Clean Water fund faces tenuous finances

General Assembly slashes appropriations nearly 90 percent in past two years

bhenderson@charlotteobserver.comDecember 30, 2012 

  • The Trust Fund’s effect near Charlotte The nearly $1 billion in grants North Carolina’s Clean Water Management Trust Fund has awarded since 1996 was combined with $2.5 billion in local money and other grants. In the Catawba River basin including most of Charlotte, $91.5 million in Clean Water grants leveraged projects worth $316 million. In the Yadkin River basin, on the city’s eastern side, $96.1 million in grants went toward projects that cost $218.7 million.

North Carolina’s Clean Water Management Trust Fund, which has spent nearly $1 billion to clean up polluted waters and protect untainted ones, will face a dicey future as legislators convene in January.

The General Assembly slashed the fund’s appropriations nearly 90 percent below their $100 million peak in the past two years as the state grappled with budget problems. More worrisome to supporters is that legislators dropped it from the state’s recurring budget, meaning the fund now has to fight for unspent money.

The program has methodically sprinkled grants across every county, gaining deep support from local governments, conservation groups and outdoorsmen. Those allies are talking up its worth to Gov.-elect Pat McCrory’s transition team and Republican legislators’ new super-majorities.

“If you keep reducing the fund, it ends up losing its presence. This will be the third year we’ve been below $50 million, and it gets to where the work is not there,” said executive director Richard Rogers. “Given all that, we’ve gotten no messages from the governor’s office or others that they want to do away with the program.”

The fund wants $40 million for each of the next two years.

Republican-led legislators repealed a statutory mandate of $100 million in annual appropriations in 2011, but diversions of the fund’s appropriations have been bipartisan. Democratic Gov. Bev Perdue transferred its whole $100 million in 2009 to help fill a budget shortfall.

When legislators created the fund in 1996, hog manure was washing down rivers, coastal fishermen were reporting lesion-riddled fish and development threatened to pollute drinking water supplies.

Since then, it has granted $520 million to buy land and protect waterways, $251 million to fix failing sewage treatment plants and $96 million on restoration projects.

In Mecklenburg County, more than $15 million in grants helped to protect Mountain Island Lake – the main water source for Charlotte and Gastonia – and to restore polluted Little Sugar Creek.

Gaston County projects got another $15 million, many of them aimed at reviving the South Fork of the Catawba River, once known as the “Rainbow River” for the textile dyes dumped into it.

McCrory, the longtime Charlotte mayor, is expected to set the tone for legislators when he produces his first budget. Trust fund boosters have already met with his transition team, which made no commitments.

“Since the fund was made non-recurring, it is absolutely critical that we get support for some level of funding in the governor-elect’s budget,” said Edgar Miller, government relations director for the Conservation Trust for North Carolina, a statewide conservation group.

McCrory and his pick as the state’s environment secretary, John Skvarla, talk of balancing environmental protection with economic development.

“We are in the process of reviewing policies for this as well as for the (environmental) department as a whole,” said spokesman Ricky Diaz.

Rep. Ruth Samuelson, a Charlotte Republican and supporter of the fund, said Clean Water fell victim to tight budgets, not politics.

Removing the fund from the state’s recurring budget wasn’t intended as a message that legislative leaders no longer support it, said Samuelson, who chaired the House Environment Committee in the last session. “I am not hearing anybody who is not in favor of it,” she said.

But a special challenge in 2013, added Rep. Chuck McGrady (R-Henderson), is that more than half the members of the legislature will be in their first or second terms.

“Their awareness of the fund and what it does is not real high yet,” said the former Clean Water trustee. “The challenge is going to be, in tough financial times, to make the case for why money should go to the trust fund.”

Shifting approach

Conservationists view the reduced appropriations as a lost opportunity to buy land at depressed prices. Some legislators have viewed it differently, limiting the use of Clean Water grants for land acquisition in 2011.

The Charlotte-based Catawba Lands Conservancy used $3.8 million in Clean Water grants in the last few years for a 15-county trail network called the Carolina Thread Trail.

Smaller appropriations have “significantly limited the amount of conservation work that can be done, and we’re in window – really a generational opportunity – to preserve a lot of important land just because of the state of the real estate market,” said Tom Okel, the conservancy’s executive director. “We could have done significantly more.”

The state’s two other natural-resources trust funds have also taken budget hits. Legislators diverted $16.4 million from the Natural Heritage and Parks and Recreation funds in 2011, but they restored the flow of money the following year.

Clean Water has laid off nearly half its staff since 2009. This year it approved $11.6 million of the $122 million in grants that were requested.

As Republicans took control in 2011, legislators steered the fund toward protection of military bases and drinking-water sources. The fund now emphasizes its benefits to the military, agriculture, tourism and economic development – such as the craft breweries going up around Asheville.

“We will try to demonstrate to them that what we do is worthwhile,” said trust fund chairman John McMillan, a Raleigh lawyer. “I think we have enough friends up there in both parties who understand that.”

Henderson: 704-358-5051 Twitter: @bhender

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