Over the past few years, a pumping station at River Landing in Duplin County has struggled to keep up with the sewage flow at the upscale golf community started by hog farming magnate Wendell Murphy and his family.
Sewage has spilled at least three times from the station, and in one case made it to a pond close by. The nearby town of Wallace has workers divert the sewage flow during significant rains to prevent further spills. More importantly, the lack of sewage capacity has impeded River Landing’s plans to expand its hotel at the front of the 1,600-acre community.
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The town and the Murphy family’s representatives had been trying to hash out the problem when Mayor Charley Farrior’s phone rang in late May. On the other end was state Rep. Jimmy Dixon, a Warsaw Republican, who was willing to request state money to help fix it. The town hadn’t asked for his assistance.
Three weeks later, Dixon secured $830,000 for the sewer upgrades in the final version of the $23 billion state budget, one of dozens of earmarks — specially designated spending items — that lawmakers inserted totaling more than $70 million.
But this earmark primarily benefits a business co-founded by a powerful former state lawmaker who has long supported politicians of both parties with campaign donations. That includes Dixon, who was elected to the legislature in 2010. Since 2011, Murphy, his family and employees have given Dixon $42,750 in political contributions and in-kind support, such as food for a fundraiser, state campaign finance records show.
Dixon and Jeffery Turner, executive vice president of Murphy Family Ventures, which developed River Landing, say political contributions had nothing to do with the appropriation.
Murphy, who has retired from the family business, could not be reached. He helped revolutionize hog farming in North Carolina, building a company that was the nation’s largest hog producer at one point, and used his clout as a Democratic state lawmaker in the 1980s and 1990s to pass legislation favorable to high-density hog farms.
Dixon is a retired poultry farmer, and last year he succeeded in passing legislation limiting the damages residents could receive in court over claims that odors from nearby hog farms harmed their quality of life.
He said the $830,000 appropriation wasn’t about helping the Murphys. He saw it as helping pay for infrastructure that brings an economic boost. It will add a second sewer main out of River Landing to Wallace’s sewer system, and other businesses will be able to tap into it.
“I think that is one of the legitimate things that government can do is to help provide that type of infrastructure there that would then become an incentive for business to locate and expand and create more jobs,” said Dixon. “That’s what I see this thing down there is.”
He also said the money was available in the budget and if he didn’t spend it, someone else would.
Dixon acknowledged he knew of River Landing’s sewer issues before contacting the town, but said no one with Murphy Family Ventures contacted him for state help. Turner said the sewer problems were common knowledge in the community.
“Representative Dixon invited us to a meeting,” Turner said. “He understood there were some issues.”
At that meeting Dixon set up with Murphy Family Ventures representatives and town officials on June 5, they hammered out an estimate of what it would take for a quick fix, Farrior said. Dixon said he thought he could get all the money needed, save for an amount for contingencies.
Wallace is one of four towns that received appropriations in the state budget for water and sewer infrastructure projects. The other three cost a combined $245,000 and serve the towns of Taylorsville in Alexander County and Benson and Four Oaks in Johnston County. Officials in those communities say the projects do not have a business as a primary beneficiary.
It is unusual for state lawmakers to earmark money for such projects. In 2013, state lawmakers created the State Water Infrastructure Authority to provide grants and loans for water and sewer projects through a competitive process. But in recent years, state lawmakers have stepped up using earmarks for their districts to pay for projects that would typically go through the authority and other grant-awarding agencies.
Republicans have controlled the state legislature since 2011. A decade earlier, many of them spoke against such “pork barrel” spending when Democrats largely ruled the roost. In 2005, after The News & Observer identified a $10 million slush fund for such earmarks, some Republican lawmakers dubbed it “N.C. Pork Gate,” and displayed posters of suckling piglets.
The $830,000 Dixon secured also will go toward a higher powered motor at the struggling pump station at River Landing. The second sewer main and pump station improvements were discussed in the June 5 meeting.
Those upgrades will allow River Landing to add another 40 rooms to its 70-room Holiday Inn Express. River Landing also has roughly 1,400 sold lots that are ready for homes, but those homes can’t be built because of the lack of sewage capacity. It’s unclear how many of those lots could be developed because of the new infrastructure. So far, the community has more than 400 residences to go along with the hotel, two golf courses, a country club and the Mad Boar restaurant.
