January 13, 2005 MEMORANDUMTO: The Honorable Marc Basnight,
Co-Chairman The Honorable Charlie Albertson,
Co-Chairman The Honorable David Weinstein,
Co-Chairman Mr. Jim Johnson, Director,
Fiscal Research Division FROM: Robert Howard, Chairman,
Board of Trustees Introduction We are writing on behalf of the Board of Trustees and staff of the Clean Water Management Trust Fund (CWMTF) to thank the members of the General Assembly of North Carolina for your continuing strong support for investments in clean water and to make our annual report to the General Assembly and the public pursuant to GS 113A-257. GS 143-15.3B requires that the General Assembly appropriate a minimum of $100,000,000 to CWMTF each year. The 2003 General Assembly made many difficult budget decisions and cut many programs, including CWMTF. HB 397, Current Operations and Capital Improvements Act of 2003, and HB 1414, 2004 Appropriations Act, appropriated $62,000,000 to CWMTF in each year of the biennium. This is a cut of $38,000,000 or 38% from CWMTF. Thanks to the appropriation of $62,000,000 from the General Assembly to CWMTF in fiscal year 2004-2005 North Carolina continued to make progress in protecting and restoring water quality in calendar year 2004. As we face another challenging budget in 2005, the future of our state's environmental and economic health depends on your continued support and interest. Background For many years, the North Carolina General Assembly has advocated non-regulatory, incentive-based programs to complement North Carolina's environmental regulatory and educational programs and to ensure both a strong economy and healthy environment. In 1996 General Assembly created the Clean Water Management Trust Fund (CWMTF) (Chapter 113A Article 18 (GS 113A-251 et seq.)) "to clean up pollution in the state's surface waters and to protect and conserve those waters that are not yet polluted." The CWMTF "shall be used to help finance projects that specifically address water pollution problems and focus on upgrading surface waters, eliminating pollution, and protecting and conserving unpolluted surface waters, including urban drinking water supplies" and "to build a network of riparian buffers and greenways for environmental, educational, and recreational benefit. The CWMTF is an independent agency housed for administrative purposes in the Department of Environment and Natural Resources (DENR.) A twenty-one-member board of trustees establishes criteria, allocates funds, reviews applications, approves grants, and hires the executive director. Seven members are appointed by the Governor; seven by the General Assembly upon the recommendation of the President Pro Tempore of the Senate; and seven by the General Assembly upon the recommendation of the Speaker of the House. An advisory council composed of the Commissioner of Agriculture, Chair of the Wildlife Resources Commission, Secretary of DENR, and Secretary of Commerce or their designees advises the board of trustees. Local governments or other political subdivision of the state, state agencies, and nonprofit conservation organizations, such as land trusts, may apply for grants. Deadlines for applications are June 1 and December 1 of each year. The board of trustees typically meets 10 times per year - six times across the state and four times in Raleigh. In 2004, the board met in Southern Pines, Duck, Lenoir, Morganton, Kinston and Raleigh. In 2005, the board plans to meet in Randolph County, Brunswick County, Goldsboro, Charlotte, Rutherford County, Edenton, and Raleigh. Moneys from CWMTF may be used to acquire conservation easements or land in fee simple to preserve riparian buffers, wetlands, floodplains, and greenways; to restore riparian buffers, streams, and wetlands; to repair failing wastewater collection and treatment systems; to eliminate failing septic tanks and straight pipes; to prevent, reduce, collect and treat stormwater pollution; to plan water quality projects; and for administration and staff. The board works through three principal committees: acquisitions, infrastructure/wastewater, and restoration/stormwater. CWMTF applications forms for grants, grant evaluation guidelines, enabling legislation, lists of the board of trustees, staff directory, news releases, and other reports and documents are available at www.cwmtf.net. The executive director, deputy director, senior scientist, contracts and real estate acquisition manager, administrative officer, public information officer, and