P R O C E E D I N G S 8:32 a.m.

Chairman Howard: Good morning. Welcome to the North Carolina Clean Water Management Trust Fund meeting. It's good to have you in Raleigh and we look forward to today and the meetings and the committee reports as we will be having. First, to get us started, I would like to recognize Mr. Sig Hutchinson from the Wake County Board of Commissioners. Good to have you with us again.

Mr. Hutchinson: Thank you, sir. I appreciate that, Mr. Chair, and it's great to be back with everyone. I'm Sig Hutchinson, chair of the Open Space Parks Advisory Committee representing Commissioner Joe Bryan, chair of the County Commission, who is in San Diego today dealing with transportation issues.

But on behalf of Joe Bryan, and on behalf of the Wake County Commissioners, and on behalf of the Wake County staff, and just as important, on behalf of the Wake County voters, welcome to Raleigh. Thank you for all of the hard work that you're doing and we greatly appreciate your time and effort and dedication.

In November of this last year, the Wake County voters spoke with a great voice that open space preservation is critically important to this county. With the Wake County open space bond, $26 million was on the ballot. It got approved by the Wake County voters by 76 percent. In addition to that, Morrisville had a $4 million parks bond on the ballot. That got approved by 78 percent. In addition to that, Apex had a $13 million parks bond. And Apex is a very conservative community, for those of you who are familiar with Apex--a $13 million bond on the ballot, approved by 86 percent of the votes. Now, how in the world could 86 percent of the voters agree on anything?

But what we're saying is that open space preservation in Wake County is perceived by the voters as critically important to quality of life. Now, whereas there's no question that Wake County is leading the way in the state of North Carolina in open space preservation, it is very clear to me that the Clean Water Management Trust Fund is allowing that to happen.

Why do I say that? Well, the reason I say that is because the Clean Water Management Trust Fund allows us to leverage our dollars, and elected officials and citizens love the leveraging of dollars. So when we go to our 12 munici-palities and allow them to put dollars in and then Wake County puts dollars in and then Wake County puts dollars in and then we can come to the Clean Water Management Trust Fund and put those dollars in, those leveraging dollars are making things happen.

And all you have to do is look at the successful projects that are happening around Wake County from Marks Creek to recently Umstead State Park to projects in Apex and Wendell. And most recently I went over to the Little River project, the Clean Water Management project that Clean Water Management Trust Fund had money in. I went over there on New Year's Day. The park was closed and there was probably 70, 80 cars up along the highway, people just trying to get into these properties so they could enjoy the most important natural areas of Wake County.

So whether it is environmental protection, whether it is wildlife preservation, whether it's quality of life or recreational opportunities or whether it is economic develop-ment for this great state including jobs and protecting the most important natural areas, open space preservation is critically important.

We have $26 million in Wake County, Apex has $13 million, Morrisville has $4 million and how are we hoping to partner with the Clean Water Management Trust Fund? Well, I can tell you specifically what my chair, Joe Bryan, said. He said he would love to spend the $26 million in the next 12 months while he's chair of the Wake County Commission.

Now, you guys know that this work is very difficult to do. There's not an acquisition that's easy. They're all hard. But we not only have a green light on. We have two green lights on, trying to work with our partners to preserve the most important natural areas and to spin those dollars to make sure that that is actually happening.

There's a whole new revolution in thinking that's going on. I was talking to Frank Eagles, who's an alderman in Rolesville, the other day. And he was saying, "You know, the last four or five years my whole thinking about open space has completely changed. You know, four or five years ago I was thinking open space meant large lots, you know, houses widely dispersed. And over the last four or five years I've come to completely change my thinking to more tightly built communities and creating opportunities for open space to be preserved around those communities."

So we are reshaping the way that our communities are looking, are feeling. Most recently with Wake County we're giving every community, all 12 municipalities, the opportunity to update their open space plan. And I can tell you this: I can say every community is just bristling with pride over their open space plan and what is going on that is so exciting their community. Greenways, parks, clean water preservation, all of this is becoming a reality as a result of the hard work that you do.

I'll close with this thought: my wife, Nancy, and I were watching a movie last night, Field of Dreams, with Kevin Costner. There's a great scene about three quarters through that movie in which there's this old ball player named Moonlight Graham.

Kevin Costner is meeting with Moonlight Graham and Moonlight Graham says something very, very interesting to Kevin Costner and his character. He says, "You know, we just don't recognize the most significant moments in our lives when they're going on. It's only in retrospect that we truly recognize the significance of that particular moment."

And I would put that to us today, that we don't realize the significant moment of what's going on right now. The open space preservation, the accomplishments that you are doing many times are wrapped in long meetings, long drives to and from these destination points. But I want us all to stop for a moment and think about the field of dreams we're standing in. We're not in a meeting for 12 hours. We're in a field of dreams recreating this great state of North Carolina.

So with that being said, thank you so much for your hard work, we greatly appreciate it, and we greatly look forward to the continuing partnership we have with the Clean Water Management Trust Fund. Thank you, Mr. Chairman.

Chairman Howard: Thank you very much.

(Applause.)

Chairman Howard: It's good to have you with us. Next, I would like to call on Gina Weaver for the roll call. Gina?

Ms. Weaver: Robert Howard.

Chairman Howard: Here.

Ms. Weaver: Phil Baddour.

(No response.)

Ms. Weaver: Ron Beane.

Mr. Beane: Here.

Ms. Weaver: Bill Brooks.

(No response.)

Ms. Weaver: Rick Coleman.

Mr. Coleman: Here.

Ms. Weaver: Karen Cragnolin.

Ms. Cragnolin: Here.

Ms. Weaver: Nick Garrett.

(No response.)

Ms. Weaver: Joe Hester.

Mr. Hester: Here.

Ms. Weaver: Bill Hollan.

(No response.)

Ms. Weaver: Tony Lathrop.

Mr. Lathrop: Here.

Ms. Weaver: Maggi Markey.

Ms. Markey: Here.

Ms. Weaver: Kevin Markham.

Mr. Markham: Here.

Ms. Weaver: Dickson McLean.

Mr. McLean: Here.

Ms. Weaver: John McMillan.

(No response.)

Ms. Weaver: Johnnie Mosley.

Mr. Mosley: Here.

Ms. Weaver: Leroy Smith.

Mr. L. Smith: Here.

Ms. Weaver: Ronnie Smith.

Mr. R. Smith: Here.

Ms. Weaver: Stan Vaughan.

Mr. Vaughan: Here.

Ms. Weaver: Claudette Weston.

Ms. Weston: Here.

Ms. Weaver: Jerry Wright.

(No response.)

