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UNC School of Government Study of EEP: Solid as Banana Cream Pie

UNC School of Government Study of EEP: Solid as Banana Cream Pie

This past Friday the UNC School of Government released its “Phase 1 Report” on evaluating the Ecosystem Enhancement Program’s method for procuring its mitigation.

As all long suffering followers of the inner workings of the ‘black box’ known simply as EEP understand, there are two separate processes for this: 1) a competitive bid system known as Full Delivery in which the provider assumes all liability for delivering the contracted amount of mitigation without an any change order provisions and is fully bonded, and 2) an arbitrarily awarded design contract (not competitive bid) for projects from a list of ‘on-call’ design firms which is then subsequently farmed out to bid for only the construction component known as Design Bid Build.

One would have assumed that UNC would have actually looked into the mechanics of these two methods and drawn some conclusions or at least made some salient observations. Oh wait, if that’s what was done then there would actually be something useful coming from this process. Instead, all that UNC did is establish a set of criteria for how to evaluate the two methods and with apologies to my friends at UNC—a third grader could have come up with the two main ones: effectiveness and transparency. The SOG work so far has been analogous to a round table discussion of the shade of black on the side of the box, with little discussion of what’s inside and why nobody gets to see it.

Was it really necessary to engage dozens of stakeholders in the process to come up with those revelations? Can you say ‘pass the butter knife so I can cut the banana cream pie’?

As one of those stakeholders who falls under the category in the study of “Mitigation Provider” i.e. one who actually does this work and has been well acquainted with both EEP and its DENR management since before the 2003 start of the program, let me add one point of clarification to the second sentence of the second paragraph on page 1 of the study which reads “DENR’s new leadership identified a need to have an objective third party review EEP’s procurement process.” WHOA!

There is an elephant in the room here and it needs to be acknowledged. The Assistant Secretary of DENR ever since the EEP has existed, Robin Smith, is married to Mike Smith the head of UNC’s School of Government. Now, both

and Smith are well regarded in their respective capacities and I am not trying to imply any cronyism was at play in the decision for DENR to give UNC the $25,000 contract for this study. After all, if DENR had wanted to bring in Bain Consulting to perform a thorough top to bottom review of the EEP, as UNC did when it had Bain study its layers of overlapping university bureaucracy, it would have cost a heck of a lot more than $25k.

However, I am disappointed that the study offered no disclaimer to this obvious reality which was discussed by several stakeholders outside of the series of meetings. It does neither institution any favors when even the appearance of a potential conflict of interest is involved, especially so when it is not duly acknowledged in an allegedly “transparent” process.

The one clear take away result from the study is that what is likely to come next—you guessed it, is another study! One can only hope that the Phase 2 Report actually comes up with real analysis and recommendations.

If not then we ‘stakeholders’ better be prepared for more banana cream pie. One can only wonder what the budget is for another serving of the same mush?

BrassGrill

Confab: Yet another huddle on the fate of the NCEEP

If I had a dollar for every stakeholder meeting, facilitated discussion, working group, and RFP modification effort I have attended in the last decade concerning the North Carolina mitigation fee program — I could pay for a robust lunch and still have some jingle in my pocket. In fact, I keep a box of magic markers on my desk at all times in order to be prepared for these tedious sessions and their inevitable chart-fliping diagrams of the problems.

A facilitated discussion

Once again, a seeeerious evaluation is being made by the wetland policy industry of the North Carolina Ecosystem Enhancement Program.  In this case it is the respected UNC School of Government (SOG) sitting us down to see if we can all just get along.  The ultimate goal is, I fear, to find some political method for justifying the out-of-control, nobody-on-Jones-street-authorized-it, mistake-prone, developer-facilitating, government-price-fixing expensive mess that is the NCEEP.

How about this for an idea taken from the National Environmental Policy Act:  The “No-Build” alternative.

It is time to wind it down.  It is time for “No-Build.” Somehow, 49 other states struggle through the day without subsidizing their developers with a state-wide-pay-and-pave-program.  The North Carolina monstrosity was concocted in 2002 only to sweep a previous scandal concerning the NC Wetland Restoration Program (NCWRP) under the rug with a new name and more money.  Tar Heels would not miss it.   (Unless, of course, you were seeking a subsidized permit to dredge and fill wetlands.)

