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Thursday, May 31, 2018

Causer Calls for Audit of PENNVEST Transactions

HARRISBURG – Rep. Martin Causer (R-Turtlepoint) has introduced a resolution calling on Auditor General Eugene DePasquale to conduct a thorough audit of more than 100 nonpoint source management transactions approved by the Pennsylvania Infrastructure Investment Authority (PENNVEST).

The resolution comes in response to concerns raised about PENNVEST approval of two low-interest loans totaling nearly $51 million for New Hampshire-based Lyme Timber Company to purchase more than 60,000 acres of private forest land in Cameron, Clinton, Elk, Jefferson, McKean and Potter counties.

“There is a great deal of concern about whether this type of transaction is appropriate and if it is permissible under current law,” Causer said. “When most of us think of PENNVEST, we think of an agency that provides funding to help boroughs, townships and municipal authorities update the water and sewer infrastructure our citizens rely upon. Using agency funds as a means to help finance the private purchase of private land has raised a lot of questions among lawmakers and citizens alike.”

House Resolution 948 would request the auditor general conduct a financial audit of all nonpoint source program projects approved by the PENNVEST board of directors and submit a report of the audit to the House of Representatives upon completion.

Causer noted state law does authorize PENNVEST to use funding from the Clean Water State Revolving Loan Fund Program for nonpoint source projects, as long as the use of funding conforms with federal law and additional state-established parameters. And, as defined by PENNVEST law, projects may include best management practices (BMPs) identified in Pennsylvania’s Nonpoint Source Management Program Update, as long as those BMPs are part of a facility or system. PENNVEST staff have stated that Lyme Timber will use BMPs in their timber operations on the land.

“Different interpretations of PENNVEST law have resulted in a lot of questions about these particular transactions, which appear to be the first of their kind for the agency,” Causer said. “I believe an audit of all nonpoint source projects approved by PENNVEST will give us some additional insight into what is appropriate under the law.”

The Lyme Timber transactions were approved by PENNVEST at meetings last fall and in January, with the funding being loaned at an interest rate of just 1 percent. As part of the transactions, Lyme Timber will complete a small acid mine drainage project on the property at a cost of about $700,000. The company also agreed to place approximately 9,000 acres of the land into a permanent working forest conservation easement.

As chairman of the House Agriculture and Rural Affairs Committee, Causer called a public meeting at the state Capitol in March to gather more information about the transactions from officials with the Department of Conservation and Natural Resources (DCNR) and PENNVEST, as well as concerned land owners and timber operators.

According to Causer, the meeting led to more questions than answers.

“Using state funds to subsidize the purchase of private land by a private timber company, which will now be competing with other timber companies that have not had the benefit of state funding to expand their operations is a serious concern for me and many fellow lawmakers,” Causer said. “I also question PENNVEST’s use of funds in this manner when the agency’s mission is to invest in our infrastructure and there is certainly no shortage of water and sewer systems across this Commonwealth that are crumbling.”

The resolution has been referred to the House Agriculture and Rural Affairs Committee for consideration.

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