executive assistant are based in the central office in Raleigh. Five field representatives cover the coast, piedmont and mountain regions of the state. A part-time water quality advisor is home based.Progress and ChallengesStormwater management and extensive flooding in the mountains caused by Hurricanes Frances and Ivan were the major water quality and quantity issues of 2004. The CWMTF continued to make strides in reaching performance targets outlined in the state’s Progress Board report entitled North Carolina 20/20 Designed to significantly improve water quality throughout the state by the year 2020, the targets included increasing the percentage of water bodies fully supporting their uses, ensuring that 100 percent of all North Carolinians have access to clean and safe drinking water, protecting and permanently preserving one million acres by 2010, and improving water quality to ensure the continued viability of the state’s fisheries. In addition, CWMTF is helping the state achieve its goal of preserving a million acres of open space, as set out in GS 113A-240, and is helping Governor Easley implement his One North Carolina Naturally initiative.The NC Rural Economic Development Center’s Water 2030 Project estimates that state and local governments need to invest $15,000,000,000 to improve wastewater, stormwater, and drinking water infrastructure over the next twenty years. The Numbers In almost all the areas cited by the North Carolina 20/20 report, CWMTF grants are playing a role in reaching those performance targets. Here are some examples:· The CWMTF and its partners have helped protect 3,189 miles of riparian buffers and preserve 273,057 acres of land, thereby ensuring streams, rivers and lakes can continue or will be able to support their uses. CWMTF grants have been used to plan watershed and to purchase buffers surrounding drinking water supplies, investing $272,605,744 in land acquisitions to protect water quality.
All of these efforts are
just as important to North Carolina’s economic well being as they
are to the health and safety of its citizens and the environment.
They enhance both the recreational and commercial fishing industries,
strengthen North Carolina’s travel and tourism industry, and help
maintain North Carolina’s high quality of life. The CWMTF Board of Trustees and staff reviewed 83 applications requesting over $151,800,000 in the spring of 2004 (2004A Cycle) and 116 applications requesting over $198,500,000 in the fall of 2004 (2004B Cycle) for a total of 199 applications requesting over $350,300,000 in 2004. Thanks to appropriations from the General Assembly and to the closing out of old grants the CWMTF Board of Trustees approved 93 water quality grants totaling $74,465,000 in calendar year 2004. This does not include small grants to pay the transaction costs associated with the donations of conservation easements or small grants to pay the pre-acquisition costs for projects on high quality or impaired waters. The Board also approved expansion of Lake James State Park and protection of Shaken Creek and Camp Lejeune. These two projects will be financed by certificates of participation authorized by HB 1264, Finance Vital Projects (Session Law 2004-179). 2004 Highlights CWMTF was very pleased that most of the stream restoration projects that it funded in Western North Carolina survived the hurricanes and flooding. The efforts of CWMTF and our partners to protect the headwaters of streams and to prevent development in riparian buffers and 100-year floodplains helped mitigate the impacts of the storms. CWMTF continued to play a role in the dual protection of natural and economic resources by awarding more than $7,700,000 to help protect 6740 acres near military bases from encroachment by incompatible development. CWTMF provided over $1,700,000 to match $600,000 in funds from Goldsboro and Wayne County (CWMTF #2004A-007) to protect and restore 500 acres in Seymour Johnson Air Force Base’s accident potential zone. CWTMF funded three projects to protect water quality and Camp Lejeune: 1) over $600,000 to the NC Wildlife Resources to acquire H&M Farms and expand the Stones Creek Gameland (CWMTF #2004A-016), 2) over $1,100,000 to the Wildlife Resources Commission to acquire the Lanier tract and help protect Southwest Creek (CWMTF #2004A-018), and 3) $4,200,000 to protect Shaken Creek (CWTMF #2004B-026). CWMTF utilized the authority
provided by HB 1264, Finance Vital Projects, to acquire Shaken Creek.
