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A North Carolina nonprofit with deep political connections received $5 million in the state budget for a beach nourishment study and design project, even though it has never done that type of work and is headquartered more than 250 miles from the coast.
Lawmakers appropriated the funding to the Resource Institute, based in Winston-Salem, through a one-time “grant-in-aid” – pass-through money – from the state Division of Water Resources. The amount is the largest grant-in-aid from the Department of Environmental Quality since at least 2005, according to state budget documents.
Yet, DEQ said it did not request the earmark; in fact, lawmakers appropriated just $1.8 million to DEQ to conduct its own work related to GenX and emerging contaminants.
The budget language vaguely describes the purpose of the appropriation. Armed with the windfall, the Resource Institute “shall work with coastal local governments and engineering firms to explore opportunities for the development and implementation of emerging techniques that can extend the useful life of beach nourishment projects.”
The legislation requires no monitoring or oversight by the Division of Water Resources, Division of Coastal Management, the Coastal Resources Commission or its science panel. Instead, the nonprofit must only deliver a report on its findings by Oct. 1, 2019, to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources and the Fiscal Research Division.
The unusual appropriation and the unknown motives behind it have raised questions among several coastal scientists. Rudi Rudolph, the Carteret County shore protection manager, also leads the state Coastal Resources Advisory Commission. He sits on its science panel and has been working on coastal issues in North Carolina since 2001. “I’ve never heard of these people,” Rudolph said, referring to the Institute. “I’ve never seen them at a meeting or see that they’ve done a project on the coast.”
While preserving North Carolina’s beaches is key for the state’s environment and economy, it’s curious why this ill-defined project is considered a prudent use of public tax dollars. Legislatively mandated studies recently have been conducted about beach nourishment, which entails rebuilding and contouring the beach with new sand to temporarily stall erosion.
Both the 2011 Beach Inlet and Management Plan and a 2016 update, which together total more than 500 pages, strongly recommend lawmakers establish a dedicated state beach nourishment fund. They have failed to do so.
“I’m very confused by the language,” said Rob Young, director of the Program for the Study of Developed Shorelines, a joint project of Duke University and Western Carolina University. “I’ll be interested to see if beach nourishment is really the ultimate plan.”
*****T he Resource Institute is led by Charles Anderson, who is a realtor and a power broker with a soil science degree. The nonprofit shares an office building in northwest Winston-Salem with another nonprofit, Pilot View RC&D. The two groups also share several board members; Debbie Dodson, affiliated with both groups, also works with Anderson in real estate. A third nonprofit, Enviro Impact, had board members in common, but the group no longer appears to be doing substantial work.
Anderson did not return repeated calls and emails seeking an interview.
The organization contracts with engineering firms to do the project work, most of it in western North Carolina with money from the Clean Water Management Trust Fund (CWMTF). Since 2003, the institute and Pilot View have received nearly $20 million in CWMTF money, primarily for stream restoration projects in western North Carolina.
A CWMTF official told Policy Watch that its field staff, of which there are two for the entire state, have reported that the projects were “constructed as specified in the contract and generally are functioning well.”
What distinguishes the CWMTF money from the state appropriation, though, is that the former is a competitive grant process in which groups rarely get everything they ask for. The earmark to the Resource Institute was a gift.
The Resource Institute generates most of its revenue from government grants. In its federal tax documents, the Institute reported revenue of $5 million in 2016, most of it from “public support” – tax dollars or occasionally, donations in the form of conservation easements.
Among the Resource Institute’s main contractors is North State Environmental in Winston-Salem, which 18 months ago spun off a new company, Atlantic Reef Maker. That enterprise specializes in wave energy dissipaters, a technology used in the Gulf of Mexico to thwart shoreline erosion – and one that, as the budget language says, seems to fit the description of an “emerging technique that can extend the useful life of beach nourishment projects.”
Darrell Westmoreland is the CEO of North State Environmental and the vice president and founder of Atlantic Reef Maker. “We’re one of many engineering firms and contractors on their on-call list,” Westmoreland said, adding the firm doesn’t know if it will be chosen to work on the project.
The Resource Institute, Westmoreland said, has been interested in expanding its restoration work into eastern North Carolina. “Charles isn’t going to waste the money,” Westmoreland said of the appropriation. “He’s a very passionate person about the environment and the waters of North Carolina.”