Chairman Howard: Thank you. We do have a quorum and we will proceed with the meeting. Let me ask the trustees who are attending the meeting today if you have a conflict of interest or even a perceived conflict of interest with any matter that we will be discussing today to please identify that item now.

(No response.)

Chairman Howard: Hearing none---

Mr. McLean: (interposing) Mr. Chairman?

Chairman Howard: Yes, sir.

Mr. McLean: There are two matters on the agenda for the Lumber River Conservancy, also one matter not submitted by the Lumber River Conservancy but which does affect our geographical area and I'd like to be excused from voting on that. And the last one is the Gainey application.

Chairman Howard: All right, sir. And if you would--and I would ask others too to identify those as we get ready to put it to vote so we can make that a part of the minutes also. Anyone else?

(No response.)

(Mr. Baddour enters at 8:41 a.m.)

Chairman Howard: Okay. Thank you. You have been presented your agenda package. The agenda is in front of you. Is there any additions or corrections or deletions for any items with regard to the agenda that anyone would like to discuss?

Mr. Holman: Mr. Chairman?

Chairman Howard: Yes.

Mr. Holman: Mr. Chairman, at your place you've received a letter from folks in Bladen County. We will make that item number 15.

Chairman Howard: Okay, the Dawson Singletary letter, item number 15. In addition to that, someone has a question with regard to the COPS program and we'll make that item number 16. Anyone else?

(No response.)

Chairman Howard: Hearing none, do I hear a motion that we adopt the agenda?

Ms. Weston: So move.

Chairman Howard: Motion. Second?

Mr. Beane: Second.

Chairman Howard: Second by Mr. Beane. Discussion?

(No response.)

Chairman Howard: All in favor, please say aye.

The Trustees: Aye.

Chairman Howard: Opposed by like sign.

(No response.)

Chairman Howard: It passes without opposition. A couple of housekeeping matters: again, if you would consider putting your cell phones on vibrate or turning them off during the meeting, that will be very helpful. As you talk if you would use the microphones. The acoustics in this room, like others that we've used, are not the best. So if you would consider using your microphones, it will be helpful, and if you forget, we will be calling that to your attention.

With regard to the field staff, we generally

make--and others who make the presentations if you'll just remain seated and make your presentation so that you can use the microphones, that will be helpful to us also.

I want to accept responsibility for us using this hotel. I made that decision early on because of the meeting rooms with the understanding that we could stay anywhere we wanted to. And I've had a couple of conversations today and we acknowledge that the elevator has been out and this is not the best place, but we also ask you to work with us in that we have to find places to meet that have rooms, both for the committee meetings and for the general meeting, that can accommodate us. We acknowledge that and we will continue to try to work to improve those situations.

You have been provided the transcript of the November the 15th, 2004 meeting of the Board of Trustees in Greensboro. Does anyone have any corrections or additions or comments with regard to that transcript?

(No response.)

Chairman Howard: Hearing none, I will accept a motion that they be approved as presented.

Mr. Vaughan: So move.

Chairman Howard: I have a motion by Vaughan.

Ms. Weston: Second.

Chairman Howard: Second by Weston. Discussion?

(No response.)

Chairman Howard: All in favor please say aye.

The Trustees: Aye.

Chairman Howard: Opposed by like sign.

(No response.)

Chairman Howard: So ordered. On December the 13th, we had a meeting with State Treasurer Richard Moore. I believe you have a copy of a letter in your agenda package with regard to that. Bill, would you have any additional comments that you might care to make with regard to that meeting?

Mr. Holman: Yes, sir. We had I thought a good discussion with Treasurer Moore and Janice Burke on his staff. And I think really the follow-up item is we received some guidance from the treasurer about how much debt Clean Water Management Trust Fund ought to enter into.

And he really sort of put it back to us and said, "That's really a policy decision," but he did volunteer the services of Janice Burke to help us as we run some scenarios and look at our options. So after this meeting I will be following up with Ms. Burke and we'll try to have her on tap for our Budget Committee meeting and some more discussion this spring so we can move towards--I think the board was interested in trying to set a cap on our indebtedness that we might enter into. So I think we took a step and there will be more decisions for the board to make later this spring.

Chairman Howard: It was a good meeting. He was very complimentary of your board for taking these steps and to consider this up front rather than in the arrears when we had already approved a great number of indebtedness. And the fact that we do not have any designated funding and those types of issues were all discussed. Anyone else who attended that meeting have any comments they would like to make?

Ms. Markey; I think you covered it very well.

Chairman Howard: Very good. Any questions?

(No response.)

Chairman Howard: Okay. The next item on the agenda is the 2030 Conference on December the 15th, 2004. And I believe Kevin Markham attended that representing our board. Kevin, if you would give us a report on that, please?

Mr. Markham: Yes. I think it was very informative. I believe that there's some information in the packet that summarizes it, a news release. Obviously the State is facing a very large shortfall in the amount of funding that is available for clean water management. I think it goes long way toward showing full funding and the Clean Water Management Trust Fund will go a long way toward helping the State out on that.

Chairman Howard: Any questions?

(No response.)

Chairman Howard: If not, thank you and thank you for attending that and keeping us posted. The Clean Water Management Trust Fund meeting with the NC Division of Forest Resources has not taken place and they are working to reschedule that to get everybody's schedules coordinated. So we will report to you on that meeting at a later date.

The Clean Water Management Trust Fund committee appointments are in front of you. We have realigned some of the committees to both get attendance in order--you know, one of the good things about this committee is that there's so much talent on this board of trustees and so many opportunities that we have. And it is just very pleasing that as we call around and ask if you would serve on a committee or if you would chair a committee that we received 100 percent positive response. We did not have a single negative response.

And to the chairs who served in the 2004 year, I want to take this opportunity to thank you because our board has moved more towards getting great work done in the committee structure rather than during the board of trustees meetings, which should be more of a reporting function. And you've done a great job in that transition this year and I thank each one of you for the work that you've done to help make the work flow of the board's activities more effective. And we just appreciate you very much.

The committees will continue to function in the same way that we did last year. We would reiterate that each member of the board of trustees is invited to every meeting of committees and can participate in the discussion. That's where the detail is handled.

So if you have--particularly when the committees are meeting to discuss and consider projects, if you have an interest in a particular project, please feel free to attend those committee meetings and you will be allowed to participate in the discussion. The vote, of course, comes from committee members, but you will be allowed to partici-pate in that and we invite you to attend. Any questions with regard to the committees?

(No response.)

Chairman Howard: Okay. The next item on our agenda is the North Carolina Recreation and Parks Association recognition of Clean Water Management Trust Fund. Ron Beane attended the meeting on November the 14th. Yes, sir.

