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					          Board of Trustees
 Clean Water Management Trust Fund




         Minutes of Meeting
             Open Session


      Monday, August 13, 2007




        North Raleigh Hilton

       3415 Wake Forest Road

  Raleigh, North Carolina          27609

                9:05 A.M.




Garrett Reporting Service
   Professional Stenomask For The Record
           Post Office Box 98475
    Raleigh, North Carolina 27624-8475
    (919) 676-1502 – Facsimile 676-2277
CWMTF Board Meeting                      8/13/2007            Page    2


                                     APPEARANCES



       Phil Baddour

       Ron Beane

       Yevonne Brannon

       Norman Camp

       Karen Cragnolin

       John Crumpler

       Bill Hollan

       Robert Howard

       Charles Johnson

       Kevin Markham

       Chuck McGrady

       John McMillan

       Peter Rascoe

       Stan Vaughan

       Claudette Weston

       Jerry Wright



                          APPEARANCES OF STAFF MEMBERS

       Tom Jones

       Richard Rogers

       Lisa Schell

       Beth McGee

       Gina Daniel


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       Larry Horton

       Nancy Guthrie

       Kevin Boyer

       Sarah King

       Damon Tatem

       Bern Schumak

       Tom Massie



               Also present:

       Frank Crawley, Esq.




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                                      AGENDA

9:00 am        A. Call to Order – Chairman Baddour
               1) Welcome
               2) Roll Call – Gina Daniel
               3) Compliance with General Statute § 138A-15
               4) Revisions, additions, and adoption of the Agenda (Action Item)
               5) Please put cell phones on vibrate or off
               6) Review and approval of the transcripts of the June 2007 meeting of
                   the Board of Trustees (Action Item) (Previously mailed on July 5,
                   2007)
               7) Recognize CWMTF Advisory Committee Members
               8) Trustee appointments and reappointments
               9) Standing Committee assignments
               10) Locations of September and October Board meetings revised –
                   Sept. meeting in Alamance County; Oct. meeting in McDowell
                   County
               11) Draft 2008 Board meeting schedule (Potential Action Item)
               12) Raleigh office space needs

9:25 am        B. Public Comments (Three Minutes Per Person) – Chairman
               Baddour

9:35 am        C. Consent Agenda Items – Chairman Baddour
               1) Accept withdrawal of Application No. 2006B-607 from
                  Powellsville. Powellsville has submitted a new application (No.
                  2007-616) for this project and wishes to withdraw its earlier
                  application.
               2) Accept withdrawal of Application No. 2007-702 from City of
                  Albemarle.
               3) Accept withdrawal of Application No. 2007-811 from Town of
                  Mount Pleasant.
               4) Accept canceling of Project No. 2005D-018 from Lumber River
                  Conservancy. In Feb. 2006, the Board approved this donated
                  mini-grant of up to $3,800. LRC wrote CWMTF on June 6, 2007 to
                  request that this grant agreement be canceled.
               5) Accept canceling of Project No. 2005A-010 from The Nature
                  Conservancy. In August 2005, the Board approved this grant of
                  up to $475,000. TNC wrote CWMTF on July 23, 2007 to request
                  that this grant agreement be canceled.
               6) Proposed Consent Agenda Item from August 12, 2007
                  Restoration/Stormwater Committee Agenda – Project No.
                  2006S-005 – Town of Kure Beach Stormwater Mini-grant. See


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                   information on the Restoration/Stormwater Committee Agenda
                   Item H-B.

9:40 am        D. Executive Director’s Report – Richard Rogers
               1) CWMTF FY 2007-2008 Appropriation
               2) Recent Legislation affecting CWMTF
                    SL 2007-185 (HB 1370) – To Clarify that High Unit Cost
                      Threshold Does Not Apply to CWMTF Wastewater Planning
                      and Technical Assistance Grants
                    SB 1468 – To Promote Innovative Stormwater Management
                      and Water Quality Protection Efforts
               3) Agricultural Development and Farmland Preservation Trust Fund
                   ($8 million)
               4) Land for Tomorrow and Waterfront Access and Marine Industry
                   Fund COPs Funding ($120 million)
               5) Funds for Local Government Water & Sewer Improvement Grants
                   ($100 million)
               6) Grant contract status update
               7) Personnel update
               8) FY 2007-2008 Administrative budget development
               9) FY 2006-2007 Administrative budget status – Francine Durso
               10) Communications report and Trustee presentation – Lisa Schell

10:15 am       E. Attorney General’s Report – Frank Crawley

10:25 am       F. Break

10:45 am       G. NC State University’s Update on Existing CWMTF Projects:
               Monitoring Restoration, Urban Stormwater and Best Management
               Practices Projects – Barbara Doll, NC State University, NC Sea
               Grant (Information Item)

               In May 2005, the Board of Trustees approved entering into a contract
               with NC State University to establish a monitoring program to be
               conducted on a subset of the CWMTF’s stream restoration,
               stormwater and agricultural BMP projects, including an evaluation of
               some existing projects and more comprehensive monitoring on some
               recently funded projects. Preliminary information was presented to
               the Restoration/ Stormwater Committee in October 2006. This
               presentation will update the Board. See
               http://www5.bae.ncsu.edu/bae/programs/extension/wqg/sri/cwmtf/inde
               x.html to read a short summary of the monitoring approach and to
               view a photographic log of the existing projects visited in 2006 as part
               of the monitoring contract.



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11:10 am       H. Restoration/Stormwater Committee Report – Committee Co-
               Chairs Brannon and Hester (Action Items)

11:45 am       I. Wastewater/Infrastructure Committee Report – Committee Co-
               Chairs Johnson and Crumpler (Action Items)

12:00 pm       J. CREP Committee Report – Committee Chair Ron Beane
               (Information and/or Action Items)

               The CREP Committee met with NC Division of Soil and Water staff
               and CWMTF staff on July 19 to discuss project progress and will
               update the Board.

12:15 pm       K. Grant Criteria Committee Report – Committee Co-Chairs
               Hollan and Markham (Potential Action Items)

12:45 pm       L. Legal Committee Report – Committee Chair McGrady

1:00 pm        M. Discussion

1:15 pm        N. Adjourn




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1                   P R O C E E D I N G S                    9:05 A.M.

2                           Chairman Baddour:        I would like to call the

3           meeting to order and welcome everyone.              And before

4           anything else, I want to make a few announcements.

5           We’re going to acknowledge the 50th anniversary of

6           Rance and Betty Henderson.          And I don’t think he’s

7           here, right?          We’ll acknowledge the 25th anniversary of

8           Joe and Betsy Hester, and I don’t think Joe is here.

9           And we’re going to acknowledge the birthday of

10          Claudette Weston, and she’s here.            I don’t know how

11          old she is, but I know how young she acts.              And if you

12          think that shirt over there is funny, you should see

13          the one that I have with her in her pink bikini.

14                          Ms. Weston:       True story.

15                          Chairman Baddour:        True story.    True story.

16                          Ms. Cragnolin: Is that Chairman’s privilege?

17                          Ms. Weston:       Yes.

18                          Chairman Baddour:        The Chairman’s

19          privilege.

20                          Ms. Weston:       He paid dearly for it.

21                          Chairman Baddour:        Okay.    This is a

22          historic date not only for the birthdays and

23          anniversaries.           But as Chairman of this Board, I am

24          very proud to welcome Richard Rogers to his first

25          meeting as our Executive Director.               Richard, we just


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1           are so delighted to have you on board.              We went

2           through a search process and ended up with someone who

3           is very familiar to us, and you’re very familiar.                 And

4           kind of what the word on the street is that your

5           learning curve is pretty darn flat.              And I can report

6           to all of you that the staff, the public, the General

7           Assembly has all been very pleased with our decision,

8           and Richard is off and running.              So, we’re glad to

9           have you with us.

10                          And second of all, and this is I guess

11          bittersweet.          But y'all have -- Sweet because we’re

12          happy for her and we’re sad for us, but Francine Durso

13          has announced that she is going to retire at the end

14          of this month.           And, you know, I was kind of thinking

15          about what to say about you, Francine.              And there may

16          be some others who want to say something.              But it

17          seems to me that you are -- You remind me of the eye

18          of a hurricane.               You are right in the middle of it,

19          but you are always just as calm and cool as you can

20          be.     So, you’re the calm.            Don’t you call the eye of

21          the hurricane “the calm,” too?

22                          But I tell you, with all of her integrity,

23          her loyalty, her steady hand, her hard work, you have

24          been a wonderful part of our program.              And you have

25          made such significant contributions to this program


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1           and to the state of North Carolina.          We’re just all so

2           very, very grateful to you.         And I have a few things

3           on behalf of the Board to give you.          So why don’t you

4           -- We’ll stand up for this.         It will be a little

5           formal.

6                           This is to Francine Durso in appreciation

7           for her outstanding leadership and service to protect

8           and restore the waters of North Carolina 2001 to 2007.

9                           (Applause.)

10                          Chairman Baddour:    And two framed

11          photographs by our own Lisa of the -- of the Green

12          River.

13                          Ms. Durso:     Oh, man.

14                          Chairman Baddour:    Aren’t those gorgeous

15          photographs?

16                          Ms. Durso:     Those are beautiful.

17                          Chairman Baddour:    Look here.   I’m sure

18          that they will hang --

19                          Ms. Durso:     Those are gorgeous.

20                          Chairman Baddour:    -- somewhere prominent

21          for her.

22                          Ms. Durso:     Thank you, Lisa.    That’s

23          beautiful.

24                          Chairman Baddour:    Okay.   But we hope that

25          you’re not going too far away.         And you know where we


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1           are, and we know where you are.

2                           Ms. Durso:        Thank you so much.

3                           Chairman Baddour:      Okay.    Yes, Yevonne?

4                           Ms. Brannon:      May I just say --

5                           Chairman Baddour:      You may.

6                           Ms. Brannon:      -- thank you to Francine.        I

7           think that the calm is the best explanation I’ve heard

8           of you.       But also, you know, there is the term “the

9           calm before the storm.”          Francine is also a very --

10          She has really been a mentor to me since I started

11          this program.           I have learned so much by calling her

12          and seeking out her knowledge and her explanation.

13          And all of us appreciate Francine the way you’ve

14          always answered everything.          Instead of saying, “No,

15          you dummy,” she says, “Well, not exactly.”

16                          And so, it’s really very pleasant to be

17          redirected and reguided and explained and taught and

18          educated in all the many intricacies of this program,

19          and she has really done that for me.            She has really

20          been this Board’s best representation to the public.

21          When the public calls Clean Water and they talk with

22          her whether they’re an applicant of a trust or a state

23          agency or an interested citizen.             It is really

24          comforting to know that this is the person that they

25          often talk to.           And that she’s represented as not only


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1           knowledge -- with her knowledge, but with her class.

2           And as a very honorable person, that comes across a

3           lot.

4                           And I really think that we can’t replace

5           you.      You’re irreplaceable.        And the comfort you bring

6           to your colleagues, the staff and to all of us is

7           immeasurable.           And I really am thankful that I’ve had

8           an opportunity to meet you and to be influenced by

9           you, and thank you for everything you’ve done.

10                          Chairman Baddour:        Tom?

11                          Mr. Jones:          Uh-oh.   Tom’s got a

12          microphone.          I thank you for your indulgence.          But I

13          just wanted to be on record as a very close working

14          partner with Francine.            She has heard all this stuff

15          before.       I’ve worked with a lot of people in my life.

16          Everybody has some pretty intense working

17          relationships that we’re required to be forged with a

18          lot of different kinds of people.               I work with

19          wonderful people.             But Francine is the epitome of

20          professionalism, friendship, industry -- I’m reading

21          notes because I don’t want to forget any of them --

22          dedication, grace, and a beautiful person.

23                          I’m a truly blessed man to have been able to

24          work with Francine and to have had the last five plus

25          years partnering with her.            And having that pleasure


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1           bestowed upon me, it’s an experience that I have no

2           right to have ever had expected.             And Clean Water

3           could hire from here on out elephants and giraffes and

4           baboons, whatever, and I wouldn’t complain because I

5           have -- because I have worked with Francine Durso.

6           Nothing else can match that.          Thank you, Francine.

7           Thank you, Mr. Chairman.

8                           Chairman Baddour:     Thank you.

9                           (Applause.)

10                          Chairman Baddour:     Karen?

11                          Ms. Cragnolin:        When Francine came here,

12          I don’t know if everybody remembers, you know, we were

13          really a nascent organization, just starting.             And

14          really didn’t have systems in place; we didn’t have

15          procedures in place.          I’m not even sure we had

16          bookcases, file cabinets.          And Francine organized us.

17          She put us on the track to be a good professional

18          organization that we’ve become, and took on a huge,

19          huge task doing that.

20                          And, you know, we can never thank you

21          enough, I don’t think.          And you have been the eye of

22          the storm.         When there’s a lot of craziness going on

23          and we’re trying to figure out the $20 million in

24          deferred projects, and what did we do in Greenville;

25          somehow you remembered all that, in that kind of


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1           institutional memory.          And commitment to excellence is

2           going to be very hard to replace.           So, just thank you

3           very much.

4                           As one of the Committee Chairs, you know,

5           there’s a lot of questions that come up before one of

6           these meetings and during one of these meetings, and

7           you never once made me feel inadequate because I

8           didn’t have the answer or I had asked a stupid

9           question.        So, I appreciate that very much.     Thank

10          you.

11                          Chairman Baddour:     Thank you, Karen.    Stan?

12                          Mr. Vaughan:     I agree with everything that

13          has been said, Francine, so I won’t repeat it.            But I

14          do think there’s a different perspective that I’ll

15          offer being Chairman of the Budget and Efficiency

16          Committee.         When we were, a year and a half ago,

17          talking about a lot of change, if I had been in your

18          shoes I guess my reaction is, “I don’t want to go

19          through all that stuff,” you know.           But I can say that

20          she was in the forefront offering suggestions,

21          agreeing with the process, and certainly telling us

22          how we could make it work.          And so, to the extent that

23          the changes we made this year work, I think she had --

24          her footprint was on it, and I certainly appreciate

25          that.


