher regulations. Just weeks ago, environmental groups expressed concerns about the proposal, particularly a controversial program to promote reuse of industrial wastewater and sewage treatment plant effluent – See Environmentalists cool to state’s new initiative http://www.northjersey.com/environment/Recycling_wastewater.html

Bill WolfeRaritan River, near MCUA discharge pipe.
The Raritan River and Bay receive millions of gallons per day of wastewater discharges from industrial and sewage treatment plants.

Full disclosure: I was the only one who showed up to testify.

Bill Wolfe

For the folks out there who care about clean water, I urge you to get involved. Here is a link to the proposal and additional information – (see: FEDS SAY NEW JERSEY WATER STANDARDS DO NOT PROTECT WILDLIFE — Bald Eagles, Falcons, Mussels and Others at Risk from Mercury, DDT and PCBs http://www.peer.org/news/news_id.php?row_id=927
The final hearing is May 8 in Bordentown.
http://www.nj.gov/dep/rules/proposals/031708b.pdf
NJ DEPARTMENT of ENVIRONMENTAL PROTECTION
Environmental Regulation
Division of Water Quality
Notice of Rule Proposal
New Jersey Pollutant Discharge Elimination System – N.J.A.C. 7:14A
Public Notice
Take notice that the NJ Department of Environmental Protection (Department) is proposing to readopt with amendments the New Jersey Pollutant Discharge Elimination System (NJPDES) rules at N.J.A.C. 7:14A. The Department also proposes related amendments to the Standards for Individual Subsurface Sewage Disposal Systems rules, N.J.A.C. 7:9A, the Water Pollution Control Act rules, N.J.A.C. 7:14, the Ninety-Day Construction Permit rules, N.J.A.C. 7:1C, and the Department Organization rules at N.J.A.C. 7:1. The most extensive amendments to the rules pertain to reclaimed water for beneficial reuse (RWBR); the method for calculating the fee for dischargers to ground water; the fee for authorizations under the stormwater construction general permit; residuals management; the effluent standard for acute whole effluent toxicity; and the industrial pretreatment program.
Public hearings concerning the proposal are scheduled as follows:

Bill WolfeMiddlesex County Utilities Authority regional sewage treatment plant.

Monday, April 21, 2008 at 10:00am to 1:00pm or the close of testimony
Rutgers Labor Education Center
50 Labor Center Way
New Brunswick, NJ 08903

Bill WolfeMCUA regional treatment plant undergoing upgrades.

Thursday, May 8, 2008 at 1:00pm to 4:00pm and 5:30pm to 7:30 pm or the close of testimony
Rutgers EcoComplex
Environmental Research and Extension Center
1200 Florence-Columbus Rd.
Bordentown, NJ 08505
Written comments may be submitted until May 16, 2008 to:
New Jersey Department of Environmental Protection
Alice A. Previte, Esq.
ATTN: DEP Docket No. 01-08-01/555
Office of Legal Affairs
PO Box 402
401 East State Street – 4th Floor
Trenton, New Jersey 08625