Mr. Beane: I did attend a meeting. It was held in Hickory, and that was on the Sunday when we were meeting in Greensboro. It was a good meeting, but I went for a different reason. I had been selected as the Legislator of the Year for that group.

(Applause.)

Chairman Howard: We're honored to have with us this morning one of the champions of the Clean Water Management Trust Fund. He serves in the North Carolina House of Representatives, Representative Gordon Allen. Could we ask you to come up just a second, please? We appreciate your recognition of the Clean Water Management Trust Fund and what we do. I'm not going to do one thing that I've been requested. Ronnie Smith has asked that he be allowed to talk during this presentation, but we're going to keep him quiet.

Representative Allen: He already caught me for 30 minutes when I got here.

Chairman Howard: Without the support of the legislators and without the leadership of people like you in the House of Representatives and in the Senate, we would not receive funding. We recognize that and we want you to know how much we appreciate you and your efforts on behalf of the Clean Water Management Trust Fund. And as a token of our appreciation we wanted to present to you--Bill, if you want to---

Mr. Holman: This is a picture and a plaque, and this is of the new Lake James State Park expansion. Representative Allen was instrumental in getting House Bill 1264 to finance vital projects that enabled Clean Water Management Trust Fund and the Parks and Recreation Trust Fund and the Natural Heritage Trust Fund to borrow funds to expand Lake James State Park and also protect our military bases. We greatly appreciate it and thought you would want a little memo of your good work.

Representative Allen: One quick observation.

Chairman Howard: Yes, sir; please.

Representative Allen: I was in the Senate many years ago, 1969 actually. That was my first term. Nobody knew what the word "water" meant back then. It was the beginning. It was the session that started a lot of what we are doing now. I want to tell you what a great state I think we live in. We thank all of you all for the tremendous stuff you do. We're indebted to you.

Chairman Howard: Thank you. Thank you very much. We appreciate it.

(Applause.)

Chairman Howard: In addition to the committees we are very fortunate to have some active advisory board members. They are created through the statute and we appreciate them very much. Jim is always in attendance, and others come in and represent their respective areas. And we want you to know how much we appreciate you and what you do for the Clean Water Management Trust Fund. If either--do you have anything to say? We would welcome those comments, but we do thank you.

The 15th item on our agenda is the Dawson-Singletary letter. I believe each member has been provided a copy of that letter. I'm going to simply ask that the staff review the letter, evaluate the letter. And we will respond appropriately in the interim and we will have this as an item on our agenda for the February meeting and report back to you the results of our investigation of that. Does anyone have any further comments with regard to this letter that we just received?

(No response.)

Chairman Howard: I had a request from a member of the board of trustees to talk about COPS this morning, and the question is how much dollars have we approved to this point and what do we think those payments will be. And we discussed that I believe at the November meeting, but Francine, do you have that off the top of your head? I know you had no advance warning.

Ms. Durso: Yes. I do have that and actually, we have the same spreadsheet that we've shown you all the past couple of meetings. But basically you all have approved two projects to use the COPS funding on. And I believe that somewhere the total of what you all have approved is somewhere--there it is. Thank you, Tom.

The loan amount of those two projects totaled together is the $10,842,000. Now, since the bonds have not been sold yet, we don't know what the interest rate is, but we were advised it would be somewhere between 42 percent and 5.9 percent. So the spreadsheet that you have up there assumes the higher interest rate of 5.9 percent, 20 year length, which I believe is standard.

And so what we've done is done the calculations there to show the estimated--the principal that will be paid each year, $542,000, and then the estimated interest based on that higher interest rate. So you can see that the first year, next fiscal year, would be the payment of almost $1.2 million, principal plus interest, and then it would decline each year for 20 years. Again, that's for the two projects that you all have approved to use the COPS funding.

Chairman Howard: And each approval with regard to the COPS program would be within those amounts allocated by the legislature. And each individual case would require the approval of the board, the full board of trustees. Have we answered the questions that need to be answered?

Mr. L. Smith: Yes, sir.

Chairman Howard: Any discussion?

(No response.)

Chairman Howard: In that regard I had overlooked agenda item number 9. Mr. Grover McPherson, who is president of the North Carolina Association of Soil & Water Conservation, asked for a meeting with the Clean Water Management Trust Fund. Several of us met with them in--actually, I forgot the date. It was in---

Mr. Holman: Right before Christmas, December the 22nd.

Mr. L. Smith: 21st.

Chairman Howard: Several of us went to that meeting. Leroy attended. Bill Hollan attended. Bill Holman attended.

Mr. Holman: Tom Massie.

Chairman Howard: Tom Massie. And they had good representation. And we had a great dialogue of the concerns that our board has with regard to the administration and the operation of the program, the CREP program, and the fact that we reserve the right to approve our projects and that we had made some very reasonable requests and to this point we had not received a response from those. It was on a deferred basis right now, but the meeting was very positive.

We appreciate the opportunity to meet with Mr. McPherson and with their board. I think that they are meeting today and tomorrow perhaps--or yesterday, today, and tomorrow here. And Tom Massie and I believe others may be attending portions of those meetings.

And I just felt real good about the fact that I believe that some facts that had been distorted and our efforts had been misrepresented were able to be cleared up. We were able to clear that table and we appreciate that meeting. Bill, do you have anything you would like to add with regard to that meeting?

Mr. Holman: Leland and I will cover it in my executive director's report.

Chairman Howard: Tom Massie?

Mr. Massie: No.

Chairman Howard: Leroy?

Mr. L. Smith: No, sir.

Chairman Howard: Anyone else?

(No response.)

Chairman Howard: Hearing none, thank you very much. This is the time on our agenda that we reserve for any public comments. Does anyone in attendance have any comments that they would like to make to the board?

(No response.)

Chairman Howard: Hearing none, we will move forward to the Personnel Committee report and I will call on Chairman Ronnie Smith for that report.

Mr. R. Smith: Thank you, Mr. Chairman. We did have a lengthy meeting in December, on December 9th, concerning personnel. We reviewed the actions taken by the Executive Director from the past year and everybody seemed to have a favorable impression of his duties except one of us, and that was me. No, I'm kidding you. We received a couple of letters of praise for Bill and I think that was very nice. I think he has done an outstanding job. The committee felt like he had done an outstanding job over the past year.

When I took over this committee a year ago, there were some questions concerning some matters that have now been cleared up and things are running smoothly. We made it clear that he is in charge and when he is not there, Francine is in charge. And I think that serves well with our employees and has served well for the trustees.