Although the Resource Institute and Pilot View are relatively unknown to many members of the environmental community, they are well-acquainted with powerful current and former state lawmakers.
Since 2016, board members and principals of the Institute, as well as several of its contractors, have contributed $84,000* to House and Senate leadership and Republican lawmakers key to their interests, including Rep. Kyle Hall and Sen. Bill Rabon, according to campaign finance records. (*Update: After another pass at the campaign finance database, the total is now $116,000.)
Former State Rep. Bryan Holloway, who represented Stokes and Rockingham counties from 2004 to 2015, is the registered lobbyist for the Resource Institute. He did not return emails seeking comment.
Hall replaced Holloway in the House. He sits on the Appropriations Committee and the Joint Oversight Committee on Agriculture and Natural and Economic Resources – the group that will receive Resource Institute’s beach re-nourishment report. And of the four counties Rabon represents, three of them are along the coast: Brunswick, Pender and part of New Hanover.
The timing of the campaign contributions is also notable. Westmoreland founded and incorporated Atlantic Reef Maker in May 2016, according to Secretary of State records. That’s when the campaign contributions started pouring in: from Anderson, Resource Institute board chairman Michael “Squeak” Smith, Westmoreland, and his wife, Stephanie, who also is president of North State Environmental.
According to campaign finance records, none of these contributors had donated to state lawmakers or candidates before.
“People can come up with their own interpretation,” Westmoreland said. “There’s politics involved in everything these days. We support candidates that are supporting things we want to do. These projects are good for the environment.
“I’ve been an environmentalist all my life,” he went on. “This is not a pay-to-play program. That’s not what I’m in it for.”
North Carolina has 320 miles of ocean beaches, more than 12,000 miles of estuarine shoreline and another two-million acres of sounds, creeks and marshes. All of them are at risk of erosion.
Not only does beach erosion threaten homes and businesses – some of them built years ago, under weaker setback rules – but also the state’s $3 billion annual tourism industry. Most of the 12 million people who visit the coast each year want to spend time at the beach. And they want a wide beach, with pristine sand as soft as crushed velvet. Add in fishers, boaters and ship captains whose livelihoods depend on clear sounds and inlets, and the importance of healthy shorelines can’t be overstated.
Nonetheless, chronic battering from ocean waves, sea level rise and severe storms erode the beaches. Even 50 years ago, in the mid-1960s, the US Army Corps of Engineers tried to combat the erosion by launching the first nourishment projects on Carolina and Wrightsville beaches. Since then, coastal engineers have used several restoration methods, usually pumping sand onto a length of the shoreline.
“Beach nourishment is not rocket science,” said Spencer Rogers, a coastal construction and erosion specialist at NC Sea Grant. “It’s adding sand.”
That is true, but as Rogers explained, how, when and where the sand is added depends on a complex interplay of elevation, location, economics, erosion rates and climate. For example, it’s important to match, as closely as possible, the size of the grain and the type of sand to re-create a beach’s natural condition. Local variability also influences erosion rates. Northeast-facing beaches, like those on the Outer Banks, are pummeled more frequently by winter storms and hurricanes than their southeast-facing counterparts.
There are several environmental and economic drawbacks to beach nourishment, as well. Done improperly, it can damage coastal habitats, killing sea turtles and smothering their eggs, and harming crabs and other aquatic life that depend on the shoreline. Even when the sand is carefully replenished, frequent re-nourishment interferes with organisms’ recovery times, according to a 2016 state Coastal Erosion report to the legislature.
Hurricanes obviously wash away sand, but the more insidious threat to the beach is chronic erosion from waves and wakes. The median erosion rate for North Carolina beaches is about one foot per year, according to the Division of Coastal Management. However, erosion along the inlets, where waves and tidal currents batter the shoreline, occurs at a rate five times faster – at least five feet annually.
Rogers said a typical maintenance cycle is three to four years, but that depends on erosion rates. Rudi Rudolph said that in Carteret County, the beaches are re-nourished about once every 10 years.
“Beach nourishment is not a cure for beach erosion,” Rogers said. “It’s a treatment.”
The treatment is very expensive, with the costs escalating the more frequently it must be done. According to the state’s 2016 Beach and Inlet Management Plan, coastal counties conducted 298 beach nourishment projects from 1955 to 2015. Those projects, which can include navigation projects, used 128 million cubic yards of sand and extended for 283 miles, at a cost of $907 million. About two-thirds of the cost was covered by the federal government, with the other third paid for by state and local entities.
