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Published: Dec 12, 2006 12:00 AM
Modified: Dec 12, 2006 05:21 AM
 

Water-grant limits murky

Pet projects divert money, some say

As the Clean Water Management Trust Fund's budget has grown to $100 million a year, so has the board of directors' spending on projects that fall outside the bounds of its original mission.

The trust fund, an independent state agency, gives grants to protect and improve water quality and waterways that exceed minimum legal requirements.

In at least three instances, the trust fund's board voted to fund projects outside the group's priorities, raising concern that it is funding pet projects of some board members rather than giving priority to protecting water.

Among the projects that have raised questions among board members and others are grants to an Outer Banks erosion control project, construction funds for a training center industrial park in Robeson County and an infusion of money into the county of the former chairman.

"There have been cases where the board and the staff have disagreed on what projects should be funded," said Bill Holman, the outgoing executive director. "But the board makes the final decisions."

Applications for grants to the trust fund are ranked based on their merits to improve water quality. Those scores form the basis for the staff recommendations.

Phil Baddour, a board member who is the newly appointed chairman of the trust fund, defended the board's grant-making decisions. He said the board is already reviewing its scoring of applications to merge its own criteria with those set by the legislature.

"There have been some exceptions, but by and large, the projects that have received the most points are the ones that have been awarded," Baddour said. "You don't expect boards to agree all the time."

Erosion at Kitty Hawk

Last month, for example, the board approved a $543,000 planning grant to help stop erosion at Kitty Hawk Bay, despite questions about whether the project will improve water quality.

The Outer Banks project involves building a bulkhead in front of private homes to slow waves and stop erosion threatening a public trail along the shore. Supporters said the wave break would serve as a demonstration project, enabling researchers to see whether sediment levels decline and underwater vegetation improves.

In October, a screening committee asked the town to reapply with more specifics about water quality benefits. A month later, the full board voted 8 to 6 to fund it, overruling the committee.

"My concern is it was more an erosion problem," said Kevin Markham of Cary, a board member and environmental consultant. "Obviously, we can't stop sea-level rise. If Clean Water gets into trying to ameliorate problems caused by sea-level rise, the state doesn't have enough money for that. I'm not sure that really fits in with our mission."

Another board member, Yevonne Brannon of Raleigh, said the board funded the erosion control project after turning down millions of dollars in requests from poor towns and cities that have basic needs such as providing clean drinking water.

In 2005, the legislature increased the trust fund's annual budget to $100 million a year from $62 million. Lawmakers added some restrictions to make sure the grants were spread around. They set a cap of $3 million for wastewater projects to a single applicant over a three-year period, effective in January 2006.

Some board members felt blindsided by the legislation, which passed in the closing days of the 2005 session. They faulted Holman, the executive director, for not keeping them better informed.

Southport's plant

Though only two wastewater projects had exceeded the cap, the legislation affected a $6 million request for a sewage treatment plant expansion in the town of Southport. The project was backed by then-chairman Robert Howard of Southport.

The Southport sewage plant improvements came in two phases. The first involved $1.6 million to buy land for waste sprayfields, followed by a larger amount to build pump stations and improve the sewage plant.

While the initial phase removed sewage pipes from the Cape Fear River and reopened shellfish waters, board member Karen Cragnolin objected. She noted that the trust fund wasn't supposed to fund projects that promoted growth and that the grant was going to a wealthy county. The trust fund's charter directs it to give priority to poor counties for sewage plant repairs.

Howard responded that the board was not prohibited from funding projects in wealthy counties, according to minutes of the meeting. In the past 10 years, the board has spent more than $27 million in Brunswick, a wealthy coastal county and one of the largest recipients of Clean Water grants.

When the town of Southport requested $6 million more for the project's second phase, the staff instead recommended $3 million, in keeping with the legislative cap. Howard made a motion in a committee to keep the project eligible for $6 million, on the chance the legislature would repeal or delay the cap on grants. In August, when it was clear the cap would stay, the board agreed to provide $3 million.

Howard, who resigned as chairman this month, was out of town, according to his office, and could not be reached for comment. He remains on the board.

Sen. Tony Rand of Fayetteville, the Senate majority leader, said he is concerned that the grant making process has become political.

"Are the projects, the criteria by which they are judged, well founded and are they followed?" Rand said. "Or is it somebody calling and saying 'give me that money'? If it's going to be a straight political process, we need to know that. Then we'll play politics. I didn't think we were doing that on this."

The Robeson project

In early 2005, the staff recommended funding $95,000 of a $238,000 request for designing a stormwater collection system at the Carolina Commerce and Technology Center, an education and industrial campus in Robeson County. The staff recommended not funding part of the amount -- $105,000 for surveying -- that would have to be done regardless of the stormwater system. But the board voted to fund the entire amount.

In August of the same year, Robeson County requested an additional $1.2 million to construct the project. The staff said paying for the construction phase was premature because an evaluation of the needs couldn't be done until the planning was finished.

Some board members pressed for full funding, and the board approved it, although the application was incomplete, hadn't been through the ranking process and had no score until one was arbitrarily assigned just before approval.

Dickson McLean, a Robeson County lawyer and board member, defended the project as one county's attempt to pull itself up by its bootstraps.

"There was $20 million of buildings which needed to get under way and required a stormwater project to be in place before they could properly construct the buildings," McLean said. "There was an urgency to get those buildings."

Staff writer Wade Rawlins can be reached at 829-4528 or wrawlins@newsobserver.

THE TRUST FUND

WHAT IT IS: The Clean Water Management Trust Fund, an independent state agency, was created in 1996 by the state legislature.

WHAT IT DOES: Its mission is to provide grants to help local governments, state agencies and nonprofit conservation groups finance projects that protect and restore the quality of waterways and establish buffers along rivers and creeks.

HOW IT'S FUNDED: The trust fund gives about $100 million a year in grants using tax dollars provided by the legislature. It funds about a third of its requests.

WHO BENEFITS: The fund's charter says poor local governments should receive priority in receiving grants for repairs of sewage treatment plants and failing septic tanks. Grants were not to be given for sewage plant repairs in anticipation future economic growth of a community.

WHO SERVES: The trust fund has a 21-member board appointed by the governor and General Assembly that review and fund applications for grants. It has a staff of 14 people.

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