You have a copy of that meeting and what was discussed in your packet. Feel free--if you have any questions at this time, I'll try to answer those for you, but I think it's all self-explanatory. And I think we all need to give our Executive Director a round of applause for what he has done over the past year and what he has done since this committee was formed.

(Applause.)

Mr. R. Smith: I remember a time when I didn't think that much of Bill because we were on different sides of the fence on a lot of the issues. But Bill, I really appreciate what you're doing for this great state and I think Gordon Allen was the same way. He appreciates what you're doing for this state and the whole General Assembly should appreciate what you're doing.

Mr. Holman: Thank you.

Mr. R. Smith: The second item was the accomplishments which I just alluded to at some point and our goals for next year. And I think the goals are ambitious, but that's the way it ought to be. I hope we can accomplish all those goals. I know it will be difficult, but that's what we need to work for. And the executive director and the staff--we need to work towards those goals. We appreciate all the other staff is doing and I think we need to give them a round of applause because they've made Bill Holman look good.

(Applause.)

Mr. R. Smith: And Mr. Chairman, the last item would be the staff review on two employees for salary range changes we made in 2004. And I believe that's an item that we need to take a vote on. And that would be those two employees‑‑let's see who they are, make sure I get the right ones. It would be Leland Heath and Nancy Guthrie. And we approved those salary increases unanimously and at this time I would entertain a motion that the full committee approve those.

Ms. Weston: So move.

Mr. McLean: Second.

Chairman Howard: That's the motion from the Personnel Committee that the salary increases be made effective February the 1st?

Mr. R. Smith: February 1st; that's correct.

Chairman Howard: Any discussion?

(No response.)

Chairman Howard: Hearing none, all in favor please say aye.

The Trustees: Aye.

Chairman Howard: Opposed.

(No response.)

Chairman Howard: The motion carries without opposition.

Mr. R. Smith: Thank you, Mr. Chairman. That concludes our report.

Chairman Howard: Any questions for the Personnel Committee or any items pertaining to the Executive Director's review?

(No response.)

Chairman Howard: Hearing none, the next report is from our Long Range Planning Committee and I'll call on committee chairman Karen Cragnolin for that report.

Ms. Cragnolin: Thank you, Mr. Chairman. We had a long and productive meeting yesterday where we looked over the 11 recommendations that have been made out of the long range planning group, took that down to five, looked at those and then selected one to focus on. And I believe that it's an item that we can focus on as a board and come up with some new recommendations regarding orientation.

We could use this for orientation of new trustees, but take offshoots of this for new employees and also use some of it as promotional or informational and educational material for the General Assembly and the general public.

So Doc Klein worked with us to get to that point and he's going to come back next month with a full report typed out. We did get to some action steps and believe we're kind of on our way to having an orientation process that we can all feel good about.

The other item that we took up yesterday was we met with Dr. Steelman from N. C. State and a graduate student to look at the pilot survey test results. And the committee basically approved the questionnaire that she has put together and asked that the chairman of the Long Range Planning Committee work with her to finalize that and to move forward so that we can stay within the time frame of working with this project and the graduate students.

If you look at your place today, there should be a copy of the questionnaire actually that Dr. Steelman has prepared. And we'll have an opportunity at each stage of this process to review results, check with them. She'll be back to us to give us preliminary results and we'll have a chance to tweak it the entire way through the process. The committee had a good comfort level with that yesterday. That's my report, Mr. Chairman.

Chairman Howard: Are there any questions for Karen or the Long Range Planning Committee? This committee has been one of the working committees, very active committees for several years now, and have developed our handbook. And we're looking at ways to--or they're looking at ways to improve that process and to better utilize our web site with the trustees.

And I might make mention here that the web site--if you don't look at it frequently, you might want to look at it because there's a lot of opportunities. And Lisa tells me that she's going to actually put an area on the web site that deals just with the trustees to--it will be essentially the same information that we have in our notebooks, our long range planning notebooks. So that will be helpful once that's up and running. Any other questions?

Ms. Weston: I just have a comment. I would like to thank personally Karen and that committee. They took some mud out of the creek and really molded some things. I live by the blue book, so I thank you and your committee.

(Applause.)

Chairman Howard: A good job. The next thing on our agenda was a joint meeting by the Long Range Committee and the Restoration/Stormwater Committee. Karen and Claudette, who's going to take that?

Ms. Weston: I am.

Chairman Howard: Claudette?

Chairman Howard: Thank you, Mr. Chairman. Actually, this has turned out to not be a potential action item. In September Clean Water received two proposals that were for comprehensive monitoring for restoration and stormwater and we reviewed those proposals. And we have asked staff to go back and work with particularly the North Carolina water quality group to develop a more detailed budget to answer some questions that the committee had. So there is no action item.

I'll be glad or Beth, either one of us, to answer any questions, but where we are now is to go back and get more information to decide exactly which group we want to use and why.

Chairman Howard: Okay. It was a good report yesterday and it is a complex issue. But Beth or Claudette or Karen would be glad to answer any questions if anyone has any. It will be an effective program going forward. Okay. Anything else?

Ms. Weston: That is my report, sir.

Chairman Howard: The next agenda item is the Legislative Committee report and we're going to call on Phil Baddour for that report.

Mr. Baddour: In our chairman's absence, Mr. McMillan, I will try to fill in for him. We talked about the state budget and what the outlook is. It's again going to be another difficult year, maybe not quite as bad as it has been in the past.

How bad it is will be dependent to some extent on whether the legislature decides to extend the half cent sales tax and the income tax on those making over $200,000, the surcharge for that, that are scheduled to expire. If those two are allowed to expire, then it is going to be a much more difficult time for them.

Nonetheless, we talked about the funding for Clean Water as a high priority. Bill Holman had prepared a handout, a memorandum, which I think all of you have at your desk, which eloquently makes our case and deals with the issues of state water quality needs and also points out once again the partnership that we have been involved in in supporting our military, particularly in light of the BRAC, the military Base Realignment and Closure Commission's work that's coming up this year. So I encourage you to take a look at that and to read that very carefully.

We decided that there is a role for the members of this board in lobbying the General Assembly. And Chairman McMillan I'm sure will be calling on some of you. If you have particular relationships with members of the House and the Senate, if you would let me know or let Chairman McMillan know or Bill know or our chairman know. When the committee chairs have been selected in the appropriations committees and the subcommittees that will be dealing with our budget, in particular we want to key on those legislators, but really all members of the General Assembly. So we hope that you will be willing and respond when you're called on to help us lobby with that effort.

Bill, I think, is going to appear and make a report to the Environmental Review Commission at the Legislative Building. Is that tomorrow maybe, Bill, or this week?

Mr. Holman: Thursday, January 13th.