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1                           Chairman Baddour:          Okay.    Thank you.

2                           Mr. Beane:         May I make a comment?

3                           Chairman Baddour:          Yes, Francine, sure.

4           Oh, wait a minute.            Excuse me.     Ron?

5                           Mr. Beane:         I want to make one comment.

6           Working with Francine has been a pleasure.                I always

7           used to, when people would call me wanting a

8           recommendation about someone who was going to work for

9           them, I always used -- I said, “Let me just put it

10          like this.         You could do a lot worse, but you ain’t

11          going to do a whole lot better.”              And that’s the way I

12          feel with where you’re going.               They ain’t going to do

13          a whole lot better.           And that kind of says it all.

14          Thank you.

15                          Chairman Baddour:          Francine?

16                          Ms. Durso:         Thank you so very much.        I

17          really can’t tell y'all how much this means to me.

18          And I really appreciate the honor and the privilege

19          that I’ve had to work for this organization that I’ve

20          come to love.           And it’s -- As Karen said when I came

21          here, they told me my job was to get systems in place

22          and get things organized and get it functional.                  And

23          it has really been exciting to be a part of that and

24          part of the staff, the whole staff that has made that

25          happen.       But I really do have a sense of satisfaction


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1           from that.         And I just feel like this organization is

2           on such good footing now and in such good hands.

3                           And I do want y'all to know that I’m

4           actually leaving to move towards something else that

5           is interesting and exciting to me.            And I’m not -- I’m

6           not running away from anything here.           This is really a

7           great opportunity.            And my one regret is that it came

8           up at the same time that I had to make a choice

9           between staying to work with our wonderful new

10          Executive Director, Richard, and working with you, Mr.

11          Chairman, or moving forward.           And it unfortunately --

12          it was just time to move forward.

13                          And I want to say, too, that I love the

14          mission of this fund, and that it has been a privilege

15          every day to work with this professional and

16          exceptional staff.            And there is no way that this fund

17          could accomplish what it does without the staff.

18                          And to y'all trustees, I want to say that I

19          have learned something from each and every one of you,

20          and I really am grateful for that and appreciative of

21          that.      And I admire your dedication and the time and

22          effort that you all put into this really important

23          program.        And I thank you all for your very kind

24          words.       That was really -- It’s really incredible.        I

25          really appreciate it, and it’s been wonderful.


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1                           (Applause.)

2                           Chairman Baddour:          Let me just mention two

3           things, just to inform the Board of this along kind of

4           the same lines.               We -- When D.G. left, we said nice

5           things about him.              We did not have a picture of

6           something for him, and we have one made up.                 Do you

7           have that, Gina?              Show it to them.     You know, he was

8           really proud to have been at the Chimney Rock

9           dedication.          And so -- Again -- Is this one of your

10          photographs, Lisa?

11                          Ms. Schell:           Yes, sir.

12                          Chairman Baddour:          Okay.    So we’re going to

13          -- We’re not going to do it in any ceremony, but I

14          think maybe Richard and I will take him to lunch one

15          day and give that to him on your behalf.                And Jerry

16          came to me -- You know, we have made this presentation

17          to Mark Basnight that Jerry has.                 We are ready to do

18          that, and we’ve had a hard time kind of arranging

19          that.      And I think I agree with Jerry.            We just need

20          to go ahead.          And I think perhaps maybe Richard, Jerry

21          and I will go to Manteo or do it in Raleigh sometime,

22          and perhaps some of you would like to join us.                 I’ll

23          leave Jerry to do that.              But we probably will not do

24          it at a formal meeting.              We’re just going to figure

25          out a way to get it done.              And Jerry, anything you


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1           want to say about that?

2                           Mr. Wright:          We had postponed giving Mark

3           that award for the tenth year celebration because of

4           Sandy’s illness.              And we all know Sandy died recently,

5           and the restaurant burned down.                Many of the mementoes

6           that he had from state government were destroyed in

7           that fire.         And we feel like that it’s appropriate now

8           to give that.           And we have checked with the ethics

9           board about that.             They have okayed that, so we’re

10          going to go ahead and do that at this point.

11                          Chairman Baddour:            Okay.   All right.   Now,

12          with those preliminaries, Gina, would you call the

13          role?

14                          Ms. Daniel:          Phil Baddour?

15                          Chairman Baddour:            Here.

16                          Ms. Daniel:          Ron Beane?

17                          Mr. Beane:           Here.

18                          Ms. Daniel:          Yevonne Brannon?

19                          Ms. Brannon:         Here.

20                          Ms. Daniel:          Norman Camp?

21                          Mr. Camp:            Here.

22                          Ms. Daniel:          Rick Coleman?     Karen

23          Cragnolin?

24                          Ms. Cragnolin: Here.

25                          Ms. Daniel:          John Crumpler?


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1                           Mr. Crumpler:   Here.

2                           Ms. Daniel:     Rance Henderson?    Joe Hester?

3           Bill Hollan?

4                           Mr. Hollan:     Here.

5                           Ms. Daniel:     Robert Howard?

6                           Mr. Howard:     Here.

7                           Ms. Daniel:     Charles Johnson?

8                           Mr. Johnson:    Here.

9                           Ms. Daniel:     Kevin Cragno-- I mean, Kevin

10          Markham?

11                          Mr. Markham:    Here.

12                          Ms. Daniel:     Chuck McGrady?

13                          Mr. McGrady:    Here.

14                          Ms. Daniel:     Dickson McLean?     John

15          McMillan?

16                          Mr. McMillan:   Here.

17                          Ms. Daniel:     Peter Rascoe?

18                          Mr. Rascoe:     Here.

19                          Ms. Daniel:     Stan Vaughan?

20                          Mr. Vaughan:    Here.

21                          Ms. Daniel:     Claudette Weston?

22                          Ms. Weston:     Here.

23                          Ms. Daniel:     Jerry Wright?

24                          Mr. Wright:     Here.

25                          Chairman Baddour:       General Statute 138A-15


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1           mandates that the Chair inquires to whether any

2           Trustee knows of any conflict of interest or

3           appearance of a conflict of interest with respect to

4           matters on the agenda.            If any Trustee knows of a

5           conflict of interest or the appearance of a conflict

6           of interest, so state at this time.              Kevin?

7                           Mr. Markham:        Thank you, Mr. Chair.     I’ve

8           got the -- an appearance of public interest based on

9           the relationship the company I work for has with some

10          of the grant applicants or their engineers.               And I

11          will read these into the record.               Make sure I have

12          them all here.           All right.    There will be 2006-S005,

13          Town of Kure Beach, stormwater mini-grant; 2007-421,

14          Robeson County, Saddletree Swamp drainage improvement;

15          2007-714, City of Raleigh, Pigeon House Branch; 2007-

16          415, City of Raleigh, Longview Branch; 2007-419,

17          RiverLink Creek; 2007-420 to RiverLink, Robinson

18          Creek.       And I believe that covers it.

19                          Chairman Baddour:        Okay.

20                          Mr. Markham:        Thank you.

21                          Chairman Baddour:        Thank you.    Karen?

22                          Ms. Cragnolin: Thank you, Mr. Chairman.            I

23          actually do have a conflict of interest, not the

24          appearance of a conflict of interest, on items 2007-

25          419 and 2007-420.             I did not participate yesterday in


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1           any of the meetings, any of the discussions or the

2           vote, and will not do so today.        Thank you.

3                           Chairman Baddour:   Thank you.

4                           Mr. Beane:     Mr. Chairman?

5                           Chairman Baddour:   Anyone else?

6                           Mr. Beane:     Mr. Chairman, I would like to

7           --

8                           Chairman Baddour:   Ron?

9                           Mr. Beane:     I would like to recuse myself

10          from 2007-708; it’s a City of Lenoir project.          And I

11          would recuse myself from any discussion and subsequent

12          vote.

13                          Chairman Baddour:   Thank you, Ron.    Anyone

14          else?

15                          Mr. Brannon:   Mr. Baddour?

16                          Chairman Baddour:   Yes?

17                          Mr. Brannon:   I would just like to state

18          that I do work with N.C. State University, and there

19          are a few applicants that are coming before the Board

20          today.       I do not work with any of these individuals,

21          departments or programs.        But I would just like to

22          have read into the record that I acknowledge that I am

23          an employee of a very large, major university that

24          does have some applications here today.

25                          Chairman Baddour:   All right.


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1                           Mr. Hollan:      Mr. Chairman?

2                           Chairman Baddour:       Yes?

3                           Mr. Hollan:      Our company owns property in

4           the immediate vicinity of one of the projects, 2007-

5           425, Winston-Salem, Bath Branch.             And I did not

6           participate in any of the discussion yesterday and

7           will not participate in discussion or vote on that

8           particular item today.

9                           Chairman Baddour:       Okay.   Thank you, Mr.

10          Hollan.       Anyone else?

11                          (No response.)

12                          Chairman Baddour:       All right.   We’ll move

13          to the revisions, additions and adoption of the

14          agenda.       Ron, I believe you have a motion to add a

15          report of the Personnel Committee to the agenda; is

16          that right?

17                          Mr. Beane:       Yes, it is.

18                          Chairman Baddour:       Okay.   Moved.

19          Discussion?

20                          (No response.)

21                          Chairman Baddour:       Okay.   So many as favor

22          adding report of the Personnel Committee to the agenda

23          signify by saying, “Aye.”

24                          Members:         Aye.

25                          Chairman Baddour:       Opposed, “No.”


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1                           (No response.)

2                           Chairman Baddour:        The ayes have it.   Any

3           other additions?

4                           (No response.)

5                           Chairman Baddour:        Then, the agenda is

6           adopted by consent.           Okay.   I would like to ask

7           everyone to please put your cell phones on vibrate or

8           off, if you have not already done so.            The transcript

9           of the June 2007 meeting was sent to the Board on July

10          5th, 2007.        Do I have a motion that that -- the minutes

11          of that meeting be approved?

12                          Mr. Brannon:      So moved.

13                          Chairman Baddour:        Moved and --

14                          Mr. Johnson:      Seconded.

15                          Chairman Baddour:        -- seconded.

16          Discussion?

17                          (No response.)

18                          Chairman Baddour:        So many as favor the

19          motion, signify by saying, “Aye.”

20                          Trustees:         Aye.

21                          Chairman Baddour:        Opposed, “No.”

22                          (No response.)

23                          Chairman Baddour:        The ayes have it.   I

24          would like to recognize our Advisory Committee member,

25          Dewitt Hardy, from the Department of Agriculture.


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1           We’re glad to have you.            Always glad to have you with

2           us.     Okay.      Let’s see.     Trustee appointments and re-

3           appointments.           I want to report to you that Rick

4           Coleman was re-appointed by the Senate.            The Senate

5           also appointed Dr. Vick Hackley who -- I think the

6           governor has not signed the appointments bill, so he

7           is not officially appointed, but we expect that the

8           governor will sign that bill in the next few days.

9           And so, Dr. Hackley will join us at our next meeting.

10          And also, Dr. Camp has been re-appointed by the House.

11          So we’re glad to have Rick and Dr. Camp continue with

12          us, and Dr. Hackley to join us.

13                          With regard to standing committee

14          assignments, you have a handout that has those new

15          committee -- has those committee assignments.            They

16          are basically the same as previously announced.             I

17          will appoint Dr. Hackley to the same committees that

18          Mr. Mosley was on.            Okay.

19                          There is a handout with regard to the

20          locations of the September and October meetings that

21          is revised.          The September meeting is going to be in

22          Alamance County, and the October meeting in McDowell

23          County.       There’s also, as a handout, a draft of our

24          meeting schedule for next year for 2008.           I would like

25          for you to take a look at that.            And we would like to


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1           make this as an action item.

2                           We start off next year with the retreat in

3           February.        We’re not showing another meeting until

4           June.      And I know that Stan and maybe some others have

5           felt that that was too long a break.         We may want to

6           go back and think about adding a meeting in there.           I

7           don’t know that we have to do that today, but we might

8           want to think about it.

9                           Let me mention, while we’re talking about

10          the Board meeting schedule -- and perhaps, Stan,

11          before we do that -- An idea that I had -- And I don’t

12          know, maybe we should refer this, Claudette, to your

13          committee to think about.         But I would like for y’all

14          to give it some thought.         It occurs to me that as we

15          meet, we are so busy.         And we don’t really, as a

16          Board, get a chance to go out and look at some of the

17          good things that we have done.

18                          And I wonder if we ought not take some time

19          in the spring -- And there are a couple of ways to do

20          it.     You could either do it on the weekend.       Or, you

21          could maybe just make it an entire week and have a bus

22          tour of a part of the state for our Board to go and to

23          see some of our projects, not as a part of a meeting

24          or anything.          I would envision it as the kind of thing

25          that perhaps if you decided to do it for an entire


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1           week, that you could join either part or all of it as

2           you wanted to.

3                           But I just wish we would give that some

4           thought.        It seems that the idea of going to a place

5           and going on Saturday, coming early, hasn’t worked

6           very well for one reason or the other.                 We have not

7           had good participation in that.                And I think we ought

8           to see -- we ought to see some of our projects, what’s

9           going on.        And, you know, it may be that we could see

10          some of the applications that we have also.                  I mean,

11          that’s another possibility.

12                          I think the Land Trust community and the

13          municipalities in the counties would be delighted to

14          help us put that kind of thing together.                   So let me

15          have your feedback on that at some point.                  And

16          Claudette, why don’t we ask your committee to take a

17          look at that and see if you think it’s a good idea and

18          maybe make some recommendations about how we could do

19          it.