But over time, the federal government has cut funding for these projects, leaving more of the financial burden on the state and counties. From 2010 to 2015, for example, the state picked up nearly half of the costs of beach nourishment, about $138 million. Counties have adopted various taxes – sales, occupancy, real estate transfer – to help pay for their beaches’ upkeep.
Since at least 2011, the legislature has received several reports – reports it has mandated and funded – urging lawmakers to establish a dedicated beach nourishment fund. The most recent document, the Beach and Inlet Management Plan, issued in November 2016, said coastal counties need “predictable funding sources” for their beach and inlet projects — a total of $25 million each year.
Since 2012, lawmakers have piecemealed $8.5 million for nourishment projects at four beaches: Wrightsville, Carolina, Kure and Ocean Isle. Over the last five years, according to DEQ, the state appropriated another million dollars for a project at North Topsail Beach. That project is still in the planning stages and no funds have been spent.
To put these amounts in perspective, the Institute’s appropriation for a single, one-year study, equals roughly half the total allocated for those five local projects.
Last year, lawmakers set up a Coastal Damage Mitigation Fund, but in words only. This year, the fund received $5 million in one-time money in a transfer from the Department of Commerce. The only other money for beach nourishment went to the Institute.
Although the project is not defined in the appropriation language, Westmoreland said the Resource Institute is looking at stabilizing the New River Inlet. Sand from North Topsail Beach flows into and clogs the S-shaped inlet, making it hazardous for boats, which can get mired in the river bottom. Westmoreland said the Institute would work with the Department of Defense to address environmental issues related to ships traveling on the river from Camp Lejeune.
While it’s not guaranteed, the “Atlantic ReefMaker” artificial reef appears to be a likely candidate for this endeavor. The ReefMaker is composed of concrete molded trays set with natural rock material, such as granite, according to the Atlantic Reefmaker website. These trays — stacked erosion control units — are constructed on fiberglass pilings that are installed on the sea floor or riverbed. The design breaks up the wave energy while allowing water, fish, sand and other aquatic life to pass through the structure. The Reefmakers can also serve as artificial shorelines for oysters.
Atlantic ReefMaker installed a project on the Oregon Inlet that was funded by the state Department of Transportation. The goal of that project, said Kathy Herring, an environmental program supervisor at NCDOT, was to create habitats for seagrass and the aquatic life that rely on the underwater plants. The cost was $400,000, said Westmoreland, not including installation.
The project was completed in February 2017, Herring said, and will be monitored for four years.
A second Atlantic ReefMaker project was launched at Fort Anderson on the Cape Fear River, under the auspices of the Department of Natural and Cultural Resources. Heavy wakes from ships traveling to the Port of Wilmington, had eroded historic structures and threatened relics from the Revolutionary War and Civil War eras. The project is currently in Phase II. Westmoreland said UNC Wilmington is monitoring its effectiveness.
While this might sound promising, ReefMakers have been tried only inland, on rivers and estuaries in North Carolina. The Coastal Management Act passed a rule prohibiting hardened erosion control structures from the oceanside in 1985, which was strengthened by 2003 legislation outlawing them entirely.
With that check in place, it’s difficult to understand the nature of the institute’s project, including the ReefMaker. “I don’t see that helping anybody on the oceanfront,” said Layton Bedsole, the New Hanover County shoreline protection coordinator, of the Atlantic ReefMaker.” I don’t see New Hanover County participating.”
Westmoreland said he would like to see someone sponsor a pilot study of the ReefMakers offshore, out of view of beachgoers. “We need legislators to do this,” he acknowledged.
The ReefMaker could be used with a terminal groin, a wood, concrete, stone or steel structure that runs perpendicular to the beach. State law allows only six terminal groins to be installed along the coast, in tandem with beach nourishment projects. But Rogers of NC Sea Grant reviewed the Atlantic ReefMaker website and said he thinks the structures are too porous to be effective at stopping beach erosion.
Even if the ReefMaker is part of the project paid for in the budget, Rob Young of Western Carolina University said it’s “impossible” to document its effectiveness within a year, when the report is due to the legislature. “It’s not enough time,” he said.
“The state has a wonderful body, the coastal science panel, made up of engineers and scientists with tremendous experience,” Young said. “Rather than throw $5 million at this and see what happens, the legislature should go to them and say, ‘will this work?’”