Mr. Baddour: Thursday, January 13th. If any of you could be there just to be there in support of him, it would be good. It will be a fairly short presentation. They invited any of us that are around or could make a trip to be there. Also, we talked about our support for initiatives to do statewide stream mapping and floodplain mapping in the mountains. There are no action items, Mr. Chairman.

Chairman Howard: Okay. Any questions?

(No response.)

Chairman Howard: Okay. I again would encourage you--I think the legislators come in on the 26th and they will have a swearing in ceremony. Anyone who can attend that, that's always a good day to meet your legislators and to be with them. And when you come in if you would use your name tag, that would be very helpful so that you would be identified as being with the Clean Water Management Trust Fund. That would be very helpful.

Any other questions?

(No response.)

Chairman Howard: Hearing none, the next agenda item is our Executive Director's report. Mr. Holman?

Mr. Holman: Thank you, Mr. Chairman, members of the board. Let me first--as you all know, we've had a number of outstanding interns working for the Clean Water Management Trust Fund over the last several years. And let me introduce the latest one in the class. This is Taylor McMillan. Taylor, please stand up.

Mr. McLawhorn: McLawhorn.

Mr. Holman: McLawhorn. I've got McMillan on my mind. I'm sorry. There's a bunch of McLawhorns in Pitt County. But Taylor has been a big help around the office. He has assisted me on drafting some letters. He's done a lot of work with Robin and Lynn on real estate matters, and he even helped fix this--whatever we call this system. He made it work better. He's a Jack-of-all-trades.

The next item is--Mr. Baddour mentioned the Clean Water Management Trust Fund makes an annual report to the General Assembly and our turn to do that will be on this Thursday at the Environmental Review Commission on January 13th.

They will also be hearing reports from the other conservation trust funds, the Natural Heritage Trust Fund and the Parks and Recreation Trust Fund, and an update on the Million Acre Initiative and an update on just the state's work on conservation. So we believe our part of the Environmental Review Commission agenda will be in the afternoon and welcome any trustee who is able to attend.

Let me next turn it over to Francine for a budget update.

Ms. Durso: Thanks, Bill. Good morning. At your place you have three yellow sheets. One is the budget sheet and the next two are the project status update sheets, so you have all three of those. Let me call your attention first to the short spreadsheet side of the yellow sheet. What this is is a summary. Since we did not meet in December, I've done a summary for you for both the November and December 2004 cash flows.

One item that I really wanted to point out is line item number 8, and that is the allotment that we received in December. And as you recall, due to the hurricane damage in the mountains this last fall, the governor did take back .75 percent of our budget to apply towards that. And the asterisked note I have at the bottom, the .75 percent which is being reverted from our budget is a total of $465,000. Now, what they are doing is taking that out over the next seven months, so our allotment is basically being reduced by $66,429 per month. The first month they took this out was December and they will continue to take it out from January through June. So they did not take it out all at once for the hurricane relief. So our allotment will just be reduced each month through June. So that was the only thing I really wanted to point out on that side of the spreadsheet.

On the other side we just continue to have the same information that I've been presenting to you all where we summarize the current cash balance, the items that are under contract. And then of course what I'm doing is projecting forward, because this is projected through the rest of the fiscal year, so we're projecting the remaining allotment to come in, remaining interest, and then the various commitments that you all have already made for the projects that we are working to get under contract.

So bottom line, just moving down to line 31, there are some tentative things that you all are considering in line item 28 and line item 30. I've put those in there assuming that they may be and so I've listed this as a potential balance because you may or may not approve these. But basically at the end of this fiscal year before we get our allotment for next fiscal year, we should be somewhere in the $250,000 range. That's what we're coming out of the end of this fiscal year with because you all did allocate most of the remaining funds when you did the November approvals.

At the bottom, though, I do have a few other items--the funds that you all have committed to future project phases. And these are actions that you all took in November. The first is a line item showing the COPS principal and interest payment that we just looked at. We anticipate that that will be taken out in August of '05 and then in February of '06.

And then there are three projects that you all committed additional funds to out of next year's funding. Those are listed: Parks and Rec, Umstead State Park, The Nature Conservancy, Long Hope Creek Trout Club tract, and Wildlife Resources, Long Ridge tract. So out of next year's budget you all have actually already committed a little over $5 million. And those were actions that you all took in November. I'd be happy to answer any budget questions at this time.

Ms. Cragnolin: Do we have a sense of if the governor is going to try to take any additional funds for flood relief, and did all the other funds receive the same retraction?

Ms. Durso: Bill might want to address if the other funds have received the same reduction, but we are anticipating that they will take 1 percent of our whole budget this year and what they've taken right now is .75 percent. So I'm still assuming on line item 6 that at some point they will come back for the other .25 percent, but we're not for sure about that.

Mr. Holman: You know, we're trying to be conservative and budget for a 1 percent cut for the hurricanes. They may not need all that. They may need more. But I think so far the indication from the governor's office is that the $90 million that he had set aside for hurricane relief is going to be adequate. The General Assembly may have other ideas when they come into session. And the .75 percent cut was a cut across state government. So we were treated the same as other state agencies.

Ms. Cragnolin: Thank you.

Ms. Durso: Let me move on real quick to the project status update. These are the other two yellow sheets that you have. One sheet is still our listing of projects that you all approved last summer in the July cycle. We continue to work through those. We do have a number of the larger dollar item projects that the contracts have been signed and they're over at DENR waiting to be encumbered. So these are all pretty much moving along.

There are several that we have sent first drafts out to folks and have not heard back from them yet. And usually after about six weeks I follow up with them and try to figure out why we have not heard back. So we are continuing to nudge all these forward and try to get them under contract. The other list that you have--oh, excuse me. On the back of that sheet we also have--there are some donated grants and also several mini-grants where the drafts have been sent, but they're not under contract yet.

The other sheet is the list of the projects that you all approved on November 15th of last year. That was the last cycle. As you can see, we're moving down the list, but we have not gotten that many contracts out due to the fact that we're still trying to work on the ones that were approved in July. So we are moving forward. A number of those have been encumbered, however, and a number of drafts are going out. If you have any specific questions on any of those projects, I'll be happy to address them.

(No response.)

Ms. Durso: Thank you.

Mr. Holman: Thank you, Francine. Let me next call on Tom Jones. You all should have received a late Christmas present from the Clean Water Management Trust Fund in a blue box.

Mr. Jones: I did not have a chance to bring them with me, but I think you're all familiar with the notebooks. If you didn't get them before this meeting, they should be waiting for you when you return home. The notebooks have been delivered by the printers and I appre-ciate the suggestion that came from some of the trustees to go ahead and make three notebooks, one for each committee. I think that will be a lot easier for people to tote around as well.