20                          Okay.         Well, having said that, do I have a

21          motion about the Board meeting schedule for next year?

22                          Ms. Brannon:          Moved.

23                          Chairman Baddour:          So moved.    And seconded?

24                          Mr. McGrady:          Seconded.

25                          Chairman Baddour:          Okay.   Stan?


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1                           Mr. Vaughan:     The question I have -- I

2           don’t see that in my packet.

3                           Chairman Baddour:       Do you have it, Stan?

4                           Mr. Vaughan:     I’ve got it.

5                           Mr. Hollan:      Mr. Chairman, is February 10th

6           and 11th, is that Presidents’ Day?              Is that the three-

7           day Presidents’ Day weekend?            Does anybody know?

8                           Ms. Weston:      I don’t think so, but I’m not

9           positive.        Because I remember looking to do a meeting

10          on Presidents’ week, and I’m almost sure it’s the next

11          week.

12                          Chairman Baddour:       Okay.    Motion and a

13          second.       Any discussion?

14                          (No response.)

15                          Chairman Baddour:       So many as favor the

16          motion, signify by saying, “Aye.”

17                          Members:         Aye.

18                          Chairman Baddour:       Opposed, “No.”

19                          (No response.)

20                          Chairman Baddour:       The ayes have it.    And

21          we will revisit this after hearing from Claudette’s

22          committee, and we’ll see where we go with that.              Okay.

23                          Ms. Weston:      Where is the retreat?       Do you

24          know?

25                          Chairman Baddour:       We don’t know yet.      We


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1           are -- Maybe some of you have some ideas about that.

2           We’ll welcome feedback on that, also.

3                           Ms. Weston:    Just as a note, we just did a

4           retreat for Wildlife Non-Game at The Summit, the Parks

5           & Rec.       And it’s a very nice place.

6                           Chairman Baddour:   Good.

7                           Ms. Weston:    It’s a little different from

8           the Forestry where we used to be.         But it’s very

9           comfortable and they have, you know, large meeting

10          rooms.       We have a large Non-Game Committee.    So it’s

11          kind of convenient in Greensboro.

12                          Chairman Baddour:   Good.   If you have any

13          other suggestions, please pass those along to Richard

14          and --

15                          Ms. Weston:    I think we should go to the

16          Sanderling.

17                          Ms. Cragnolin: Yeah, and I want to ride.

18                          Chairman Baddour:   Okay.   Next on the

19          agenda is Raleigh office space needs.         Richard, I

20          think I’m going to ask you to speak to that even

21          though it’s -- if you would?

22                          Mr. Rogers:    All right.   I believe we have

23          been in this space for two years now or so, and we’re

24          over at the Certified Public Accountant Examiner’s

25          office over on Oberlin.       It’s on Oberlin right off


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1           Wade Avenue.          Currently, we have about nine offices in

2           that space.          We have approved about 12 positions in

3           our central office, which automatically limits our

4           efforts there to get folks in offices.           Fortunately,

5           we have not filled a position.           We have a vacancy, so

6           everybody current is in an office.

7                           The intention that we have is to go to Bob,

8           who is the manager and the -- I guess the CPA

9           Examiner’s own the building that we’re leasing from,

10          and they do have space within the building that we can

11          move into.         And I wanted to discuss with y'all, the

12          Board, just to start that in motion and begin talking

13          to them.        We’ve had some preliminary discussions.

14                          Currently, what we’re looking at is about a

15          910 square foot addition, which will allow three

16          offices in addition to the offices that we currently

17          have.      And that will allow us to provide office space

18          for our financial officer that we’re getting ready to

19          hire in the next couple weeks.            Also, the stewardship

20          position has been approved as well.           And we’re also

21          looking at and, considering the possibility of, moving

22          our Water Quality Advisor into the central office.

23                          And I think with the rearrangements it will

24          also provide us a little space for a meeting room that

25          we don’t have now.            This is valuable for staff that


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1           comes in from out of town.             It’s also important with

2           regards to the outsource lawyers that we have that are

3           processing property transactions.              It would provide

4           them some space to come in and actually be able not to

5           take somebody’s office that’s not there that day to

6           work, but provide them an opportunity as well.

7                           The idea here is to just extend our current

8           lease for the same cost per square foot.             It’s about

9           $16 per square foot currently.             And we’re looking to

10          get that in negotiation, and hopefully we’ll have

11          something back for y'all to approve.              If not, go ahead

12          and move forward with it by September.

13                          There will be some construction costs with

14          regards to developing the offices.              The current space

15          has offices on one side of the wall.             There’s another

16          side of that area that we’ll want to develop and bring

17          in three offices.             And there will be some moving of

18          some doors and access.            If we do this, it will also

19          give us an outside entrance directly into Clean Water

20          offices, which I think is -- would be extremely

21          helpful for public access and for us to just have that

22          interface directly to the outside.

23                          So this is -- We’re looking with regards --

24          And these are gross estimates with regards to --

25          Construction costs would be less than $10,000, and


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1           getting phone lines in and getting walls up, doors,

2           computer lines dropped in, furniture for the new

3           offices, which we’ll -- I’m sure we’ll go to surplus

4           for all that, regardless.            And then, I think the

5           additional lease space will run us about -- what was

6           it -- 15 -- right around $14,000 a year.

7                           So, to me, this is a critical need for us so

8           that we can continue to operate efficiently.                And I

9           think is important that we do give our staff some

10          space to function in offices and not have to sit on

11          top of each other.            So, I’ll be glad to take any

12          questions.

13                          Chairman Baddour:          Any questions?

14                          Mr. Hollan:        It’s not unusual for the

15          landlord to pick up the upfit costs -- the

16          reconfiguration costs for the tenant.

17                          Mr. Rogers:        Yeah.     And I’ve had some

18          preliminary discussions with Bob with regards to that.

19          And I think his -- What we need to do is look at the

20          long-term lease and how much longer we’ll be in that

21          space, and he’ll -- I think our lease is annually,

22          March.       We’ve got a couple more years, and we’ll look

23          to extend that and see if -- see if he won’t take on

24          some of those costs.           I know he’s willing to put in

25          new carpet and some of that upfit.              But we’ll talk a


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1           little further.

2                           Chairman Baddour:        Stan?

3                           Mr. Vaughan:      Question.      Do we have to move

4           through the property office on this?

5                           Mr. Rogers:       Yes, sir.

6                           Chairman Baddour:        I think what Richard is

7           looking for is just for this Board not to -- He

8           doesn’t have anything negotiated, but to authorize him

9           to negotiate to see what he can come up with.               And

10          then, of course, he will bring back to the Board for

11          approval whatever he comes up with.              And he will be, I

12          think, along the way consulting with you, Stan, as

13          Chairman of the Budget Committee on that.              So, do I

14          have a motion to that effect?

15                          Ms. Weston:       So moved.

16                          Chairman Baddour:        Okay.

17                          Mr. Camp:         Seconded.

18                          Chairman Baddour:        Moved by Claudette,

19          seconded by Norman.           Discussion?

20                          (No response.)

21                          Chairman Baddour:        So many as favor the

22          motion, signify by saying, “Aye.”

23                          Trustees:         Aye.

24                          Chairman Baddour:        Opposed, “No.”

25                          (No response.)


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1                           Chairman Baddour:       The ayes have it.    It is

2           really crowded over there, and I think that will be

3           much needed.

4                           Now, time on our agenda for public comments.

5           Three minutes per person.           Is there anyone of the

6           public who is here who would like to make a comment?

7                           (No response.)

8                           Chairman Baddour:       Okay.   Hearing none,

9           we’ll move to our consent agenda.            Take just a second

10          and look over the consent agenda.            Is there any item

11          that a member would like to have removed from the

12          consent agenda for the purpose of discussion?

13                          (No response.)

14                          Chairman Baddour:       Okay.   Hearing none, so

15          many as favor the adoption of the items on the consent

16          agenda, signify by saying, “Aye.”

17                          Trustees:        Aye.

18                          Chairman Baddour:       Opposed, “No.”

19                          (No response.)

20                          Chairman Baddour:       The ayes have it.    We

21          now move to our Executive Director’s report.             Richard?

22                          Mr. Rogers:      Thank you, Mr. Chairman.

23          It’s great to be here with y'all this morning.              We

24          were pulling this agenda together, and I was thinking

25          at my first meeting I probably wouldn’t have much to


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1           say.      And then Francine showed me the agenda, and it

2           looked like I had a whole lot to say.          So -- But

3           hopefully, we’ll move through these very quickly.             And

4           if you’ll refer to your Board packet, number one,

5           Clean Water Management Trust Fund 2007-08

6           appropriation.           I wanted just to print the budget

7           report page for you.          It’s less than half a page, but

8           I think it says a whole lot.          It says a lot for the

9           work that the Board has done.           It says a lot for the

10          projects that have been funded in communities.           And I

11          think it’s just a great notion of support from the

12          General Assembly for the Board of Trustees and the

13          Clean Water Management Trust Fund.           So there we have

14          our $100 million that we’re already about spending

15          with the report we’ll hear from the Restoration/

16          Stormwater Committee today.

17                          A couple pieces of legislation that we need

18          to note, there are also impacts to us.          And John, if

19          you can step in any time you want to here and help me

20          with this?         But clarifying the high unit cost, I

21          believe that this is something that we wanted to see

22          done so that we have a better direction in

23          understanding their specialties.

24                          Senate Bill 1468, I think this is the D.G.

25          Martin Memorial Bill that was passed through the


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1           Senate and General Assembly.          And basically, what this

2           bill does is it wants us to make sure that we keep in

3           mind the purpose of innovation and the opportunity of

4           innovation for guides from a Clean Water perspective.

5           And, I believe, if the Chair will make a motion, we

6           perhaps need to refer that to our Criteria Committee

7           to get that in front of -- in the proper place with

8           regards to our committee structure.

9                           Chairman Baddour:         Yeah.   Let me, though --

10          Richard, if I can interject?

11                          Mr. Rogers:       Sure.

12                          Chairman Baddour:         The reason I think

13          Richard said it was the D.G., because D.G. was called

14          to a committee meeting, and without any notice asked

15          what he thought about it.          And I thought he fumbled

16          through it pretty well.

17                          Mr. Rogers.       He did.     He did excellent.

18                          Chairman Baddour:         Actually, we did not

19          take a position on this bill at all.              It did come out

20          of the Senate.           And we’ve talked a little bit about

21          what it means and what it doesn’t mean, and I do think

22          it’s probably a good idea for us to touch base with

23          the legislative leadership to see exactly what they

24          feel like they meant by this bill.

25                          But what I would like to do -- I don’t know


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1           that we need a motion, but would like to ask our Grant

2           Criteria Committee to look at this bill and to

3           recommend to the Board how we should react to that and

4           how we should change our evaluation of projects or

5           exactly what we should do in response to that

6           legislation.          Any comments or questions that anybody

7           has about it?           John, have you got anything you want to

8           say about that?

9                           Mr. McMillan:       No, not really.   This bill

10          came out of the corner office in the Senate, and I do

11          think we need to have some interpretation about that,

12          which we will obtain.

13                          Chairman Baddour:        Okay.   All right.   Go

14          ahead, Richard.

15                          Mr. Rogers:         The legislature -- I think

16          the conservation efforts going into this legislative

17          session with high expectation and hopes.              And while

18          the expectations were not met, I think the General

19          Assembly did an incredible job with the resources they

20          had to work with to provide some funding.              Of course,

21          they fully funded Clean Water, but there’s also doors

22          that they opened.             With regards to the Agriculture

23          Development and Farmland Preservation Trust Fund, the

24          General Assembly funded $8 million.              This is

25          significant in several respects.


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1                           One, is the fact that it has never received

2           that much funding.            The other with regards to how it

3           impacts Clean Water is it really provides an up in

4           funding for our projects where we do riparian

5           acquisition.          And we’ll be able to have another source

6           of revenue to use to get the whole package done.             And

7           I’m terribly excited working with Dewitt in the

8           department and looking at that and how we can partner

9           and really see some good impact with regards to using

10          those funds to add value to the projects that Clean

11          Water provides, as well.

12                          The Land for Tomorrow and Waterfront Access

13          and Marine Industry Fund, COPS funding, is $120

14          million that is allowing the Parks & Rec Trust Fund

15          and the Natural Heritage Trust Fund to use COPS, $50

16          million for the Natural Heritage Trust Fund, and then

17          $70 million for the Parks & Rec Trust Fund.            $50

18          million of the Parks & Rec Trust Fund allocation will

19          be used in their traditional manner.           There will be

20          $20 million that’s going to be used for Waterfront

21          Access.       That is going to be organized in the Division

22          of Marine Fisheries and led by the director of that

23          division -- I’ve forgotten his name -- Louis Daniel,

24          who I used to supervise not so long ago.           But -- And

25          it is really an opportunity to meet an incredible need


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1           from the commercial fishing industry resource, and

2           also public access.

3                           So, I think that will be something that

4           we’ll look at closely, and I’ll work closely with

5           Louis as they move along in assessing the need, as

6           well.      And again, another $50 million in each of the

7           Parks & Rec Trust Fund as well as the Natural Heritage

8           Trust Fund, again, provides great opportunity to take

9           advantage of the opportunities that are out there

10          today that we know won’t be there tomorrow.

11                          Another, I think, funding that’s going to

12          greatly benefit us with regards to wastewater was $100

13          million that was allocated to the Rural Center water

14          and sewer improvement grants.       $50 million of this

15          will go to water supply projects, and then $50 million

16          will go to wastewater projects.       And again, I think

17          it’s an opportunity and will relieve some of the

18          pressure that we felt as basically one of the only

19          grant funds that has wastewater money in it.       So

20          again, it’s a great opportunity to partner with Billy

21          Ray over at the Rural Center, and we look forward to

22          working with him on that.