CWMTF continued its partnership with the NC Coastal Federation to protect the scenic White Oak River by providing over $1,000,000 to help acquire the 1443-acre Quaternary tract (CWMTF #2004A-011). CWMTF and local governments in Gaston and Mecklenburg Counties have worked together to protect Mountain Island Lake, the region’s drinking water supply, since 1997. CWMTF provided over $2,600,000 to the Town of Mt. Holly to acquire additional buffers around Mountain Island Lake and Lake Wylie (CWMTF #2004B-022). CWMTF provided $2,500,000 to the City of Wilmington to reduce stormwater pollution into Hewletts Creek (CWMTF #2004B-707), one of the tidal creeks in New Hanover County. CWMTF and the City of Greensboro celebrated the construction of a 20-acre constructed wetland to treat stormwater pollution in South Buffalo Creek in November (CWMTF #1997B-904 & #2002A-705). CWMTF provided $1,300,000 to help Greensboro acquire property and construct the wetland. Pilot View RC&D, City of Winston-Salem, and CWMTF have built on our success in restoring a section of Salem Creek and have undertaken a major project to clean up Upper Silas Creek (CWMTF #2004B-706). CWMTF will provide $1,600,000. The City of Kinston and CWMTF are continuing to work together to improve treatment of wastewater and stormwater in the City. CWTMF provided $1,200,000 to Kinston for a wastewater reuse project that will reduce Kinston’s dischare into the Neuse River (CWMTF #2004B-508). CWMTF also provided $972,000 for the City of Lexington’s wastewater reuse project (CWMTF #2004B-511) and over $1,700,000 to the City of Lenior to replace a major leaky sewer line (CWTMF #2004B-510). 2004 Legislative Action The 2004 General Assembly
continued its strong support for protecting and restoring water quality.
The General Assembly appropriated $62,000,000 to the Clean Water Management
Trust Fund and fully funded the Parks and Recreation and Natural Heritage
Trust Funds for fiscal year 2004-2005. No funds were appropriated
to the Farmland Preservation Trust Fund.
CWMTF has revised its contracts with non-profit organizations to require compliance with Section 6.24 of SL 2004-124. CWMTF utilized the authority provided by Section 6.31(a) to match some federal farmland preservation funds. CWMTF recommends that the Commission on State Property established by Section 6.4 consider placing permanent conservation easements on riparian buffers, wetlands, and floodplains before selling any surplus property. CWMTF is working with the Wildlife Resources Commission to expand the new Light Ground Pocosin Gameland established by Section 19.8. CWMTF would like to work with the Department of Transportation and local governments to reduce stormwater pollution as directed by Section 30.20. HB 1264, Finance Vital Projects (Session Law 2004-179), sponsored by Representative Gordon Allen and Senator John Kerr, authorized the issuance of up to $468,000,000 in special indebtedness over two fiscal years to finance construction of university facilities and juvenile justice facilities. It includes authority to issue up to $32,000,000 in fiscal year 2004-2005 and $13,000,000 in fiscal year 2005-2006 to expand Lake James State Park and Linville River Gamelands in Burke County, to protect military bases from encroachment, and to expand other state parks. CWMTF, PARTF, and NHTF funds will be used to retire the debt for the land and water conservation projects. HB 1602, Extend Sunset on Conservation Income Tax Credit, by Representative Danny McComas, delayed the cap on pass-through entities for the conservation income tax credit one year until 2006. HB 1602 also authorized the legislature’s Revenue Laws Study Commission to review the program and make recommendations for improvement. SB 933, Compensate Some Counties for Wetlands Mitigation, by Senator Cecil Hargett, requires the Ecosystem Enhancement Program, private mitigation bankers, and others to compensate Tier I and Tier II counties for 20-years of ad valorem property taxes when stream and wetland mitigation projects are acquired or constructed in their counties to mitigate impacts in other counties. SB 1210, Implement Phase II Stormwater Rules, by Senator Dan Clodfelter, makes the Environmental Management Commission’s temporary Phase II Stormwater Rule the standard for acting on the first round of Phase II stormwater applications from local governments with some exceptions. 2005 Projects The CWMTF board and staff
will review 99 applications requesting almost $173,000,000 this spring
(2005A Cycle). CWMTF will also receive applications on June 1, 2004
and review them in the fall (2005B Cycle).