You also received in your board packet agenda item H‑4, which is one of the typical spreadsheets. It looks like every other spreadsheet you get. But it is a total cycle listing of all the new applications as well as all the deferred. I'd like to direct your attention just for today's purposes--no point in going through all this, but the summary sheet which is the last sheet on that packet. In addition, this morning you were given a green sheet that looks just like that last sheet in your packet. And that's because there has been one change.

But what we have here are--the first table at the top is the new applications summarized by category. And this is where I'd like you to note the change. There was a planning grant after Bern Schumak got more involved in the details that had been assigned to the Acquisition Committee that needs to go to the Restoration. So what we have are 36 acquisition projects, 10 restoration/stormwater projects, and 13 wastewater projects for a total of 59 new applications for $80.7 million.

That has also been summarized by region, mountains, piedmont, and coastal plan, and by applicant

type, local government, nonprofit, and state agencies. The total cycle including the deferred projects are at the bottom of that highlighted in yellow up here and that is that there are a total of 99 projects altogether for almost $173 million that are before the board this cycle. I think that's the end.

Mr. Holman: Thank you, Tom. Again, if you have not gotten your box, please let us know so we can make sure you have the notebooks you need as we go through the cycle.

Mr. Vaughan: Can I ask a question?

Mr. Holman: Yes, sir.

Mr. Vaughan: On the green sheet I was just curious as to--you know, if you look at the geography of the request, it's 63 percent and 84 percent of the dollars going to the coastal plain. I'm assuming that that's because of the military base situation, but I just thought that was a curious allocation.

Mr. Holman: There are almost $42 million worth of military projects in this cycle, so that is a big chunk of the coastal plain. But also the coastal plain folks have been very aggressive about seeking funding too, so

they--I don't think it's usually that high a percentage, but it's usually a pretty high percent of what's before you.

Let me next ask Lisa as a way of kind of summarizing what's in front of us, I thought her news release was a good lead-in to coming attractions.

Ms. Schell: And it also dovetails nicely with what Tom just presented to you. It is my responsibility to take all the information that Tom prepares and puts on the spreadsheets for you all, synthesize that down, and get it out to the media to sort of set the stage for what this board will be doing in the coming months. And we did that with the news release that went out probably about a week and a half after the closing of the cycle on December 1st.

The lavender cover sheet packet that you all have in front of you contains some of the fruits of that effort. In particular, I do want to mention that The News & Observer was very interested in the Town of Pittsboro biodiesel reuse project. And also, Biodiesel Magazine called us wanting information about that project as well. I can assure you that Biodiesel Magazine probably is not something you can find at your neighborhood newsstand, but it's a probably a national--or it is a national trade publication for that industry. So that will give us good national exposure when it comes time to consider that project.

Backing up--well, you might have noticed that Channel 5 was here yesterday. And they did a story based on that news release that I sent out highlighting the military base acquisitions that are coming before you. They inter-viewed Mr. Baddour and also Bill talking about the need for that kind of action and acquisition.

And not only does that fit in nicely with the news release that's coming out, but it also fits in nicely with the talking points that Bill presented to the legislative committee yesterday backing up the reasons why Clean Water Management Trust Fund needs full funding. So the seed is planted, as they say. And that story did run twice. It ran last night and it also ran this morning and it's also, I believe, on their web site, but I need to double check that.

Backing up even just a little bit farther, after the November meeting I worked with Amy Fulk in Senator Basnight's office as well as with individual offices of representatives to send out news releases on individual projects, key projects in key areas that you all approved. Again, in your lavender packet the fruits of that effort are there. I had somewhere in the neighborhood of 21 contacts with media since our last meeting based on those two news releases primarily.

Mr. Holman; Thank you, Lisa. Good work. Any questions for Lisa about communications?

(No response.)

Mr. Holman: Let me kind of handle the next two items together. As you know, we received about $42 million worth of requests from local governments, other state agencies, and nonprofits for work that involves protection of the four major military installations.

On my to-do list is to meet with representatives of the Natural Heritage Trust Fund and the Parks and Recreation Trust Fund to do a little coordination to see who does what with those projects. There was, as you recall, a fair amount of coordination between the three trust funds on the Lake James and Linville River gamelands projects last fall, so this is kind of a similar effort where kind of the load is, you know, balanced among the three trust funds. Probably all of those details won't be worked out by the time of the February Acquisition Committee, but at least we'll have a concept of what's kind of appropriate for each of the three trust funds. So I'll be bringing that to you in February.

There are also--because of the BRAC process, there's I think a need for the State to show progress on at least military protection projects. And there may be an opportunity for us to ask--"us" being the three conservation trust funds--to ask the North Carolina Advisory Committee on Military Affairs that has a $2 million budget for assistance in kind of a transaction pre-acquisition costs associated with some of those projects.

So as we're reviewing them and looking at the capital funding, perhaps some other funds could be used to do the preliminary things are needed--you know, surveys, environmental assessments, drafting easements, those kinds of issues. So we'll have an opportunity to visit with that commission on the 19th at Fort Bragg and may come back to you asking for a little support in that effort later this year.

Any questions about that or any suggestions on how we coordinate?

Mr. Hester: I just have a comment about the BRAC situation. It's my understanding that because of political issues in the past involving closing of bases that as a result of that, rather than do it--it wasn't done in a haphazard fashion, but in a nonsystematic fashion--they come up with some pretty specific criteria by which using those criteria they decide what bases are going to be closed and those that are not going to be closed.

And I see this big rush to be pro-friendly to the military, which I think North Carolina always has since its inception. But I would like for you to find out or the staff to find out if this is going to have any effect. I don't think it is going to have any effect. I think once you go down that list of criteria either you're in or you're out.

And I understand there's a big feeling that we need to be military friendly and push this forward, but I would just like to know if in fact being military friendly and doing this in some sort of expeditious manner is going to result in any difference whether or not--I don't see any North Carolina bases being closed. I think they're too important and they're too large. I see North Carolina benefiting from closings of bases in other states whether or not you do anything about this property acquisition. But I'd just like to find that out for myself.

Mr. Baddour: I'd like to respond to that if I could, Mr. Chairman.

Chairman Howard: Sure; go ahead.

Mr. Baddour: We've seen the general criteria, and the number one criteria is ability to perform mission. So to the extent that encroachment--and I think you can see in the air force context or even in the army or the marine corps--to the extent that you have development that encroaches and reduces the ability to perform mission, then that would be a black mark.