23                          I kind of ran through those quickly.     If

24          y'all have questions with regard to that, we have

25          provided you the legislation out of the budget report


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1           as well as any provision that was in the budget for

2           your review.          So I’ll be glad to talk or have

3           discussion around that.          Mr. Hollan?

4                           Mr. Hollan:       Richard, DENR requested some

5           staff positions to support the CREP program.            Do you

6           know what the dispositions of those were?

7                           Mr. Rogers:       Yes, sir.    There were two

8           positions that were requested, I believe, right,

9           David?       And both of those were funded.       So we did get

10          funding for those, and that should relieve some of the

11          administrative costs that we have from Clean Water in

12          that program.           And David, we appreciate y'all’s

13          support of that and moving that forward.            They have

14          been working hard on that, and I think it’s good.               It

15          really is.

16                          Chairman Baddour:      Thank you for bringing

17          that up, Bill, because that’s something we have --

18          that’s stuck in our craw for a while, and that’s good.

19          Great.

20                          Mr. Rogers:       Next is the grant status

21          update.       I know it has been of interest to the Board

22          members, and the Chair has had several conversations

23          with me -- with us trying to get a handle on where we

24          are in the process of after we award grants, how we

25          move contracts through, and the process that we’re


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1           having.       I will tell you that staff has taken this

2           extremely seriously with regards to our acquisition.

3           There’s a huge spreadsheet that they are in the

4           process of taking every one of the contracts or

5           closing, where they are in the process, and trying to

6           get a good handle on that.

7                           What I report to you is with regards to the

8           2006 A and B grant cycles.       There are 166 applications

9           currently as of the 10th of this month.       We encumbered

10          116 of those applications, or 70 percent of the

11          approved grants by the Board last year.        And that

12          represents about 75 percent of the funds.       $86 million

13          is unencumbered now and under contract.

14                          With regards to negotiating in contracts,

15          the remainder, there’s only two that I know of that we

16          have not gotten any feedback from the applicant on

17          some information, but others we have had feedback and

18          working on getting those contracts closed.       I hope to,

19          at the next Board meeting, provide you a little more

20          detail where we are in the process with regards to

21          closings on properties, and get you a little more

22          detail with regards to that.

23                          To me, this is an important administrative

24          process that we have to have a handle on.       I think

25          when we have a couple hundred million encumbered that


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1           sits there, we need to have a good explanation for why

2           we have it.          Or, we’re going to start being questioned

3           from the General Assembly about our ability to spend

4           funds.       So, we’ll be working diligently on this, and

5           we will provide you a hopefully more detailed report

6           at the next Board meeting.          And I’ll be glad to take

7           any questions with regards to that.

8                           Chairman Baddour:     Any questions?

9                           (No response.)

10                          Chairman Baddour:     The -- You know, as

11          Richard had said, the business of getting our grants

12          under contract, getting the money encumbered and with

13          regard to acquisitions, getting them closed is a point

14          of emphasis for me as your Chair.            And so, I’ve had a

15          lot of talk with it with D.G. and with Richard, and I

16          believe we are -- we’re trying to get a good grip on

17          it.

18                          I think what’s real important -- I’ve told

19          Richard this -- starting out under his leadership now,

20          you know, to find out where we are now so that we have

21          an ability to measure progress and to learn ways that

22          we can improve what we are doing.            And he is working

23          on that; the staff is working hard on it.           So at any

24          rate, I just wanted to report that to you.           Okay.

25                          Ms. Cragnolin: Mr. Chairman?


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1                           Chairman Baddour:      Yes?

2                           Ms. Cragnolin: I think it was at the last

3           meeting that you talked about our administrative funds

4           and how they are tied to the unencumbered balance

5           issue, and we were going to work on making sure that

6           we had enough administrative operation funds as we get

7           better at the contracts and getting them out the door.

8           And we have less money in the -- you know, in the bank

9           account.        We don’t -- You know, are you pursuing those

10          conversations?

11                          Mr. Rogers:    Yeah.    I think one of the

12          things we need to do is get a handle on all the

13          activities that we are doing.          And, to me, in my short

14          time here, it has hit me like a ton of bricks that,

15          you know, we’re taking in applications, we’re

16          accessing applications, we’re approving applications,

17          we’re getting folks under contract.           But then, we have

18          the whole issue of management of those contracts that

19          we need to spend more time on.          I think it will make

20          the Board feel comfortable, and the staff feel

21          comfortable to make sure that our resources are being

22          used properly, they’re being used efficiently.           And

23          hopefully, that will kind of head off what we have

24          coming back in for extra funds for, you know, projects

25          that have had overruns, that we’ll be managing the


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1           projects a little better.

2                           But we do need to take a look at the

3           processes we have, the resources we have allocated to

4           them.      And as you say, we work down that fund balance.

5           How is that going to impact our ability to continue to

6           meet the demands of processing contracts and closings

7           and that kind of thing?        You know, we need to kind of

8           make sure that we keep that in balance, as well.

9                           Chairman Baddour:   But let me say this,

10          too.      And again, I’m going to refer this issue to Stan

11          for his -- for the Budget Committee, and then to John

12          McMillan.        We -- I think we’re going to need to ask

13          the General Assembly to change the cap as to how we

14          figure our administrative expenses.          Because if we

15          reach our goal in trying to get this balance down,

16          it’s just not going to work.

17                          And the feeling is that we may need to ask

18          that it be a percent of our operating income as an

19          alternative and what that percent should be.           It would

20          seem, to me, that our Budget Committee would be the

21          appropriate place to take a look at that, and maybe

22          it’s something that we can address in the short

23          session.        Would you do that, Stan?

24                          Mr. Vaughan:   Certainly.    Mr. Chairman, we

25          have given it some consideration.           Honestly, the


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1           problem now is based on the cash balance, I think.

2           And the cash balance is a moving target.           So it ought

3           to be based on something fixed, which means that

4           probably as Phil said, the most logical thing would be

5           our annual allocation, some percentage of that.            And

6           obviously, I think in working with the public’s money,

7           we’ve got a real interest in one, being sure that we

8           have the right staff and an efficient administrative

9           budget.       But also, we don’t want to go way out there

10          and start taking too much of our grant funds to run

11          the organization.

12                          So, that is going to require looking at our

13          budget real hard to determine where we are today as

14          far as total cost and where we’re likely to go over

15          the next few years, and then what makes sense as a

16          percentage of the annual revenue.            And, of course,

17          even then you’re at some risk because in any year the

18          legislature could either decrease our grant or

19          increase our grant.           So that would have an effect on

20          the administrative budget.           But obviously, if they cut

21          us back to $50 million a year, then we’ve got to do

22          something administratively anyway because we can’t

23          keep the same staff on a $50 million budget that we

24          would have on a $100 million budget.           But these are

25          things we have to look at.


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1                           Chairman Baddour:        Well, we’ll ask your

2           committee to look at that --

3                           Mr. Vaughan:     Okay.

4                           Chairman Baddour:        -- Stan, if you would.

5           Okay.      Richard?

6                           Mr. Rogers:      Our intention is to provide

7           the Board with our administrative budget at next

8           month’s meeting for approval.            And then Francine is

9           going to give us a better view of the 2006-2007

10          administrative budget.

11                          Ms. Durso:       Thank you, Richard.    At your

12          place this morning there should be the usual

13          spreadsheets that go over the budget status for the

14          past month.          And I think those are up on the Board as

15          well.

16                          The first thing I wanted to do, though, is

17          go over really a summary of last fiscal year, ’06-’07

18          fiscal year just so y'all could see where we started

19          in July of ’06 and where we ended up in June of ’07.

20          And you can see the increasing cash balance in the

21          year, and that’s because, thanks to the General

22          Assembly and everyone’s hard work, we had a lot of

23          money come in this year as far as the -- as far as our

24          allotment.         And you can see on line five that we were

25          only able to spend in grant funds $76 million.             And,


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1           of course, we took in $100 million plus about $9

2           million in interest.             So, this is why our cash balance

3           is increasing every year.             So I just wanted to give

4           y'all a quick summary of where we ended up and where

5           we’re starting as of July 1 this year.

6                           The next page -- The next page is the July

7           cash flow, which y'all have seen every month.              And

8           this is where I just show you what was unencumbered

9           the beginning of the month, how much interest we took

10          in.     We did get our first one-twelfth of the $100

11          million allotment, so we did receive $8.3 million

12          already in July.              And then you can see at the bottom

13          the unencumbered cash and the encumbered cash for the

14          end of July.

15                          And the next sheet that I do is just kind of

16          try to look at -- Actually, at the top that should

17          say, “Projected fiscal year ’07-’08 cash flow.”              But I

18          just try to look at where you all will be at the end

19          of this year.           And that dollar amount, if you scroll

20          down, about what I’m projecting is that y'all would

21          have this 107 -- a little over $107 million to put

22          towards the applications that are in front of y’all

23          this cycle.

24                          And so, those are the numbers that the

25          project committees are looking at when they’re looking


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1           at how much money they’re going to have to allocate.

2           And these are things that you all will approve in the

3           administrative budget next month about how much to put

4           forward for the acquisition mini-grants, donated

5           grants, stormwater mini-grants and so forth.               And, of

6           course, we still do pay a principle and interest of

7           the COPS funds in the past several years, and that’s

8           running a little bit over a million dollars a year

9           making those repayments.

10                          I’ll be happy to answer any questions.           That

11          concludes my report.             Thank you.

12                          Chairman Baddour:         Questions?

13                          Mr. Hollan:          Francine, we’re showing

14          52,400,000, round numbers, in unencumbered cash as of

15          the end of July.              We’ve got 42,300,000 in approved

16          grants not under contract.             Does that mean that we

17          have $10 million of money that has been -- that is

18          available to be committed?              I mean, is this a surplus

19          in our funds?           Because I thought we were close at the

20          last meeting.

21                          Ms. Durso:           At the last meeting we were

22          -- I think we were about -- I thought we were going to

23          have about a $4 million surplus.                And then y'all

24          actually had added money to a number of contracts last

25          month, so some of that got eaten up.               But where that


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1           comes out and where that shows up actually is in the

2           $107.7 million that you all have to allocate.          Because

3           if you think about it, you would have coming in in

4           income this year about $108 million, 100 million from

5           the allotment and about 8 million in interest.          And

6           you’re almost able to allocate all of that towards

7           grant funds.

8                           And so, what that means is the surplus is

9           actually going towards the administrative budget and

10          the COPS payments and things like that.         This is why

11          you almost have the whole amount to put towards grants

12          this year, because there was some surplus from last

13          year.

14                          And what I was trying to explain last time,

15          too, is the surplus usually comes in in the amount of

16          interest because the interest is just hard to predict,

17          and I’ve always tried to be a little bit conservative

18          on interest and not banking on getting a huge amount

19          of interest.          And we did get more interest last year

20          than what I had anticipated.

21                          Chairman Baddour:     Any other questions?

22                          Mr. Vaughan:     This is a further explanation

23          for Bill.        Remember this is the projected cash for

24          next year; it’s not the actual.          And things like line

25          five, contracts to be unencumbered, that’s just an


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1           estimate right now.           That’s not an absolute number.

2           So that number is going to vary just like the interest

3           is an estimated number; it’s not an absolute number.

4           The only absolute number is the remaining allotment to

5           be received and the COPS money and things like that

6           that are already committed.          All these other items are

7           budgeted -- things we’ll be budgeting on.          I guess

8           we’ll approve the request in September.          And so, they

9           may change a little bit as we finish our budget.

10                          Mr. Hollan:       I wasn’t looking at the

11          projected.         I was looking at our actual unencumbered

12          cash as of July 31 is $52 million, and that’s a hard

13          number.

14                          Mr. Vaughan:      Right.

15                          Mr. Hollan:       And our actual approved

16          grants that are not under contract is 42,300,000, and

17          that’s a hard number.          So as of July 31 -- forget

18          about interest going forward, cancellations, things

19          like that -- we have a surplus of $10 million in funds

20          that have not -- that were not allocated by us.             And

21          it’s a lot of money when we cut -- I mean, at the last

22          meeting I thought that we had about zeroed that out

23          because we don’t want to unknowingly not spend funds

24          that are -- when we have projects that we’re turning

25          down.      So it just seems to me that somehow $10 million


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1           or $9 million has appeared between June and August.

2                           And I don’t know if it’s some of these

3           contracts that got canceled on the consent agenda or

4           exactly what happened.              But we’ve got -- As of July

5           31, we had $10 million in funds in excess of the

6           amount that was -- that we had awarded, which is fine.

7           I’m just curious how that came about in a one-month

8           period.       Unless we didn’t -- It seems, to me, we were

9           projecting interest, income and other things.                 This is

10          a slightly different format from what we’ve had in the

11          past, so it’s hard to compare.

12                          Chairman Baddour:             Francine?

13                          Ms. Durso:            Okay.    Yeah, I know this is

14          -- it’s really confusing.              But at the end of last

15          month, there was still about $3 million that was going

16          to be surplus that you all did not spend.                 Y'all -- We

17          had -- We had about $3 million that we were

18          unencumbering, and there was about another 3 million

19          in surplus already.              So, y'all spent basically all the

20          money that was available to be unencumbered, so that

21          part is gone.

22                          I’m trying to think.           I’m trying to think

23          the best way to explain it.              But I’m trying -- What I

24          want to say is:               Bottom line, all of those dollars are

25          captured in the 107.7 that’s available for y'all to


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1           allocate for this cycle.

2                           Chairman Baddour:      Do you want to try,

3           Stan?

4                           Mr. Vaughan:   Yeah.    Look at -- Remember

5           you’re dealing with July 31st.          Remember in July we

6           received $8.3 million of next year’s allocation, which

7           hasn’t been encumbered yet.         So that would be in that

8           number.