CWMTF will review 62 land acquisition projects requesting almost $112,000,000, 14 restoration and stormwater projects requesting almost $21,000,000, and 23 wastewater projects requesting over $40,000,000 in the spring of 2005. 2005 Legislative Issues CWMTF strongly supports GS 143-15.3B that requires an appropriation of at least $100,000,000 per year for the Clean Water Management Trust Fund. CWMTF has worked with an ad hoc Clean Water Working Group to identify potential sources of funding to address the $15,000,000,000 in drinking water, wastewater, and stormwater needs estimated by the Rural Center’s Water 2030 Project. CWMTF has worked with the Land for Tomorrow Coalition to identify statewide land and water conservation needs. CWMTF supports funding for the NC Farmland Preservation Trust Fund (FPTF). The 2003 and 2004 General Assemblies did not appropriate funds to FPTF and authorized CWMTF to match other funds to permanently protect farmland. CWMTF will work with the General Assembly to ensure that the State has a viable farmland protection program. CWMTF supports the work of the Conservation Lands Working Group, convened by the NC Association of County Commissioners, to clarify taxation of conservation easements. CWMTF would like to work with the Department of Transportation, local governments, and other partners to prevent and reduce stormwater pollution. In its 2003 Annual Report CWMTF advised the General Assembly on some of its concerns about implementation of the Conservation Reserve Enhancement Program (CREP). The NC Association of Soil & Water Conservation Districts has convened a working group to improve CREP. The Association, CWMTF, the Division of Soil & Water Conservation, and other partners plan to report to the Board of Trustees of CWMTF and others later this year. CWMTF uses existing stream maps and floodplain maps to review projects and calculate benefits. CWMTF supports the plan to improve the mapping and digital representation of streams developed and adopted by the Geographic Information Coordinating Council (GICC) on January 5, 2005 (required by Section 33 of SB 1152, Studies Act of 2004). CWMTF also supports completing mapping of floodplains in Western North Carolina (Phase III of NC’s Floodplain Mapping Program). CWMTF also supports the NC One Map project that will make more GIS data available to CWMTF and the public and improve public and private decision-making. Most of the landowners that sell conservation easements or land in fee simple to CWMTF or its partners donate value and utilize the NC Conservation Income Tax Credit. CWMTF supports the Conservation Income Tax Credit Program. The 2003 General Assembly debated establishment of a new Clean Air Trust Fund to provide funds for incentive based air pollution prevention and reduction efforts. CWMTF can share our experience with the 2005 General Assembly if it considers a Clean Air Trust Fund. CWMTF can assist local governments and other state agencies in efforts to reduce pollution in Falls Lake, Jordan Lake, and other drinking water supplies.
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| Funded New Projects During 2004 Calendar Year |
|||
| Cycle |
Number Projects |
Amount Funded |
Comments |
| 04A |
40 |
$32,924,500 |
Regular Cycle |
| 04B |
55 |
$51,330,000 |
Regular Cycle |