I've been saying all along that the immediacy of BRAC is terribly important because I think it sends a message. And who knows when they get down to it exactly, you know, what will make a difference in making those decisions. But this definitely is not a short range issue. I mean the idea of protecting our military bases from encroachment is a 25, 30, 50 year problem. So it makes sense to address it now at a time when the eyes of the country perhaps are on this issue, but it is an ongoing issue that we need to be involved with.

Mr. Hester: I agree and I understand what you said. But I still say that it's a perhaps situation. And I would just like to know where we are. If we say

more---

Mr. Baddour: (interposing) You're not going to get an answer to that because nobody will definitely tell you. I mean, you know, we think about this daily in communities like Goldsboro, North Carolina, and you're not going to get a definite answer. They just will not give you the answer that you're asking for. All we can do is the best that we can do.

Mr. Hester: Well, it puts us in a bid against ourselves situation always. I don't like the situation it puts us in, to be honest with you, if we can't come up with any better conclusion than that. If there's a better conclusion, I'd like to have one, if it's out there.

Mr. Holman: I think the Governor's Commission on Military Affairs has identified encroachment on the bases as a major concern and has asked us and the other trust funds and the local governments to help address it. So I think we're trying to be responsive to what they've identified as a priority.

Let me move on and ask Tom Jones to--well, excuse me, that's not the next item. Back to Lisa Schell to give us an update on the annual report.

Ms. Schell: Yes; it is that time again. The annual report is pretty much our primary focus right now. And just to give you an update on where we are, the final copies go into the graphic designer's on Friday. It will be approximately the same length as last year's annual report. It will have a list of all the projects that were approved in the last calendar year and all of the wonderful number crunching that Beth does. Thanks to her for getting all of that stuff to me with great charts that she generates.

We will be highlighting as part of our partnership with local governments the City of Greensboro and its constructive wetlands project, which some of you may have toured when we met in Greensboro in November. Also, we will have a special section on what Clean Water Management Trust Fund is doing vis-à-vis the military base protection issue and we'll be highlighting the City of Goldsboro and Wayne County's efforts there, the H & M Farms and the Weir tracts that we partnered with the Wildlife Resources Commission in protecting and also The Nature Conservancy's Shaken Creek project in the Cape Fear River basin.

As far as highlighting other projects, we sort of do it by category. Acquisitions, we'll be focusing on Lake James and also the Quatenary tract; for stormwater management, City of Wilmington Hewlitt's Creek project; wastewater, the City of Kinston; and for restoration, the Pilot View Resource Conservation and Development's Upper Silas Creek project.

In addition to putting the copy together for this, I've been working with a photographer. I've managed to secure the pro bono services of a professional photographer, Art Howard, who is going to be doing a lot of the photography work for our annual report, and he is one of the best I know. So it should look even nicer than it has in the past.

We've got a few more sheets and we want to knock out a few more photographs that we need. We'll be turning that in to the designers as well, shooting for getting this out by the first part of March. It is all dependent on the graphic designer's workload, however, and also what the printers can do for us, but that's the target.

Mr. Holman: Any questions for Lisa?

Ms. Cragnolin: Lisa, are we going to put this on our web page as well?

Ms. Schell: It would be my goal to do that, yes.

Mr. Holman: And what would be called the pretty version, which would be a lot of the annual report text, will be in my report to the Environmental Review Commission and it will be posted on the web site shortly after I present it.

The next item concerns last fall some of the area soil and water conservation districts passed a resolution calling--about the Conservation Reserve Enhancement Program. In your board packet is a response I prepared in consultation with staff and some of you to that proposed resolution.

I want to say a couple of things: one, I guess the attention on CREP has generated some progress. Also at your place today is a memo we received on January 7th to me from David Fogel regarding CREP title search standards. So I think your push for improved performance is leading to some new thinking by the division on how to speed up the process of easements. So this is, you know--I sent this to you just for information.

I think the other thing, as Chairman Howard alluded, a number of us met including--Mr. Howard and Mr. Smith and Tom and I met with some leaders of the Association of Soil & Water Conservation Districts in December. We had I thought a very productive meeting in December. And then that was followed up with a meeting last Friday where Leland and I represented Clean Water and again met with leaders of the association, members of the division, and also folks from Farm Bureau there, Environmental Defense, and some of the federal agency partners, and the ever present Jim Cummings. And I thought that was also a productive meeting.

Kind of the upshot of it is Grover McPherson, the president of the association, is going to ask his legislative committee to withdraw that proposed resolution on CREP, so the association will not debate CREP at their meeting that's going on right now.

And our kind of working group of Clean Water, association folks, division folks, other interested parties will continue to work on making improvements under the CREP program, and Leland and I will do the best we can to keep you informed about that progress. As you know, one of the projects before you in this spring cycle is an application from the division for addition funding for CREP. So at an appropriate time, you know, that will get put back on your agenda for your review.

Mr. McLean: Bill, what is the CREP amount applied for?

Mr. Holman: The division requested $18 million, $18 plus million.

Mr. Heath: The original request was for $18 million, but that has been pared it down to $8.3, which is one of the three options.

Mr. McLean: Is that this year's request?

Mr. Holman: I think it's safe to say we don't really know what the request is going to be. That's one of the issues we've got to work out before we bring--when we come back to you, it will be--we'll negotiate a specific amount for a specific scope of work. Any questions about that?

(No response.)

Mr. Holman: And if any trustees would like to join Leland or myself in the discussions, we do very much appreciate Mr. Howard, Bill Hollan, and Leroy meeting with us on December 22nd.

Ms. Cragnolin: Bill, I'd just like to say I'd like to thank you and other members of the board of trustees for sort of us keeping us informed with all the memos that went back and forth. I don't think I realized the extent of the disagreement until I started receiving those memos, so I appreciate that because it would have been embarrassing had I bumped into somebody or been called by the media or something and didn't really have an idea of the extent of how we view things differently. Thank you.

Mr. Holman: One of the pieces of informa-tion that kind of got kicked out during these disagreements was one of the requirements we've had for the CREP program is, you know, that some of the sites we monitor and we figure out how well they're working. And the division contracted with N. C. State University to do that work, and actually Environmental Defense was able to get a copy of that evaluation. And Tom, anything you want to add about that? It's in your board packet.

Mr. Jones: Just briefly, in your packet was agenda item H‑10. It's a report. It's a draft report. It's Evaluation for Water Quality Benefits of Conservation Reserve Enhancement Program Sites Selected in North Carolina. It was done in the spring, last spring, and the researchers involved are Dr. Wendell Gilliam, Robert Evans, Deanna Osmond, and Mike Burchell.