River Landing, near Interstate 40 around 90 miles southeast of Raleigh, is outside of Wallace’s borders, so it does not pay property taxes to the town. But the businesses and residents there pay a higher sewer rate as a result.
Residents and businesses in River Landing also spend money in the town, and the development attracts travelers to play golf or dine at the restaurant. Other businesses have tapped into the sewer line that Murphy Family Ventures put in 21 years ago to connect its development to the town’s wastewater treatment plant. Turner didn’t have an exact cost for that line, but said it was in the hundreds of thousands of dollars.
“We’re just glad to have those folks there,” said Farrior, who has been the mayor for 22 years. “We’re glad to have the development because it is a boost for the town of Wallace.”
The company turned its sewer infrastructure over to the town in 2011 as part of an agreement that gave the town the right to inspect and charge the Murphy business for any defects.
There is some debate in Wallace about whether River Landing’s growth, by itself, has required the need for a second main.
James Gantt, Wallace’s interim manager, said the town’s inspection of the system raised concerns that ground water, which does not need to be treated, was infiltrating the sewer lines in River Landing. River Landing might have to pay for that infiltration if the lines it put in were defective, which exacerbates the capacity issues.
Turner said the additional development beyond River Landing that uses the line has contributed to the capacity problem. Gantt said the town’s engineers say roughly 35,000 gallons of sewage comes out of River Landing per day that can’t be attributed to any residents or business there, leaving groundwater infiltration as the likely source.
The town was unwilling to pay for the sewer upgrades for the hotel, which meant Murphy Family Ventures would have had to pay to expand. Turner said the company would not have been willing to spend the money just to expand the hotel. He acknowledged a need for more sewer capacity for more building on the sold lots, but said that wasn’t in the company’s immediate plans.
Dixon leads the House budget committee that oversees spending on agriculture and environment, which includes water and sewer infrastructure projects. In an interview, he spoke of providing earmarks totaling hundreds of thousands of dollars for communities within his district in the past few years.
State budget negotiations were well under way when Dixon met with town officials on June 5. By then, both chambers had already passed their versions of the budget. His appropriation did not appear until June 19, when Senate and House leaders released a 438-page compromise budget bill. It identifies the Wallace spending and three other town appropriations as “various water infrastructure projects.”
When lawmakers produce a budget bill they also provide a second document explaining the spending plan. It’s commonly known as a “money” report. It mentions the three smaller expenditures to Four Oaks, Benson and Taylorsville, but the Wallace appropriation isn’t there. Dixon said there was no attempt to hide it but he could not explain why it wasn’t listed.
Rep. Nelson Dollar, a Cary Republican and a chief budget writer, said the Wallace appropriation came from existing funds within the water and sewer infrastructure grant program, while the other town appropriations represented new spending. The money report doesn’t include a “carve out” of an existing fund, said Dollar, who supported the Wallace appropriation.
Days after the budget’s passage, Wallace’s town council voted to approve receipt of the funding and its use as outlined in a memorandum of understanding between the town and a Murphy Family Ventures subsidiary. One council member, Warren Hepler, opposed the agreement.
“This one just sort of showed up on our desk,” Hepler said. “I don’t know who asked for the money, I don’t know where it came from and I was just a little bit uncomfortable saying yes.”
Hepler, who has had experience as a U.S. Department of Agriculture supervisor, said “I figured it was from legislators’ little fun fund.”
In the 2017 state budget, lawmakers included earmarks for three other town water and sewer infrastructure projects. The budget provides little explanation for the spending. Here is what those town officials say:
— $125,000, Taylorsville. Town Manager David Odom said the money will help pay for a new mechanical trash separator at its wastewater treatment plant. The town serves a state prison with a capacity for roughly 1,200 inmates. Odom said the total cost is $350,000. The town sought the help of local state Sen. Andy Wells, a Hickory Republican.
— $80,000, Benson. Town Manager Matt Zapp said flooding from Hurricane Matthew last year caused sewage backups that damaged 32 downtown businesses. The money pays for “backflow prevention devices” for those businesses. Zapp said the town requested the help from state Sen. Ronald Rabin, a Harnett County Republican.
— $40,000, Four Oaks. Mayor Linwood Parker also said the money is helping the town recover from Matthew. In this case it is going toward $200,000 in sewer repairs and upgrades on the south side of town. He said state Sen. Brent Jackson, a Sampson County Republican, won the appropriation.