| 03D & 04D |
20 |
$430,527 |
Donated Conservation Easement Minigrants |
| 03M & 04M |
4 |
$100,000 |
Standard Minigrants |
| Funded Projects Summarized By Primary Purpose (1997A-2004B Cycles) |
|||
| Primary Purpose |
Number Projects |
Amount Funded |
Notes |
| Acquisition |
268 |
$272,605,744 |
Includes fee simple, easements, and greenways. |
| Coordinate Public Programs |
3 |
$5,750,000 |
|
| Minigrants |
54 |
$1,217,627 |
|
| Planning |
53 |
$9,208,297 |
|
| Restoration |
91 |
$56,490,976 |
Includes stream restoration, ag BMPs, and other types of ecological restoration |
| Stormwater |
41 |
$34,518,982 |
|
| Wastewater |
120 |
$105,841,377 |
|
| Total |
630 |
$485,633,003 |
|
| Summary of Requested vs Funded Totals |
||
| Number |
Amount |
|
| Requested |
1255 |
$1,449,471,908 |
| Funded |
630 |
$485,633,033 |
| % Funded |
50% |
34% |
| Summary of Requested vs Funded by Region |
||||||
| Region |
Requests- No. Projects |
Funded- No. Projects |
% Number Projects Funded |
Amount Requested |
Amount Funded |
% Amount Funded |
| Central Piedmont/Southern Coastal Plain |
297 |
136 |
46% |
$345,210,990 |
$98,669,802 |
29% |
| Eastern Piedmont/Central Coastal Plain |
262 |
109 |
42% |
$343,550,996 |
$80,815,905 |
24% |
| Mountains |
255 |
132 |
52% |
$261,879,680 |
$107,002,654 |
41% |
| Northern Coastal Plain |
141 |
80 |
57% |
$204,329,112 |
$79,161,131 |
39% |
| Statewide/Regional |
47 |
22 |
47% |
$72,197,011 |
$34,118,056 |
47% |
| Western Piedmont |
253 |
151 |
60% |
$222,304,119 |
$85,865,455 |
39% |
| Total |
1255 |
630 |
50% |
$1,449,471,908 |
$485,633,003 |
34% |
| Project Type, including multiple purposes |
Number Projects |
| Acquistion |
390 |
| Wastewater |
124 |
| Planning |
65 |
| Stormwater |
76 |
| Stream Restoration |
77 |
| Greenway |
54 |
| Nonpoint Source |
52 |
| Minigrant |
58 |
| Coordination |
3 |
| Wastewater Subcomponents (1997A-2004B Cycles) |
|||
| Wastewater Subcomponents |
Number Projects |
Wastewater Subcomponents |
Number Projects |
| Sewer System Repair |
32 |
Elimination of Permitted Discharge |
18 |
| WWTP Repair |
21 |
Repair Failing Septic Systems and Elimination of Straight Pipes |
12 |
| Wastewater Collection System |
30 |
Reuse |
13 |
| Decommission WWTP and Reroute Waste |
14 |
Backup Generation |
7 |
| Nondischarge of Waste (incl. Land App) |
20 |
||
| Funded Projects Summarized By Applicant Type (1997A-2004B Cycles) |
|||
| Applicant Type |
Number Projects |
Amount Funded |
|
| Local Government Total |
308 |
$216,793,414 |
|
| Municipal |
181 |
$133,055,910 |
|
| County |
73 |
$48,236,300 |
|
| Other Local Govt |
54 |
$35,501,204 |
|
| State Agency |
97 |
$147,129,335 |
|
| Non-Profit |
225 |
$121,710,254 |
|
| Total |
630 |
$485,633,003 |
|
|
Funded Projects Summarized By Region (1997A-2004B Cycles) |
||||||
| Region Name |
Region Abbreviation |
Number Projects |
Amount Funded |
|||
| Central Piedmont/Southern Coastal Plain |
CP/SCP |
136 |
$98,669,802 |
|||
| Eastern Piedmont/Central Coastal Plain |
EP/CCP |
109 |
$80,815,905 |
|||
| Mountains |
M |
132 |
$107,002,654 |
|||
| Northern Coastal Plain |
NCP |
80 |
$79,161,131 |
|||
| Statewide/Regional |
S/R |
22 |
$34,118,056 |
|||
| Western Piedmont |
WP |
151 |
$85,865,455 |
|||
| Total |
630 |
$485,633,003 |
||||
|
|
||||||
| Funded Projects Summarized By River Basin (1997A-2004B Cycles) |