Before I move on to this, I'd also like to say that during the last report Trustee Leroy Smith shared with me a resolution that came out of area 6. When I was with Soil & Water, I was the field rep for area 6 which is the southeastern coastal plain. And they have a resolution from that area that was sponsored by the New Hanover district asking for full support, full funding from Clean Water Management Trust Fund.

Mr. McLean: Tom, would you identify who those four persons were or are?

Mr. Jones: Yes, sir. Dr. Wendell Gilliam was with the--he's now retired from the Soils Department and he was the--I guess N. C. State's buffer expert, especially in the formation of the buffer rules for the, Tar, Pamlico, and Neuse River basins.

Robert Evans is a--he's with Bio and Ag Engineering. He's a hydrologist, drainage expert as well as a riparian effectiveness researcher. Deanna Osmond is with N. C. State Soils Department and she basically has taken Linda Blevins' (phonetic) place in that department and has been very helpful in nutrient management and nutrient production research as well as buffer effectiveness. Mike Burchell is with Bio and Ag Engineering and I'm not as familiar with his credentials, although I did get a chance a meet him in the field.

With this, I'd like to give just a brief summary of that effort. They spent about four days in the field. I spent one day with them in the field along with some of the CREP employees as well. I'd like to state right at the outset that this is a draft and overall it's a very negative evaluation of CREP from a water quality perspective. That's all they were looking at is water quality. I think that in some instances there was a difference in perspective of these researchers versus the workings of the program and I'd like to point out what some of those are exactly.

But basically they started out with looking at four or five of what seemed to be the best sites to go out and look at those. And after some what they considered to be alarming observations, they decided to do a statistically significant sampling of the entire program which there were at the time 1200 sites and they looked at 40 sites, 20 older sites and 20 that had some program changes in it.

This graph up here just in general--they went out and visited these 40 sites and gave it a rating of zero to 100, 100 being great and zero being bad. And these are the number of sites that you see and their prospective rankings.

Basically some of the points that they make were--they said that many sites were rated very low because of "their potential ability to improve water quality from agricultural lands above what was occurring before the buffers were established."

And I think--they went on the premise that the programs--one of the number one--the number one standard objective of the program was to reduce the amount of agricultural non-point source pollution entering the water courses of the state. And that's to be done by enrolling up to 100,000 acres of environmentally sensitive crop and pasture land.

Now, one of the things that they looked at was that 59 percent of the sites had an average rating of between zero and 25. This is where--this particular group is where they have a sort of difference in perspective in that this group‑‑many of the members of this group when they were out looking at the sites in terms of establishing an effective riparian buffer between active agricultural land and receiving waters.

What they did not look at per se and what they needed to be looking at more was the effect of removing agricultural land from production and its impact on water quality. And this is some of the things I think they want to go back and do a better evaluation of. For instance, a lot of these sites--they felt that there was a significantly wide natural buffer, 100 feet, between the ag land that they looked at and the stream or ditch.

Now, on the CREP program you can enroll more than 100 feet. And so this does not indicate that this was an improper application of CREP to the program. However, some other things that they looked at, some other causes of the very low rating included "isolated fields being entirely enrolled in CREP with no apparent remaining agricultural nonpoint source." Whether there needs to be one or not is an issue of conflict here.

Also, some sites were located a far distance from a receiving stream. Some sites were located in an inappro-priate landscape position, sites which had surface water diverted around or short-circuited through the buffer. In other words, they had a buffer there, but there were either tie lines or ditches dug through those buffers to where they were no longer really intercepting runoff; also sites that had no nutrient or sediment source. "At several sites the CREP land was pasture some distance from the streams in areas of low erosion which was judged not to be a source of significant agricultural contamination."

Many of the sites with an 26 to 50 range--which is the second bar--that was 28 percent of those surveyed--were not now buffering agricultural land. Whether that's bad or good is something that needs to be discussed here, but that things "appeared to be more of a land conversion from cultivated land to trees than an appropriately located riparian buffer."

Now, here's to me some things to pay attention to. "Only 13 of the sites were given a rating greater than 50. Only one site out of the 40 surveyed was a completely new buffer located immediately riparian to the stream and therefore judged to satisfy the criteria of a 'sensitive' area."

But the basic conclusion, although there are some details to be looked at as to what is or is not necessarily bad, in general the CREP program in this report--their overall opinion of the CREP program--was that it "functioned primarily as a land conversion of some of the least productive agricultural lands to forest with little potential to improve stream water quality. In very few cases has the objective of enrolling 'sensitive' agricultural land been accomplished." Based on this survey, it is their conclusion "that the criteria for site selection and payment rates need further revision if the program is to have a significant impact on improving the water quality in North Carolina."

I would like to stress again that this is a draft report and I believe we need to see some of the conflicts in this report resolved as well. I'll be glad to answer questions if I can.

Mr. L. Smith: I have a question. Why was Environmental Defense involved?

Mr. Holman: Well, that's sort of a complicated story, but the division took the position that the draft report was confidential and so it was Environmental Defense that actually cited the Public Records Act and got a copy. They got a copy before we did.

Ms. Cragnolin: So you're saying it took a Freedom of Information Act request to get a copy of this?

Mr. Holman: Yes. Moving right along--I will say Tom Potter, who of course is here. He comes to a lot of our meetings. And Lee Corum, who is the attorney for CREP, is here. And I think we have had some hard times, but I think we have turned the corner.

And you know, we had a very productive meeting with CREP staff and other parties last Friday. And I think we actually--both the division and the Clean Water staff have benefited from having some other folks in the room and some other ideas. And I think that's a positive. Tom?

Mr. Jones: Just basically this report--I think there was some misunderstanding as to what constituted a final report and what was a draft and what was and was not a public document perhaps. And I think some conflicts between the division and the N. C. State staff as to what this report was supposed to be looking at and how it was--and the perspective involved in it, that they might have felt like the report wasn't finished yet and so it--in defense.

Mr. Holman: And also to let you know, we're paying for the monitoring of this part of the CREP budget, so I believe we are entitled to the information.

A number of our staff in addition--a number of you all serve in voluntary capacities on other committees and specific activities, and I wanted to note that I think probably a little arm twisting from Claudette, but Tom Massie has volunteered to serve on the Wildlife Commission's Non-Game Advisory Committee, and Tom, we appreciate your service and we know you're looking forward to some more trips to Raleigh.

Ms. Weston: Bill, also Jim Cummings--he hasn't gotten his letter yet, but he's the other new addition to the Wildlife Commission.

Mr. Holman: So you twisted his arm too?

Ms. Weston: I did.

Mr. Holman: In your board packet was the 2004 annual report from the Department of Environmental and Natural Resources on th