Yet, I wonder.  Is the “No-Build” alternative even in the SOG’s play book?  The SOG, I understand, had a hand in developing the NCWRP [WRONGMea Culpa], the first iteration of fee-based mitigation in North Carolina. And the SOG is certainly not the School of less Government.  Is it possible for the SOG to simply do the right thing and recommend that the state back-out of the business of providing developers with compensatory mitigation at fixed prices?   Or will we once more trod down the well-worn path of “reform” without substance and meetings without results.  I am keeping an open-mind, but I am not encouraged based on my years of experience.

In the meantime, here is a preview of tomorrow’s gathering lifted from the quite cool NC Water Wiki sponsored by the SOG. One of the other invitees posed a few questions to our host :

In the meantime, here are some similar questions from another potential participant and my answers –

Maureen,
Thank you for the invitation to participate in the SOG Evaluation of the EEP.  In discussing this process with colleagues, some questions have arisen.  Based upon the stated goal of the project: “an independent analysis of EEP’s procurement methods,” the range of topics covered is not clear.
Q:  Can you provide more detail?
A:  The School of Government has been asked to evaluate the EEP’s procurement methods.  I am overseeing the evaluation from the position of evaluation methodology and research methods expertise.  Paul Caldwell, a SOG project director, runs the nuts and bolts of our evaluation projects – he will be the main contact for day to day activities.  Bill Holman and Richard Whisnant are colleagues who are content experts, and they will help facilitate the process, especially the technical conversations.
The word independent is to emphasize that the SOG will be conducting the evaluation in a transparent, neutral fashion, without any preconceptions about the program.  In fact, I have taken steps to avoid even reading about controversy about the program (though I know something is there) so that I can ask as un-biased, methodologically sound questions as possible.

Something Fishy

Red Herring?

Last Thursday representatives of the North Carolina Division of Water Quality (DWQ) concluded an overview presentation of their mitigation programs to the Environmental Management Commission in defense of credit stacking by expressing a red herring message of fear that without the ability to sell the same piece of mitigation twice,

mitigation costs will be higher

— NCDWQ

and that some areas of the state could

run out of buffer and stream sites

— NCDWQ

to restore??

I’m confused.  DWQ just threw away several hundred thousand dollars and caused an immediate and future degradation to water quality and they’re concerned that correcting the policy that led to this might cause mitigation fees to go up?!  That’s almost as ridiculous as their implication that running out of degraded streams and buffers would somehow be a bad thing.

The tone of these comments by DWQ staff force a reasonable person to ask:  is DENR more concerned with subsidizing the cost of development at the expense of the environment than actually protecting the environment? A skeptic would ask if DENR management is more concerned with protecting it’s empire of programs and divisions than the environment.  And a cynic would merely point out that the Endless Employment Project and the Ecosystem Enhancement Program share the same acronym.

Thursday’s presentation was given at the bequest of EMC Chair Stephen Smith in response to the recent publicity regarding DENR, DWQ, EEP, and EBX that questioned whether roughly a million dollars of mitigation fees required by DWQ, collected by EEP, and awarded to  EBX actually did anything to protect the environment.  According to the NC Program Evaluation Division the answer to that question is clear,

DWQ’s decisions related to this controversy resulted in actual and potential future losses to the environmental integrity of the Neuse River basin. — Program Evaluation Division, NC General Assembly

What’s not so clear is why DENR’s been making policy decisions that degrade the environment as opposed to protect it.  Their public explanations thus far have been premised as simplified versions of complicated issues.  The EMC rule makers need to understand that DENR’s not telling them the whole story.  The most notable omission is that EEP has been charging mitigation fees to developers based on the costs of providing unstacked mitigation credits, their nutrient offset program was at a huge deficit of  compliance,  and they seem to have used retroactive credit stacking, shielded by a process called  “direct purchase” to help balance their books.

It’s time for DENR to stop treating everyone from policy makers to legislators like children and start telling the whole story.   A good place to start would be explaining why DWQ Buffer Interpretation/Clarification #004 was written, and whether it was intended to help every public and private mitigation project that has subsequently taken advantage of it, or just the needs of a certain Canadian mining company.   The first step to recovery is admitting that you have a problem.  Everybody makes mistakes, what’s important is that we learn from them.