9                           Chairman Baddour:      Okay.

10                          Mr. Vaughan:   Do you see what I’m saying?

11                          Mr. Hollan:    Yes, but we’ve spent -- we’ve

12          got 800,000 interest.

13                          Mr. Vaughan:   See, that -- that’s income

14          that came in July we haven’t encumbered yet, but it

15          wasn’t available at the end of June when you were

16          talking about.

17                          Mr. Hollan:    But we do spend $5 million in

18          that month, so we’re talking about $3 million dollars.

19                          Chairman Baddour:      Okay.

20                          Mr. Vaughan:   That’s good news, but I

21          understand the question.        But I do think the

22          difference primarily is $8 million towards this year’s

23          grants in July.

24                          Mr. Hollan:    In our last meeting, we were

25          partially funding some projects under the assumption


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1           that we did not have the funds, and it appears that we

2           did have the funds.           And I understand that something

3           happened in the meantime, but --

4                           Chairman Baddour:      I thought we funded

5           those projects.

6                           Mr. Vaughan:      I don’t think that’s right,

7           Bill.      I mean, I’ll be happy to try to work with you

8           on the side.          But I think the difference is you’re

9           looking at what was available at the end of June.             And

10          we’re now -- This is the number at the end of July,

11          and the big issue is that we received $8 million

12          towards next year’s allocation in July.           And we never

13          even -- we weren’t spending it that month.

14                          Mr. Hollan:       Stan, go back to --

15          unencumbered cash in June 30th was 54 million.           And we

16          had 42.3 million left, plus the 4.8 million that we

17          encumbered in July.           I mean, we still had a

18          significantly larger surplus at the end of June than

19          we projected, which you say is good news, but it’s

20          off.      It’s surprising news to me, and I just don’t

21          like surprises.

22                          Chairman Baddour:      I think we’ll probably

23          stop this at this point, Bill.           And I believe there’s

24          an explanation to that, and I’m going to ask Richard

25          and Francine to get with you and see if we can --


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1                           Mr. Hollan:           Thank you.

2                           Chairman Baddour:             -- straighten that out.

3           Okay.      Richard?

4                           Mr. Rogers:           I do want to note that I did

5           skip item number seven, the personnel update.                     And

6           since we had a personnel meeting added to the agenda,

7           we’ll let Chairman Beane of the Personnel Committee

8           review that, as well.

9                           Now, a communication report.           Lisa -- And

10          she’s also going to give us a little overview of a

11          trustee presentation that we’ve been working on for

12          y'all to show information that we have pulled together

13          for y'all’s opportunity that you have to present to

14          folks, as well.               So, take it away, Lisa.

15                          Ms. Schell:           Okay.     Due to technical

16          difficulties -- All right.              I will talk really loud.

17          I will enunciate.              Can y'all hear me?

18                          Chairman Baddour:             We can hear you.

19                          Ms. Schell:           All right.    First of all,

20          this is quite a privilege.              I want to add my

21          sentiments to those who have wished Francine well.

22          She and I started at the Trust Fund at about the same

23          time.      And Francine, it has been a privilege and an

24          honor, and we’ve had a lot of fun, and it certainly

25          has not been uninteresting.              So, thank you for


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1           everything.

2                           Communications report for this month.        We

3           have had well over 30 media hits since our last

4           meeting.        Most of those have been positive or neutral.

5           What I mean by neutral is just mention of the Trust

6           Fund by way of, for instance, a county commission

7           agreeing to apply for a grant in the next cycle, that

8           sort of thing.           Our new Executive Director was

9           interviewed on state government radio not too long

10          ago.      He also did an interview with News 14 almost

11          immediately after his introduction in June.

12                          So the media clips, again, Beulaville

13          commission approving money for wastewater plant.

14          Those are sort of the neutral hits that I was talking

15          about.       Lieutenant Governor Perdue mentioned us in a

16          visit she made up in the mountains.             And again, these

17          are all positives or neutral.

18                          One thing that did come up that was not

19          necessarily positive or neutral was the discussion of

20          the golf course.              I had several comments and e-mails

21          from trustees wondering how that got the media’s

22          attention.         That came about through reporters’ general

23          coverage of the goings-on at the legislature and that

24          legislation that we have already discussed this

25          morning.        And that’s how that was sort of picked up


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1           on.     It was picked up out of the News & Observer by

2           the Associated Press, and it went statewide and even

3           across the state lines to South Carolina, as you can

4           see.      Myrtle Beach tends to pick up a lot of North

5           Carolina news, for whatever reason.

6                           Media contacts since our last meeting:     News

7           & Observer, Fayetteville, Wilmington, State Government

8           Radio, and the Williamston Enterprise.       No surprise

9           there since that’s Richard’s hometown newspaper.           News

10          releases, general kinds of things.        Our meetings, our

11          full-funding, additional funding for the Cape Fear

12          Greenway project, and, of course, Richard.        The last

13          two there picked up and went statewide as well.

14                          Public request for information, in the

15          neighborhood of 20 or so.        Again, that’s just

16          information on grant applications and follow-up by

17          members of the general public on some of our projects.

18                          Events since our last meeting:   Little Sugar

19          Creek dedication down in Charlotte.       We had a

20          wonderful event that D.G. was able to attend in

21          Wilmington at the Bethel Road wetland.        And there he

22          is doing his D.G. thing.        That’s pictures of the

23          wetland there, and an overview.

24                          Planting at Carteret Community College.

25          Sarah and I were able to go out there and have a


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1           wonderful morning and see what they were doing on the

2           waterfront there.             Very well attended with volunteers

3           helping to plant.             It’s, of course, one of our older

4           projects.        Lots of different kinds of helpers that

5           day.      And that’s part of the project that’s developed

6           a little bit more in one of the earlier phases.

7                           Events that are coming up, we’re planning a

8           rather large event with our Wake County partners on

9           the Neuse River for September 6th.             You’ll be getting

10          invitations for that soon.            We’re going to actually do

11          a little paddle tour down the river to sort of be

12          Richard’s official introduction --

13                          Mr. Rogers:         To the water.

14                          Ms. Schell:         -- to the area media.     We’ll

15          try not to tip the canoe, although it might be fun to

16          get him a little wet.

17                          Mr. Rogers:         I think that’s coming.

18                          Ms. Schell:         Also, we’re being with the

19          Coastal Land Trust to do an event on the Burnett Tract

20          later in the month, and with Coastal Federation for a

21          Jones Island event in September, as well.             Hopefully,

22          the hurricanes will not materialize.

23                          The projects that I have been working on,

24          always working on something with regard to the annual

25          report, it seems.             Mostly getting photographs for our


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1           photo library.           Revisions and updates to the website,

2           of course.         Talking points and events planning, which

3           we have made into the presentation that Richard

4           mentioned.         So let me switch gears here.

5                           And before I actually give you the

6           presentation, you all received this via e-mail.              I’ve

7           gotten comments back from some of you.             This is

8           something that the Chairman and our Interim Director

9           asked me to put together for your use in the event

10          that you are called upon to make presentations in

11          local communities -- in your local communities.              It is

12          very flexible, very easy, very simple, very easy to

13          operate and run.              No flying things coming in from all

14          directions that people who like to overuse PowerPoint

15          tend to do, as you’ll see.

16                          It’s also very easy to update.        And when

17          these numbers are updated, I’ll be able to send you a

18          new version of this.             Also, I’ll be able to tailor a

19          slide or two to put into this for your use that speaks

20          specifically to our projects in your local community.

21          For instance, if you are in the Cape Fear River Basin,

22          you can put a slide in the talks about our investment

23          in that river basin, in a particular county in that

24          river basin, et cetera.             So it’s very -- very fluent.

25                          And I have it -- I had it -- I think Gina


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1           has given me copies of it on disk.            Also, on that disk

2           are text versions that you can use without the

3           PowerPoint if you so choose, and a script that

4           corresponds and correlates to each of the slides, and

5           also the most current Clean Water Management Trust

6           Fund fact sheet in the PDF form, which you can print

7           off and use as a handout if you would like to do that,

8           as well.        So, without further ado.

9                           This basically is the first slide that talks

10          about the mission of the Trust Fund, what you are

11          charged to do, the basic goals of the Trust Fund.             I

12          won’t read them because I can trust that you all can

13          read.      It talks a little bit about the background, the

14          fact that we are almost 11 years old, and why we came

15          into being, what our grants do, and a little bit of

16          the background of who the Board of Trustees is

17          comprised of, and the fact that we are not a

18          regulatory agency.            The basic outline of the projects

19          that we fund, our land acquisitions, our restoration

20          work, our wastewater treatment improvements, and

21          stormwater management.           This slide illustrates who we

22          give money to, who the grantees are:            state agencies,

23          local government, conservation, non-profit.            That pie

24          chart there is one that we’ll change as your grant

25          awards change.


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1                           The numbers, how many grants we have made in

2           the last 11 years, the total amount of investment that

3           the Trust Fund has made to clean water in North

4           Carolina, and the fact that it has brought in almost

5           $1.5 billion in other funds that probably would not

6           have come in to the state for Clean Water efforts had

7           it not been for your work.

8                           Overview of where the projects are.       I think

9           that’s a nice slide to include because it shows really

10          that we’re not just in one or two or three separate

11          locations in the state.          A lot of times we get

12          criticism for, “Well, you know, you have certain

13          benefactors in the General Assembly, so that’s where

14          you spend all of your money.”         And this slide shows

15          that that’s simply not true.

16                          Regional funding, again, this goes to that

17          last slide and breaks it down percentage-wise.             I just

18          want to point out that the statewide percentage there,

19          that six percent, those are statewide projects.

20          Projects like CREP, projects like the -- projects in

21          the mountains that eliminates (inaudible), those types

22          of projects.          Also, the number of projects by primary

23          purpose over the last almost 11 years.         And where

24          acquisitions are concerned, these are the big numbers,

25          the numbers of buffers, the numbers of acres that


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1           we’ve protected, the numbers that we have spent in

2           acquiring property to protect water quality.           And yet

3           -- And then it just illustrates some of, what I like

4           to call, our marquee investments, the ones that people

5           know about or have heard about:           Grandfather Mountain,

6           Chimney Rock, DuPont State Forest, and Bird Island.

7           DuPont, Bird Island.           And there’s actually a bird in

8           there, so --

9                           Also, a key component of what we do in the

10          last several years has been to also assist protecting

11          water quality around our military bases as well as the

12          military-based economy in our state.          We have been a

13          key player in that.           Without water quality -- good

14          water quality in the state, we don’t have a healthy

15          economy.        Without our military bases in North

16          Carolina, we also don’t have a healthy economy.

17                          But not all we do is land acquisitions.       We

18          have become a very important tool for local

19          governments.          They have come to depend on us where

20          water quality is concerned.           We have given the lion’s

21          share of our grant monies to the category of local

22          governments which includes counties, municipalities,

23          towns and other local government agencies.          For

24          instance, an example of another government -- local

25          government agency would be the Public Works Commission


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1           in Fayetteville.              And they make up almost half of the

2           grants we gave this year.

3                           In more detail, 142 of those local

4           governments have availed themselves of our funds.

5           Stormwater grants are certainly going to become an

6           area that will be more and more important as

7           communities struggle with that.             Some of our key

8           wastewater projects:              Kinston, Plymouth, Bridgeton and

9           Troy.      The stormwater projects:          the City of

10          Greensboro, Charlotte-Mecklenburg and their Sugar

11          Creek and Little Sugar Creek initiatives, the City of

12          Washington, Fayetteville, and as you saw in my earlier

13          presentation, the City of Wilmington.             Restoration:

14          again, Little Sugar Creek in Charlotte, North River

15          Farms in Carteret County, and Wilson Bay in

16          Jacksonville.           And in the script that goes with this

17          that you all have, there is more detail on all of

18          these projects.

19                          The nuts and bolts, how we do what we do, a

20          lot of people don’t understand that we are 100 percent

21          funded by the General Assembly, and that it is not a

22          dedicated funding resource.             You know, we have made

23          great strides in the last several years in increasing

24          that funding to where we are now at 100 million.

25                          The application process, one application


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1           cycle a year.           The field reps go out, we take a look.

2           The projects are then staff-reviewed, scored and

3           ranked.       Recommendations are made to the Board, and

4           then you make your final decisions.            This shows the

5           competitiveness of that process.             It’s increasing

6           either in actual numbers of applications received or

7           in the amount of money being requested from us every

8           year.      We are getting more and more stormwater

9           applications, as I mentioned earlier.            And so, how

10          that translates into a successful application since

11          the demand and the competition is up, projects really

12          need to clearly demonstrate proposed solutions and how

13          their projects are linked to overall watershed

14          protection efforts.

15                          And matching funds, of course, are always

16          key as well as the ability of the project.             And then

17          the basic, “How do you find more information?”

18          www.cwmtf.net.           And that would be it.    I’ll be happy

19          to take any questions.

20                          Chairman Baddour:      Thank you, Lisa.     I

21          certainly want us to have that.          I think it would be

22          good -- And maybe you have some suggestions to Lisa.

23          But I think it would be good if we as a Board would be

24          willing to speak to some of our rotary clubs and

25          Kiwanis Clubs in the communities where we live.                I


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1           have to be honest with you.           I have now been Chairman

2           of this Board since December, and I have not had one

3           invitation to speak.           That concerns me.   And maybe

4           y'all have a different experience.           What it says to me

5           is that if you were willing to -- as a Board, if you

6           were willing to, and we want to get out there and

7           spread our message a little bit, that we’re going to

8           have to be proactive and maybe ask Lisa to make some

9           calls for us to seek invitations.