||
| River Basin |
Number Projects |
Amount Funded |
| Cape Fear |
92 |
$72,979,400 |
| Neuse |
73 |
$58,745,570 |
| Catawba |
73 |
$44,084,123 |
| Yadkin |
72 |
$52,019,900 |
| Lumber |
45 |
$25,910,402 |
| French Broad |
43 |
$43,886,669 |
| New |
33 |
$8,925,332 |
| Tar-Pamlico |
32 |
$25,364,060 |
| Statewide/Regional |
30 |
$38,235,506 |
| White Oak |
29 |
$29,354,141 |
| Pasquotank |
28 |
$27,490,005 |
| Little Tennessee |
20 |
$22,344,967 |
| Roanoke |
18 |
$8,485,100 |
| Broad |
16 |
$7,949,090 |
| Watauga |
11 |
$5,918,928 |
| Chowan |
9 |
$9,352,810 |
| Hiwassee |
5 |
$3,712,000 |
| Savannah |
1 |
$875,000 |
| Total |
630 |
$485,633,003 |
| Projects Funded BY CWMTF In Calendar Year 2004 (Listed Alphabetically) |
||||||
| Application Name |
Project Number |
Approval Date |
Amount Funded |
Applicant Type |
County |
Watershed |
| Apex, Town of- Acq./ Beaver Creek |
2004A-001 |
7/12/2004 |
$612,000 |
Local Government - Municipal |
Wake |
Cape Fear |
| Archdale, City of - Acq / BB&P Tract, Muddy Creek |
2004B-001 |
11/15/2004 |
$175,000 |
Local Government - Municipal |
Randolph |
Cape Fear |
| Ayden, Town of - WW/ Sewer Rehabilitation, Swift Creek |
2004B-501 |
11/15/2004 |
$300,000 |
Local Government - Municipal |
Pitt |
Neuse |
| Blue Ridge Rural Land Trust - Donated Minigrant, Great Meadows Tract |
2004D-016 |
9/13/2004 |
$15,000 |
Non-profit |
Yancey |
French Broad |
| Blue Ridge Rural Land Trust - Donated Minigrant/ Chanlett Tract, Stillhouse Branch |
2004D-002 |
7/12/2004 |
$25,000 |
Non-profit |
Alleghany |
New |
| Blue Ridge Rural Land Trust - Donated Minigrant/ Coleman Tract, Handpole Branch |
2004D-003 |
7/12/2004 |
$25,000 |
Non-profit |
Avery |
French Broad |
| Blue Ridge Rural Land Trust - Donated Minigrant/ Dishman Tract, Watauga River |
2004D-006 |
9/13/2004 |
$25,000 |
Non-profit |
Watauga |
Watauga |
| Blue Ridge Rural Land Trust - Donated Minigrant/ McCarthy Tract, Little Glade Creek |
2004D-009 |
8/9/2004 |
$25,000 |
Non-profit |
Alleghany |
New |
| Blue Ridge Rural Land Trust - Donated Minigrant/ Stack Tract |
2004D-001 |
7/12/2004 |
$25,000 |
Non-profit |
Watauga |
New |
| Brevard, City of - Acq/ Brackens and Brushy Creeks |
2004B-002 |
11/15/2004 |
$25,000 |
Local Government - Municipal |
Transylvania |
French Broad |
| Brunswick County - WW/ Regionalization and Septic Tank Elimination, Lockwoods Folly |
2004B-503 |
11/15/2004 |
$1,357,000 |
Local Government - County |
Brunswick |
Lumber |
| Caldwell County - Acq./ Donahue Creek |
2004A-002 |
7/12/2004 |
$685,000 |
Local Government - County |
Caldwell |
Yadkin |
| Carolina Mountain Land Conservancy - Donated Minigrant, Wauchope Tract, Laurel Creek |
2004D-017 |
11/15/2004 |
$24,375 |
Non-profit |
Transylvania |
French Broad |
| Carolina Mountain Land Conservancy- Acq/ Ball Tract, Green River |
2004B-003 |
11/15/2004 |
$25,000 |
Non-profit |
Henderson |
Broad |
| Carolina Mountain Land Conservancy- Acq/ Buckner Tract/Dismal Creek |
2004B-005 |
11/15/2004 |
$939,000 |
Non-profit |
Henderson |
French Broad |
| Carolina Mountain Land Conservancy- Acq/ Schenk and Ball Tracts, Green River |
2004B-007 |
11/15/2004 |
$25,000 |
Non-profit |
Henderson |
Broad |
| Cary- Acq./ White Oak Creek |
2004A-003 |
7/12/2004 |
$600,000 |
Local Government - Municipal |
Wake |
Cape Fear |