Trying to get around all this monkey business, and as a bit of a Curious George myself,  I went to the Man in the Yellow Hat (an industry veteran) who reminded me that at its root, DWQ was a permitting agency.  This DWQ summary, and the Rationale and Methodology for Flexible Buffer Mitigation for PCS Phosphate Company, Inc. help explain the connection between the proposed Consolidated Buffer Rule, the 800 pound gorilla sitting silently at the back of all these public policy meetings, and DENR’s hesitancy to correct their mistake.

PCS Phosphate is currently pursuing a permit to make what could be the largest single impact to water quality in the state of North Carolina and they’re using the Consolidated Buffer Rule to help do it.  But DWQ’s most recent version of the Rule was not only a fix for PCS, but also a fix for DENR’s recently publicized policy problems.  Lucky for the environment, it has been temporarily tabled.  Maybe next time it’s presented they’ll stop monkeying around and call it what it is, The Rule to Help PCS Get Its Permit and Help DWQ Cover Its Ass.  Just goes to show that the Man in the Yellow Hat knows what he’s talking about, at its root DWQ is a permitting agency.

However, this still doesn’t help explain the DENR Assistant Secretary’s response when asked by members of the ERC on December 17th if the recent controversial policy decisions by her department had any impact on PCS, because she appeared to have no idea that there was a connection.  That’s a little ironic, considering she has served as legal counsel to the state’s mining commission, the Southern Environmental Law Center is currently challenging the PCS permit and DWQ has been working for several years on a new Rule to help PCS meet their buffer mitigation requirement.

Maybe she didn’t get the MEMOs, or like Peter Gibbons in Office Space maybe she just ignored them.  When I recently heard DENR had engaged the UNC School of Government to do an ‘outside, third party’ review of EEP and its practices I was encouraged.  But then I heard that the Dean of the School was married to the DENR Assistant Secretary. Sheesh.

The real world ain’t like  school and it ain’t like the movies, and sometimes it makes me sick.  As historian Howard Zinn’s book demonstrates in both title and text, You Can’t be Neutral on a Moving Train.   Letters and MEMOs are important and policy decisions have real and immediate consequences that can’t be brushed over by studies and simplified examples.

For the time being it’s looking more and more like the dead fish in the Neuse aren’t the only thing putrid effecting our waters.  In case they missed the other ones, I hope the DENR hierarchy gets this most recent memo from concerned advocates and this time decides to do something good for the environment.

SwampGate: Purchasing nutrients from a wetland bank prohibited by EEP's own rules

As an informational update on the brewing controversy concerning the state paying twice for work done once, “Stories from the Field” offers a snippet from the EEP‘s own rule book.  The rule specifically and unequivocally prohibits the dual use of a single mitigation site for wetland and nutrient mitigation, as was done at least once by a private contractor, and perhaps many times by the rule maker themselves:

Ecosystem Enhancement Program:
“Policies, Process, and Procedures Manual,” May 4, 2008

2.0 DEFINITIONS AND PROJECT REQUIREMENTS TO GENERATE RIPARIAN BUFFER MITIGATION CREDITS.

2.9 Wetland and Buffer Mitigation. Wetland mitigation may not overlap with riparian buffer mitigation. When wetland mitigation is implemented in a riparian zone using buffer restoration techniques that could also generate riparian buffer mitigation, a decision must be made as to which type of credit will be claimed from the project. A specific area on a project can generate either wetland mitigation credits or riparian buffer mitigation credits. Portions of a project can be designated as generating riparian buffer mitigation credits and portions generating wetland credit, but these areas cannot overlap.

2.10 Nutrient Offset and Buffer Mitigation. Nutrient offset mitigation is required to be stand alone mitigation in order to generate nutrient offset mitigation. Any area being used for nutrient offset mitigation cannot be used to generate stream, wetland, or buffer mitigation credits. Similarly any area being used to generate riparian buffer mitigation credits cannot be used to generate nutrient offset mitigation.

SwampGate: News and Observer busts EBX for hitting the punch bowl twice

Quite a find on my porch this morning. The state’s paper of record revealed a long-stewing controversy in the obscure but important world of compensatory environmental mitigation policy.  [EBX paid twice for wetlands work, December 8, 2009]  RS’ principal competitor, Environmental Bank and Exchange (EBX), sold nutrient mitigation credits to the North Carolina Ecosystem Enhancement Program subsequent to the site being banked, restored and previously paid for by the North Carolina Department of Transportation for wetland mitigation credit.  In industry parlance —  we call this a “double-dip.”

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