10                          And I don’t want to put too big a burden on

11          this Board, and certainly would not ask anybody to do

12          anything they did not want to do.            But it would seem,

13          to me, if each Board member could make a couple

14          presentations a year in a nearby community -- It’s

15          just the kind of thing that, you know, it doesn’t seem

16          like much.         But cumulatively, over a long period of

17          time, it can have an impact for our support.            So,

18          think about that, and we’ll continue to work on that

19          together.        Richard?     Charles?

20                          Mr. Johnson:      Mr. Chairman, I think this

21          would probably be an appropriate time.             I attended the

22          Wastewater Treatment Plant dedication in Kinston.               I

23          wanted to tell you this.           I was proud to be there

24          because one of our former members who worked so hard

25          from getting this thing done was honored at that


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1           particular time.              I just want to report this.    Johnnie

2           Mosley, who is no longer with us, at the time when

3           Hurricane Floyd came through, he was the mayor of

4           Kinston.        And the one thing that was pointed out

5           throughout the day was how hard and how dedicated he

6           was in working and how he persevered in making sure

7           that that occurred.

8                           What made me extremely proud to represent

9           Clean Water was that on that day they named the

10          building, dedicated the building to Johnnie Mosley for

11          his work in doing this.             And I just wanted to report

12          that.

13                          Chairman Baddour:         Thank you.   Thank you,

14          Mr. Johnson.          Thank you.     Okay.   Richard, is that it?

15                          Mr. Rogers:          Mr. Chairman, that does

16          conclude my report.             I do want to say that one of the

17          challenges that all programs have is outreaching

18          education.         It’s difficult to define.       It’s even more

19          difficult to implement.             But I think what Lisa

20          presented is an opportunity for us to provide the

21          citizenry of this state, communities of this state an

22          opportunity to get a little more in depth look at what

23          we do, the good work we do.

24                          And I think one other thing that we need to

25          perhaps add -- and Lisa, I didn’t realize this when we


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1           were initially looking at the presentation -- is the

2           extreme need that we have with regards to water

3           quality protection.            And that the numbers that we have

4           are impressive on the screen.             But the need, as we all

5           know, is many more times what we have put into the --

6           into clean water.             So, I think that might be something

7           else we need to look at.            But I do hope that you will

8           take a look at this presentation.              If you get

9           opportunities, then we’ll try to make opportunities if

10          you wish to present it.            And again, we can personalize

11          it.

12                          One last and parting shot that I do have is

13          with regards to my management style, I hope that all

14          the Board members will take the opportunity to call me

15          if you have any concerns, wishes, desires with regards

16          to your work with the Board, with regards to any

17          administrative needs you have or interest you have, as

18          well.      And my door is always open.         So thank you, Mr.

19          Chairman.

20                          Chairman Baddour:        Thank you for a very

21          fine report.          Mr. Crawley, the Attorney General’s

22          report?

23                          Mr. Crawley:        Thank you, Mr. Chairman.

24          Just one matter to report on, and that concerns Mr.

25          Daniel Willis with Jones County near the town of


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1           Trenton.        No change in the posture of that matter

2           since June.          His complaint has not been served on the

3           Board nor any named defendant.              And we just have to

4           wait and see.           Thank you.

5                           Chairman Baddour:          I think our Executive

6           Director -- the thing maybe he’s most proud of in his

7           life is his family, and he asked if he could introduce

8           his family to the Board.              We decided to do it right

9           before the break so maybe you would have an

10          opportunity to speak with them during the break.                   So

11          Richard, what a treat for us.

12                          Mr. Rogers:           Thank you, Mr. Chairman.

13          It’s quite a personal privilege here.                I do want to

14          introduce my family.              Come on, honey.     You’re not

15          usually so shy.               But my family -- my other family I’ll

16          say -- Because I hope we will, as our relationship

17          grows, we’ll see each other as family.                 And I think of

18          my work as another family, as well.                 But my home

19          family is here today, and I certainly appreciate the

20          opportunity to introduce them.              I’m extremely proud of

21          my children and my wife.

22                          The first one here is John Douglas.           He is

23          four years old now, and he is looking forward to

24          getting in -- I’m looking forward to him getting into

25          kindergarten not this year, but next year.                Some of


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1           the things he likes to do -- What do you like to do,

2           son?      He likes to run.       He’s a little water bug in the

3           pool.      And he enjoys the summers and swimming, as

4           well.      So, John Douglas.

5                           The middle child is my Jackie.      She is --

6           just turned eight years old.            She got her ears pierced

7           for her eighth birthday.            She’ll be going into the

8           third grade.          She enjoys swimming, diving especially,

9           and also some gymnastics, too.            So, Jackie.

10                          Griffin is the ten-year-old, our first

11          child.       He will be going into fifth grade.         He enjoys

12          lacrosse, swimming and football, some extracurricular

13          activities.

14                          And then, my lovely bride of 12 years as of

15          yesterday, Hunter.            And she keeps us all together and

16          is kind of the backbone of our family.

17                          So I just wanted to introduce y'all quickly

18          and briefly to my family so y'all have an idea of what

19          I go home to every evening.            And then, please watch

20          out.      They’ll be cut loose after this and they may be

21          running around a bit.           But I appreciate that

22          opportunity.          Thank you.

23                          (Applause.)

24                          Chairman Baddour:       And thank you.    Thank

25          y'all for being here with us.            We will take a break


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1           now for about 12 minutes until we’ll reconvene at 20

2           minutes of 11.

3                                         (Off the record from

4                                         10:28 A.M. to 10:45 A.M.)

5                           Chairman Baddour:       The next item on the

6           agenda --

7                           Mr. Rogers:        Mr. Chairman, can I interrupt

8           you for one second?

9                           Chairman Baddour:       You can.

10                          Mr. Rogers:        One thing -- While we were

11          acknowledging anniversaries and birthdays and such, we

12          forgot and were remiss to mention is that our esteemed

13          Chairman had a birthday last week, and we do want to

14          acknowledge that and wish him well.

15                          Chairman Baddour:       I want to tell you I am

16          a card-carrying member of Medicare.

17                          Mr. Rogers:        So we wish you the best, Mr.

18          Chairman and thank you much.

19                          Chairman Baddour:       Thank you.    And you had

20          a twelfth anniversary, too.            That slipped in.    So this

21          is -- I don’t know.           August is the month for --

22                          Mr. Rogers:        August is a busy time.

23                          Ms. Cragnolin: What date is your birthday?

24                          Chairman Baddour:       August 5th.   Okay.   In

25          2005, this Board approved a contract with State to


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1           establish a monitoring program to be conducted on a

2           subset of our stream restoration, stormwater and

3           agricultural best management -- BMP?                  What does BMP

4           stand for?         Best management practices -- projects --

5           including an evaluation of some existing projects and

6           more comprehensive monitoring on some recently funded

7           projects.        And we got preliminary information that was

8           presented to the Restoration/Stormwater Committee in

9           October of last year.

10                          We’re going to have a presentation today

11          that will update the Board.               And making the

12          presentation to us is Barbara Doll from North Carolina

13          State University, the North Carolina Sea Grant

14          Program.        Barbara, we’re glad to have you with us and

15          look forward to your presentation.

16                          Ms. Doll: Thank you.

17                          Chairman Baddour:          Barbara Doll,

18          Professional Engineer, P.E.

19                          Ms. Doll: Thank you.            Is that too much?     Can

20          we turn this down?               I can hold it way back.    I’m known

21          for being loud.               Is that better?    Okay.   I have with

22          me here, also, Dan Lyon.               If you’ll raise your hand?

23          They are also at N.C. State University with us.                     Dave

24          Penrose gave the previous project update on this, but

25          him and Dr. Greg James have been in Peru, so that’s


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1           why they cannot be here with you.         So I am going to

2           give you this update.

3                           The main thing I want to focus on is the

4           findings and potential considerations to really --

5           based on the study work that we did, whether the

6           things that we think really came out of that.         I want

7           to just quickly review what was done, even though you

8           saw the presentation before.       I’m going to go very

9           fast to kind of recap your memory on what happened

10          before.

11                          This study involved first a look at existing

12          projects in the ground including 18 stream restoration

13          projects, eight stormwater, and six Ag/BMP.        That’s

14          best management practice projects.        In addition, as

15          part of this grant, we are also working on intensive

16          pre- and post-monitoring of newly funded projects, and

17          that work is ongoing.

18                          The primary objective was to evaluate the

19          project status, determine if the goals were met,

20          identify specific common problems, and provide

21          recommendations to improve future projects.        And

22          that’s the main point of today.

23                          The stream restoration projects, there are

24          18 of these sites that were visited.        Most of those

25          are in the western Piedmont in the mountain part of


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1           the state.         The project -- What we did is what’s

2           called a rapid assessment.                This was a protocol that

3           we developed at N.C. State using some examples out of

4           Maryland and Virginia, other areas.               It was -- We

5           bought out the as-built plans so that we had

6           information about where structures were installed.                 We

7           had detailed information about the site, and we had an

8           eight-member crew that we divided into four two-person

9           teams to look at the physical aspects of the stream,

10          the vegetation.               We had our bug team, that’s macro-

11          invertebrates, and we had a person that was taking

12          photographs of the site.

13                          If at all possible, we tried to have the

14          project managers present to give us additional

15          information about the site.               There is an example of a

16          very hot and sweaty crew.              We have students who

17          usually work in the summer, and that’s not always the

18          most pleasant time.              But --

19                          For the stream assessment protocol we looked

20          at channel condition, the bank and riparian habitat,

21          aquatic insects were sampled.                And we did -- we looked

22          at every structure in every stream restoration project

23          to look at its condition and whether or not it was

24          performing its functions.               There’s quite a bit of

25          variability in the data.               In particular, the stream


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1           sites that were looked at.              There were five urban

2           streams and 13 rural projects, so we covered the full

3           gamut of development of watershed.

4                           Some -- Two of the projects were less than

5           two years old, but most of the projects were older

6           projects that had been in the ground for a while.                  The

7           catchment sizes, four of them had a watershed of less

8           than one square mile, but most of them were larger --

9           a little bit larger streams.              And many projects had

10          some repair work done on them.              That was a common

11          theme that had occurred at the sites.

12                          I want to point out that this is only an “N”

13          of 18 sites, so there’s not really a lot of

14          statistically valid conclusions you can make from

15          that.      So, a lot of what we’re going to tell you is

16          based on professional judgment.               Although, we did have

17          a scoring of the projects.

18                          Okay.         The general results of the work.

19          Most of the projects we found met the intended goals.

20          However, I want to point out the goals were not very

21          -- they were kind of vague.               They were not very

22          detailed or well-defined or specific.               But in general,

23          they said we were going to bank erosion or stop bank

24          erosion. That was -- That was done.               That was

25          successfully completed.


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1                           Some other observations, we had some poor

2           riparian vegetation on some of the sites, in

3           particular because of problems with mowing on some of

4           these.       So there may be some maintenance issues for

5           that.      We found that aquatic insects were recolonizing

6           on the site.          But -- However, complete recovery has

7           not occurred.           We’re not certain how long that process

8           will take.

9                           We saw problems with sedimentation from

10          upstream.        We saw very good stream restoration

11          projects for the upper reach that heavily impacted

12          things out of control with that project site.                Stream

13          bank erosion was still occurring in certain critical

14          areas of some projects, and there were some structure

15          failures.        Some may be due to design; some may be due

16          to construction.              But we saw some failures.   We do

17          feel that long-term intensive monitoring is necessary

18          to evaluate ecological success.             You can’t really

19          conclude.        The jury is still out on that.

20                          The possible maximum score for each site was

21          180, and you can see our scores range from about 90 to

22          157.      So overall, this project scored pretty decently.

23          You can see the gray bars are the urban projects,

24          whereas the purple bars -- or blue depending on your

25          perspective -- are the rural projects.              Okay.    That’s


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1           very quickly the results from that.

2                           Now, I’m moving on to stormwater project

3           sites.       There were eight stormwater project sites

4           visited.        We did a similar scoring system as the

5           stream.       So, we developed our own scoring protocol for

6           what we would review at these sites.                Many of the

7           project sites had more than one best management

8           practice.        So overall, there were actually 20 BMPs

9           that were evaluated in the project.               Here’s just the

10          picture collage of all those sites.               As you can see,

11          they range from all over the state.

12                          And here’s the scoring on that.          There’s a

13          possible maximum score of 25.              Four of the sites got

14          what was considered a superior score, greater than 20

15          points.       Eleven of the sites had excellent scores,

16          between 15 and 20.              Three of the sites showed some

17          areas of concern where there was some need to address

18          some problems.           And then finally, only two of the

19          sites were what were considered actually failing or

20          minimally addressing the stormwater issue.               So

21          overall, out of these 20 BMPs, only two of them were

22          having some significant problems.                Most of them were

23          doing what they were intended to do, so that was good

24          news.

25                          Okay.         Now, moving into the potential


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1           considerations.               Really, we’re going to focus in on

2           three area -- aspects of the project work.               And they

3           are the project selection, project development and

4           implementation, and the project monitoring and

5           maintenance.          We broke it out into these three

6           different phases of the life of a project for Clean

7           Water Management Trust Fund.

8                           Potential considerations for selection.

9           Based on thorough assessment of problems and solutions

10          for clear and attainable water quality goals.               So

11          remember, I mentioned that the goals were vague.                 We

12          need to have better defined, kind of measurable goals

13          and objectives out there.

14                          Technical review of the proposed solutions.

15          Oftentimes, you may get a proposal, and depending on

16          municipality, non-profit, whoever is proposing that,

17          they might have just jumped on a solution.              And some

18          of the projects we found that maybe that wasn’t the

19          appropriate solution.              Maybe a more full-blown project

20          was warranted, or maybe they just really should have

21          fenced cattle out.              So making sure that they have

22          looked at all the -- making sure they pick the right

23          solution for that location and that water quality

24          issue.

