The Resource Institute, a politically connected nonprofit that received a controversial and unprecedented $5 million appropriation for hurricane recovery in last year’s budget, could lose part of its windfall, according to a bill that passed out of the Senate Rules Committee today.
Sen. Harry Brown, a Republican from Onslow County, last week had amended Senate Bill 95, which contains various appropriations, to redirect $1.6 million of RI’s original funding to North Topsail Beach to help with beach renourishment and hurricane recovery.
North Topsail Beach “already has plans in place,” Brown told his fellow lawmakers on the Rules Committee.
While that is true, Brown’s statement downplayed the disgruntlement of North Topsail town officials over the Resource Institute appropriation, which led them to petition Brown to redirect the money. According to correspondence obtained by Policy Watch under the Public Records Act, North Topsail officials balked at the involvement of RI, which is based in Winston-Salem, for both practical and political reasons.
Emails also show that the group has also been pushing the towns to accept the Atlantic Reef Maker – a wave-attenuating technology – as one of the projects to fund with the appropriation. Atlantic Reef Maker is a spinoff company of one of the RI’s primary contractors, North State Environmental, also based in Winston-Salem.
North Topsail Mayor Dan Tuman conferred with Brown at the Onslow County Republican Convention on March 9, then followed up with a letter on March 13 about “concerns in working with the Resource Institute because of their lack of expertise on oceanfront shoreline protection and their financial demands for their involvement.”
The group is charging a 12 percent administrative fee, worth $600,000, reducing the current total available funds to Pender County to $4.4 million. It is common for the RI to charge a fee, often 10 percent, for its services or more for projects it deems complex. Although the group doesn’t do the actual design or construction, it hires the contractors and coordinates permitting, invoicing and paperwork.
According to the emails, Tuman told Brown that the Topsail Island Shoreline Protection Commission “would have been a better choice for the legislature for dispensing Hurricane Florence funds … They certainly have more expertise, available resources and knowledge in this matter.”
The $5 million for the RI was included in last year’s budget, which passed in June. An investigative story published by Policy Watch shortly after the budget bill passed showed that Resource Institute officials has made numerous campaign contribution to key lawmakers prior to the appropriation being awarded to the group. The original language called for RI to use the funds to study “emerging technologies” for beach nourishment.
Mayor Tuman wrote to Brown last summer questioning the appropriation. “Please have Tom Reeder [policy adviser to Sen. Phil Berger] call me so I can better understand why the Resource Institute was selected,” Tuman wrote to Brown last summer.
After Hurricane Florence devastated the coast, particularly Topsail Island, a subsequent disaster relief bill narrowed the geographic scope of the RI’s beach study projects to Pender County. North Topsail is in Onslow County, while Surf City is split between Onslow and Pender.
In comparison, Carteret County, aided by its representative, Pat McElraft, received $5 million in direct appropriations for hurricane recovery.
RI Board Chairman Michael “Squeak” Smith told Policy Watch by email that “the potential reallocation of funds will not change our plans for the island.”
For the past several months, the Resource Institute has been convening a task force composed of its own officials and town appointees to rank and select projects for funding. But the task force itself has been a source of disagreement because, to North Topsail officials at least, it seems like another bureaucratic layer delaying essential repairs to the beach – especially prior to the beginning of tourist and hurricane seasons.
“[The task force] appears to be nothing more than a way for the Resource Institute to justify their administrative fee,” wrote North Topsail Alderman Tom Leonard last January. “Resource Institute just needs to provide the funds to the towns and step away.”
Throughout the project selection process, Resource Institute officials have been hard-selling the towns on the Atlantic Reef Maker, according to North Topsail documents, even over the towns’ own project preferences.
The town wants to truck in sand to rebuild the beach in the short-term, over the objections of Resource Institute President Charles Anderson, who reportedly said the sand wouldn’t last. And RI had omitted from the project ranking sheet one of North Topsail’s preferred shoreline protection methods, a terminal groin. (These hardened structures are also controversial and subject to strict permitting.)
“Since RI is determined to manage this effort,” Tuman wrote, sounding exasperated, “no Reef Maker please.”
Smith of RI told Policy Watch that the Reef Maker is no longer under consideration by the task force.
North Topsail Mayor Tuman’s primary concerns about RI’s involvement are technical, but in his March 13 letter to Sen. Brown, he also disparaged the North Carolina Coastal Federation, which is coordinating with RI on the projects. “The Coastal Fed is involved in environmental politics and has worked actively to oppose terminal groin projects,” Tuman wrote.
The Coastal Federation has sued over proposed terminal groins on Ocean Isle. That litigation has prompted new federal requirements for the structures and stalled North Topsail’s own terminal groin project.
“This organization and its members have traditionally supported Democratic Party policies and candidates,” Tuman went on. “This is yet another reason for asking for your help.”
Read more about the Resource Institute
The Resource Institute was also the subject of a damning report released earlier this month by the Legislature’s Program Evaluation Division. Among other findings, the PED determined the group had sent 51 duplicate invoices to the NC Department of Environmental Quality and the Clean Water Management Trust Fund for payment on stream restoration projects in the western part of the state.