25                          Target watersheds were the greatest


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1           potential for water quality improvement and community

2           support.        And so basically, instead of just kind of

3           shotgun approach all over, maybe try to look at some

4           targeted areas where you really get a lot of bang for

5           the buck.

6                           Coordinating with DWQ, EEP, NRCS watershed

7           planning and assessment programs.           Really, this is

8           building on that previous consideration to look at

9           some of the planning efforts.         In addition, the EPA

10          319 work, EEP, there may be some focus target

11          watersheds where money can be put in that.          And then

12          the whole -- everything working to get it to really

13          come out to some huge success stories.

14                          Comprehensive approach to address all

15          problems:        stream stability, water quality, habitat,

16          stormwater, wastewater, and sediment.          Remember, I

17          mentioned some really good stream restoration projects

18          that had heavy sediment impacts at the upstream

19          corridor third of that stream.         So, it would have been

20          better to maybe have done some Ag/BMPs, and some

21          project stormwater issues needed to be addressed.             So

22          trying to make the projects as comprehensive as

23          possible so we really achieve that water quality

24          benefit we’re looking for.

25                          All right.    Other considerations for project


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1           development and implementation stage of the game.

2           Feasibility of design options really should be done.

3           Getting back to that, that that person writing the

4           grant may have just jumped on one solution.           Rather,

5           let’s back up and consider:           What is the water quality

6           problem here?           What is the setting?   What are the

7           different options, and what is going to be most

8           appropriate?          Is it for one to fence cattle out, or do

9           we need to do a full-blown meandering stream regrade,

10          floodplain, everything?

11                          Technical review of designs and construction

12          documents.         I know we rely on the engineers to provide

13          us with good quality designs, but that’s not always

14          the case.        So it would be better to have some type of

15          peer review, someone specifically with knowledge about

16          the type of BMP and the area it’s being done in.

17          Also, I know we get some of that through 404 and 401

18          permitting.          But oftentimes, they may be too busy to

19          really evaluate these projects.          So ensuring we’re

20          getting that technical review.

21                          Selection of a qualified construction

22          contractor.          I mentioned some of the structure

23          failures we believe were due to poor construction.

24          It’s really necessary or would be good to have some

25          requirements there to make sure you are getting


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1           experienced contractors who have done this type of BMP

2           or this type of restoration work before they know what

3           they’re doing.           EEP has some different requirements in

4           their bids packages that may be a good example to

5           follow.

6                           Inspection of final construction before the

7           final payment is made.          Basically, whoever the

8           designer is could be required to go out and do this

9           inspection.          Therefore, they are going to really

10          ensure that they are signing off that everything is

11          done properly.           There’s going to be a little bit of

12          liability to them almost to make sure it’s all done as

13          designed and is working properly.

14                          Finally, the project monitoring and

15          maintenance, kind of the last stage of the life of the

16          project.        As we have said before, requiring that long-

17          term monitoring and performance inspection.             In

18          particular, this shows up in some of the stormwater

19          BMPs, the projects that were kind of built in remote

20          areas and nobody ever went out and spoke to them, many

21          weren’t really looking too good.             The ones that had

22          that regular inspection -- Because somebody is going

23          to go out there and check on it and say, “Oh, the

24          outlet structure is clogged or damaged.”            And then,

25          they’re going to report that to the landowner, or the


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1           municipality, or the non-profit, or whoever.               And then

2           usually -- there is generally work to repair or

3           correct problems.

4                           But if nobody is going out there, nobody is

5           ever revisiting this for monitoring or maintenance

6           inspection -- there’s not much going to happen.                It’s

7           just going to kind of dwindle away.               Establishing a

8           maintenance plan with funding.              And this may be

9           required.        This may be a match requirement of whoever

10          you’re giving the grant to that you say, “What’s the

11          maintenance plan, and how are you going to fund it?”

12          So, that’s something to think about to ensure that

13          long-term proper function and maintenance of this BMP.

14                          Okay.         Finally, the Ag/BMP project sites are

15          kind of tagged on here at the last.               And Dan Lyon did

16          this work.         There were six Ag/BMP projects evaluated.

17          Not all of the sites were visited.               There was a

18          questionnaire that was administered over the phone to

19          many of the project managers on this.               And some of the

20          typical BMPs were visited because there was not an

21          ability to see all these because not each project had

22          multiple aspects to it.

23                          Projects that focused on livestock exclusion

24          provided the greatest water quality benefit.               That was

25          one of the professional and subjective conclusions


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1           from this -- from Dan.              Projects that focused on

2           erosion control and improved drainage appeared to have

3           a lesser water quality benefit.             Again, this is not

4           anything based on data.             This is just subjective from

5           this.

6                           Water quality monitoring conducted by

7           project should have a relatively simple objective

8           plan.      Some of these projects have done some

9           monitoring.          There was varying degrees of quality to

10          that monitoring.              The main point here is the ones that

11          were really simple monitoring, clear and direct

12          objectives, that those produced the most valuable

13          results from the monitoring.             Most of these people

14          applying for these grants really don’t have the

15          experience to do a very detailed, highly-technical

16          monitoring plan.              So, keep it simple.

17                          Fixed-duration easements were generally

18          accepted, but permanently -- permanent easements were

19          not.      So, I guess the main point is there is most

20          landowners are scared of that permanent easement, and

21          are willing to take part in the more short-term

22          agreements or a fixed duration.

23                          And finally, cost share of non-traditional

24          BMPs provided water quality benefits.               This is in a

25          case where Clean Water money was used as kind of a


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1           cost share to other Ag cost share money, but the

2           projects were non-traditional.             They’re not what Ag

3           cost share programs would fund, so the people came to

4           Clean Water to fund them.             These things turned out to

5           be good, in general.             So in other words, this is

6           something you’re already doing, and we think it should

7           be continued.

8                           So in other words, many of the things I have

9           said, you have already been pursuing those, so it’s a

10          matter of reinforcing these things.             And then there

11          may be some additional new items that you want to

12          consider.        Maybe you kind of have had a little

13          discussion already about it, and this might help you

14          to make some decisions.

15                          Thank you very much.       Any questions?     Also,

16          Laura or Dan, did you have anything to add to that?

17          Did I skip anything or --

18                          Chairman Baddour:        Let me say before the

19          questions, we’re going to refer this to our

20          Restoration/Stormwater Committee and ask you to look

21          at this in depth.             I think this is a very, very

22          important presentation, and one that we as a Board

23          have got to take very, very seriously.             You know, we

24          have -- Well, anyhow.             Monitoring may be important,

25          not just for acquisition projects, but for other


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1           projects, too.           Questions?     Karen?

2                           Ms. Cragnolin: Can this -- Can we get copies

3           of this?

4                           Chairman Baddour:          Can we get copies of

5           your presentation?

6                           Ms. Doll: Yes.

7                           Chairman Baddour:          Yes.    We’ll have those

8           sent to all the Board.

9                           Ms. Cragnolin: Thanks.

10                          Chairman Baddour:          Okay.

11                          Mr. Markham:          If it’s possible, could we

12          get a copy of the report you’ve generated?

13                          Ms. Doll: Yes.

14                          Mr. Markham:          Great.   Okay.   Thanks.

15                          Ms. Doll: And the website, I think, has a

16          lot of the photographs that were compiled.                A lot of

17          the information is there as well.

18                          Chairman Baddour:          If -- How long is the

19          report -- the full report?

20                          Ms. Doll: I think it’s about -- It has got a

21          large appendix.               The report itself is only --

22                          Chairman Baddour:          Okay.    Do you have it

23          all electronic?

24                          Ms. Doll:         Uh-huh (yes).

25                          Chairman Baddour:         Okay.    Well, any member


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1           that wants it, then you can check with Beth and we’ll

2           -- you can -- we’ll send it to you electronically,

3           Okay?      Any questions?             All right.

4                           This is -- I’ll tell you.            I think this

5           whole subject is -- We need to start making a list of

6           things that you want to talk about at our retreat.

7           And it seems, to me, that this might very well be one

8           of them.        And maybe y'all can start thinking about

9           others, too.          But we need to take this report very,

10          very seriously.               Okay.   Karen?

11                          Ms. Cragnolin: I would be real interested

12          after the committees have had a chance to look at this

13          to see broken down the recommendations about what

14          could be added to the contracts to --

15                          Chairman Baddour:              Exactly.

16                          Ms. Cragnolin: -- sort of make that happen.

17          Or, what is reasonable additional duties if they’re

18          not already being done by our staff.                  You know, and

19          then what is not -- what just is beyond our scope, and

20          then we could talk about some of that.

21                          Chairman Baddour:              Absolutely.   Absolutely.

22          We should think about what -- how we should change our

23          best management practices.                And I hope that, Barbara,

24          that you and your team would be available to meet with

25          the committee and to go over it in more detail with


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1           the committee itself.          And thank you very much.

2                           Ms. Doll: You’re welcome.

3                           Chairman Baddour:     Okay.   Very important.

4           I don’t know if we need to formally amend the agenda

5           again or not, but the next item on the agenda is the

6           committee report from Restoration and Stormwater.              And

7           as you know, today we will be asked to take action to

8           actually begin to award grants.          And yesterday morning

9           the committee chairs met and have a recommendation to

10          this Board for an initial allocation.           And we need to

11          do that, of course, to make that allocation to the

12          committees before a committee can make a

13          recommendation.

14                          So, without objection we will amend the

15          agenda to take up the question of an initial

16          allocation.          And Beth, could you put that on the

17          board, the recommendation?          Okay.   Yes, you can do

18          handouts.        Please.

19                          We’re working from the $107 million -- $100

20          million that was available.          I will make this report.

21          I chaired that meeting of the committee chairs.            The

22          thought was -- is that we would hold in reserve 20

23          percent, and then allocate 80 percent of the 107.              And

24          if you go down and look at the second block, if you

25          would, so that we would go ahead and allocate today


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1           $86,160,000, which would leave in a reserve for

2           November $21,540,000.

3                           The idea would be that the reserve would be

4           used to fund whatever this Board in its discretion

5           decided to do, the best projects or the projects that

6           you felt were most important that were not able to be

7           funded by the committees.           And the recommended

8           allocation -- and I’m going to use it as a percent of

9           the $86 million -- was 1) to acquisition, 50 percent

10          or $43,080,000; 2) to wastewater, 31 percent or

11          $26,925,000; and 3) to restoration/stormwater, 19

12          percent or $16,155,000.           That is fairly close to our

13          historic percentages.

14                          So, any discussion or comment about this

15          proposed allocation?           Mr. McMillan?

16                          Mr. McMillan:     Mr. Chairman, did you take

17          into account the $100 million that the Rural Center

18          received from this General Assembly for wastewater --

19          primarily wastewater projects?

20                          Chairman Baddour:      We were aware of that,

21          Mr. McMillan.           But, I mean, we still have our

22          applications before us, and I think the feeling is

23          that these people are -- the applications are before

24          us and are ready to go.           And you remember now when we

25          get to next month, that we’re only going to be funding


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1           planning and design of the projects unless they are

2           actually ready for construction.             And also, you know,

3           we have a $3 million limit.          So --

4                           Mr. McMillan:     Yeah.     The question is:         Are

5           some of these applicants also applying to the Rural

6           Center?       We’ve had dual applications in the past, and

7           sometimes they fund it, and sometimes we fund it,

8           sometimes we both fund it.

9                           Chairman Baddour:         I don’t -- My guess is

10          that it’s so new that that just hasn’t been looked at.

11          And, of course, the committee will have to look at it

12          when that comes up.           But we really have not taken that

13          into account in making the assignment.                 Do you

14          remember we had an historic, both in number and

15          amount, of applications for wastewater projects this

16          time?      And were it not for the fact that this Board

17          had made the decision to fund planning and design, we

18          would be in real trouble.          So --

19                          Mr. Hollan:       Do we -- Do we think there

20          are $27 million worth of planning and design requests?

21                          Chairman Baddour:         Well, yes.    And it’s not

22          -- It’s going to be close, but at least the initial

23          look at it -- it’s not all just planning and design.

24          There are some projects that are actually -- are

25          ready.       But it -- That is not too much money for


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1           wastewater, if that’s the question that you’re asking.

2                           Mr. Hollan:      That was the question, I

3           guess.       Given the fact that we are trying to do phase

4           funding rather than --

5                           Chairman Baddour:     Yeah.

6                           Mr. Hollan:      -- trying to encumber a lot

7           of money.        That takes a lot of time.

8                           Chairman Baddour:     Yeah.   I asked for a

9           preliminary figure, and this doesn’t take into account

10          whether the -- how the project will score and what

11          have you.        But Larry, do you have that figure?     I

12          think you gave that to me yesterday.          The question was

13          -- is if you funded -- Well, I forgot how we ask it.

14          If you funded all of the projects that are eligible,

15          and again funded planning and design only, if that was

16          what was appropriate, how much money would you need?

17                          Mr. Horton:      I do not have that number

18          with me, but I have a pretty -- pretty good idea of

19          what it is.          Francine and I did a really, really rough

20          estimate and took into account only funding

21          engineering and design, and it was $31 million,

22          something very close to that.         And I think the total

23          request this time is 78 million.

24                          Chairman Baddour:     Okay.

25                          Mr. Beane:       Mr. Chairman?


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1                           Chairman Baddour:       Questions, discussion?

2           Yes, Ron?

3                           Mr. Beane:       I would like to make a

4           motion.

5                           Chairman Baddour:       Yes, sir.

6                           Mr. Beane:       I would like to make a motion

7           we approve this funding recommendation as presented

8           for the 2007 cycle awards.

9                           Chairman Baddour:       Okay.   You’ve made the

10          motion.       Second?

11                          Mr. Vaughan:     Second.

12                          Chairman Baddour:       Discussion?

13                          (No response.)

14                          Chairman Baddour:       Hearing none, so many as

15          favor the motion, signify by saying, “Aye.”

16                          Members:         Aye.

17                          Chairman Baddour:       Opposed, “No.”

18                          (No response.)

19                          Chairman Baddour:       The ayes have it.   And

20          thank you very much.

21                          Ms. McGee:       Who made the second?

22                          Chairman Baddour:       The second was Stan

23          Vaughan.

24                          Ms. McGee:       Thank you very much.

25                          Chairman Baddour:       Okay.   Now you’ve got


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1           your money, Madame Chair and Co-Chair.           We’ll now call

2           on the Restoration Stormwater Committee for its

3           support.

4                           Ms. Brannon:      I wanted to thank all the

5           committee members for joining us yesterday.           And I

6           really want to thank Stan Vaughan and Charles Johnson

7           and Phil Baddour who sat in and served on the

8           committee since we had so many honeymooners absent

9           yesterday.         And we’re going to try to go over this

10          quickly.        The -- I’m going to present these to the

11          Board for consideration in groups.           The first two

12          parts, as you know, were already voted on through your

13          consent agenda, the two withdrawals.

14                          The committee encourages the following

15          applications.           We would like them to re-apply in the

16          -- Does everyone -- Richard thinks that you might not

17          be looking at your sheet that’s in front of you.             See,

18          he shortchanged you, didn’t he?          Okay.   In case you

19          weren’t looking, would you please look?           And we will

20          go through these projects.          And I would like to

21          remind, as we vote on this next group of projects,

22          that Mr. Markham has asked that he be recused from

23          2007-421, just a reminder.

24                          The following projects the committee is

25          recommending to the Board that we ask those folks to


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1           re-apply in the 2008 cycle.          2007-410, the North

2           Carolina Department of Stormwater Conservation,

3           restoration/CREP project; 2007-07, the City of

4           Kinston; 2007-421, Robeson County; 2007-709, the City

5           of Lumberton, restoration project; 2007-422, the Town

6           of Selma; 2007-416, the Resource Institute,

7           restoration of Buchanan Park.          That’s the committee’s

8           recommendation.

9                           Chairman Baddour:     Okay.   Committee

10          recommendation, I think, customarily does not require

11          a second.        Any discussion?

12                          Mr. Hollan:      Mr. Chairman?

13                          Chairman Baddour:     Yes?

14                          Mr. Hollan:      I was just going to tell Ms.

15          Brannon, I think that for the matter of where Mr.

16          Markham has recused himself, you need to vote

17          separately.

18                          Ms. Brannon:     We’ll pull that one

19          separately.          That’s what I was trying to do.

20                          Chairman Baddour:     Which one is that?

21                          Mr. Hollan:      Robeson County.

22                          Ms. Brannon:     2007-421.    Let’s do not vote

23          on that one, and vote on the remaining, please, sir.

24                          Chairman Baddour:     All right.   We’ll vote

25          on all of those listed, 410, 707, 709, 422 and 416.


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1                           Ms. Brannon:      Yes, sir.

2                           Chairman Baddour:        Any discussion on those?

3                           (No response.)

4                           Chairman Baddour:        All right.   The

5           committee recommendation is to encourage the applicant

6           to re-apply in 2008 and, in effect, deny the

7           application for this cycle.

8                           Ms. Brannon:      Yes, sir.

9                           Chairman Baddour:        Okay.   Discussion?

10                          (No response.)

11                          Chairman Baddour:        Hearing none, so many as

12          favor the motion, signify by saying, “Aye.”

13                          Members:          Aye.

14                          Chairman Baddour:        Opposed, “No.”

15                          (No response.)

16                          Chairman Baddour:        The ayes have it.     Now,

17          the same motion with regard to 2007-421 by the

18          committee that that applicant be encouraged -- deny

19          the application and encourage the applicant to re-

20          apply.       And on this one, Mr. Markham will not be

21          participating.           Is there any discussion?

22                          (No response.)

23                          Chairman Baddour:        Hearing none, so many as

24          favor the motion, signify by saying, “Aye.”

25                          Members:          Aye.


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1                           Chairman Baddour:         Opposed, “No.”    Madame

2           Chair?

3                           Ms. Brannon:       The next block of projects

4           are projects that the committee -- I’m sorry.                 Is my

5           microphone on now?            Thank you, Kevin.   Committee

6           recommends that these applications remain eligible for

7           consideration in November.           They’re -- And these

8           projects are the 2007-412, Pilot View; 2007-711, City

9           of New Bern; 2007-710, the North Carolina Department

10          -- Division of Stormwater Conservation, stormwater

11          project; 2007-413, the Pilot View RC&D, the

12          restoration of West Fork Linville; 2007-424, the

13          Western North Carolina Alliance on the Watauga site;

14          and 2007-414, the Poke restoration project.                That’s

15          the committee’s recommendation.

16                          Chairman Baddour:         Any discussion?

17                          (No response.)

18                          Chairman Baddour:         Hearing none, so many as

19          favor the motion, signify by saying, “Aye.”

20                          Members:           Aye.

21                          Chairman Baddour:         Opposed, “No.”

22                          (No response.)

23                          Chairman Baddour:         The ayes have it.

24          Madame Chair?

25                          Ms. Brannon:       Mr. Chairman, we would like


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1           to recommend the following projects for funding.               I am

2           going to read you five applicants’ numbers and ask you

3           to not consider these in this block I’m reading.

4           We’ll vote on these separately since -- Or maybe if it

5           would be okay with you -- maybe I would like to vote

6           these -- do these first --

7                           Chairman Baddour:      That would be good.

8                           Ms. Brannon:      -- and then we’ll vote the

9           rest of them?

10                          Chairman Baddour:      That’s good.

11                          Ms. Brannon:      The first one I would like to

12          say is 2007-714, Mr. Markham has recused himself from

13          voting on this project.           The committee recommends

14          funding of this project for the City of Raleigh Pigeon

15          House Branch restoration.

16                          Chairman Baddour:      You want to do that

17          separately?

18                          Ms. Brannon:      Yeah, I would like to do that

19          now, sir.

20                          Chairman Baddour:      All right.

21                          Ms. Brannon:      Is that okay?

22                          Chairman Baddour:      You’ve heard the

23          committee?         Motion?    Some discussion?

24                          (No response.)

25                          Chairman Baddour:      So many as favor the


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1           motion, signify by saying, “Aye.”

2                           Members:          Aye.

3                           Chairman Baddour:         Opposed, “No.”

4                           (No response.)

5                           Chairman Baddour:         The ayes have it.

6                           Ms. Brannon:      I would like to --

7                           Mr. Hollan:       Mr. Chairman, do we read into

8           the minutes the amount that we’re recommending

9           funding, or is she giving it as an attachment?

10                          Chairman Baddour:         Well, we’ll give -- We

11          will give this sheet as an attachment.              I think that

12          will be sufficient.           But go ahead in the future, and

13          we’ll put the amount in there.

14                          Mr. Hollan:       Thank you.

15                          Ms. Brannon:      Okay.

16                          Chairman Baddour:         And let -- We’ll let

17          this sheet be attached to the minutes as an exhibit.

18                          Mr. Hollan:       If we do that, I’m fine.          I

19          didn’t know that we had done that in the past.

20                          Chairman Baddour:         Okay.   Well, we may not

21          have, but we’ll certainly do it this time.              Okay.

22                          Ms. Brannon:      Okay.    Now, we would like to

23          vote separately on 2007-708 on your next page.                Mr.

24          Ron Beane has asked that he be recused and not vote on

25          this applicant.


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1                           Chairman Baddour:        Okay.   Any --

2                           Ms. Brannon:     The committee recommends the

3           City of Lenoir stormwater project for 311,000.

4                           Chairman Baddour:        Okay.   You’ve heard the

5           motion.       Discussion?

6                           (No response.)

7                           Chairman Baddour:        Hearing none, so many as

8           favor the motion, signify by saying, “Aye.”

9                           Members:         Aye.

10                          Chairman Baddour:        Opposed, “No.”

11                          (No response.)

12                          Chairman Baddour:        The ayes have it.

13                          Ms. Brannon:     Okay.    So then I have -- The

14          next three projects we’ll vote on together because

15          they are ones that Mr. Markham also has asked to be

16          recused on.          If you’ll look a little further down in

17          your sheet, 2007-415, the City of Raleigh; 2007 --

18          which -- for the amount of $323,000; 2007-419, the

19          RiverLink project for the amount of $440,000; 2007-

20          420, RiverLink restoration project, $755,000.               The

21          committee recommends funding for these three projects.

22                          Chairman Baddour:        And I think Ms.

23          Cragnolin also is recused on those, too.

24                          Ms. Brannon:     She is recused herself for

25          419 and 420, correct?          Okay.    Thank you.


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1                           Chairman Baddour:       Okay.   You’ve heard the

2           motion.         So many as favor -- I mean, any discussion?

3                           (No response.)

4                           Chairman Baddour:       Hearing none, so many as

5           favor the motion, signify by saying, “Aye.”

6                           Members:         Aye.

7                           Chairman Baddour:       Opposed, “No.”

8                           (No response.)

9                           Chairman Baddour:       The ayes have it.

10                          Ms. Brannon:     If you will turn back to the

11          front page, and we’ll begin at the top of those

12          projects now that we’ve got our recusals out of the

13          way.      The first project --

14                          Mr. Hollan:      Madame Chairman, excuse me.

15          Can I vote on 2007-425 for Winston-Salem?

16                          Chairman Baddour:       Okay.   Let’s take that

17          one separately.

18                          Ms. Brannon:     You did say that earlier, and

19          I’m very sorry that I skipped that.             The committee

20          does recommend funding the Winston-Salem -- City of

21          Winston-Salem stormwater project in the amount of $3

22          million, and that is our recommendation.

23                          Chairman Baddour:       And that’s 2007-425?

24                          Ms. Brannon:     Yes, sir.

25                          Chairman Baddour:       Okay.   Discussion?


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1                           (No response.)

2                           Chairman Baddour:       Hearing none, so many as

3           favor the motion, signify by saying, “Aye.”

4                           Members:         Aye.

5                           Chairman Baddour:       Opposed, “No.”

6                           (No response.)

7                           Chairman Baddour:       The ayes have it.

8                           Ms. Brannon:     Are there any others that I

9           have overlooked before I move forward?           All right.

10          Thank you.         So we’ll go back to page one again, and

11          we’ll start at the top.          And the first project we have

12          here is 2007-411, the North Carolina Division of Soil

13          and Water Management.          This is for the Swine Buyout

14          program.        And if you’ll please look over to the right,

15          you will see that we are -- the committee is

16          recommending funding at this time $3 million of this

17          project.        The committee is also recommending that

18          $1,229,000 be -- remain eligible for consideration in

19          November.        And perhaps we should just vote on that,

20          Mr. Chairman, since it has two components to it.

21                          Chairman Baddour:       All right.   Any

22          discussion?

23                          (No response.)

24                          Chairman Baddour:       Hearing none, so many as

25          favor the motion, signify by saying, “Aye.”


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1                           Members:           Aye.

2                           Chairman Baddour:          Opposed, “No.”

3                           (No response.)

4                           Chairman Baddour:          The ayes have it.

5                           Ms. Brannon:       Okay.    And now I’ll read

6           these in full.           2006A-409, restoration Resource

7           Institute project.            We’re recommending funding of

8           $456,000.        2007-404, the Camp Mecklenburg County

9           Little Sugar Creek restoration, Phase 9, $615,000;

10          2007-408, the North Carolina Sea Grant restoration

11          Rocky Branch project, we’re recommending for $449,000;

12          2007-402, the Ellerbe Creek Watershed Association.

13          This is the Ellerbe Creek in Durham.              We’re

14          recommending for $411,000.

15                          If you’ll switch over to the next page?

16          2007-701, City of Albemarle project -- stormwater

17          project for $174,000; 2007-407, the National Committee

18          for the New River.            This project has been recommended

19          for $238,000.           2007-703, the Town of Boone, a

20          stormwater project we’re recommending for $178,000.

21          2007-706, the Town of Grifton, we’re recommending

22          $201,000.        2007-809, Centralina COG, we’re

23          recommending to fund them at $121,000.              Carolina Beach

24          -- 2007-808, Carolina Beach, we’re recommending for

25          $35,000.        It’s a planning grant.        2007-704 for the


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1           Durham stormwater project on Rocky Creek, and that

2           project has been recommended for $163,000.           2007-705,

3           the City of Gastonia, a stormwater project, we’re

4           recommending $59,000.         2007-418, the Resource

5           Institute project on Pine Orchard Creek, we’re

6           recommending for $146,000.         2007-810, Franklin County,

7           a planning grant for $45,000.         2007-409, the North

8           Carolina Division of Soil and Water Conservation,

9           French Broad watershed for $186,000.           2007-417,

10          Resource Institute, $303,000 for the Hitchcock Creek

11          restoration.          2007-423, the Southwestern RC&D, a

12          restoration.          This is an animal buyout restoration

13          project.        This would be for funding at 504 --

14          $504,000.        2007-805, the Dan River Basin Association,

15          a planning watershed assessment project for $18,000.

16          2007-812, N.C. State University planning and storm --

17          planning and stormwater grant on Burnt Mill Creek for

18          $62,000.        2007-715, the Town of Swansboro for

19          $335,000.        2007-807, Atlantic Beach, a planning and

20          stormwater restoration grant for $50,000.

21                          If you’ll turn your page?      2007-406, the

22          National Committee for the New River, the East Fork

23          New River restoration, $214,000.            2007-806, a Piedmont

24          Triad COG on the Rich Fork Creek, $80,000.            2007-403,

25          Four Rivers RC&D, Roanoke Tributary for $670,000.


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1           2007-712, Town of Newland for a stormwater/

2           bioretention project on the North Toe River for

3           $35,000.        2007-401, Banner Elk on the Shawneehaw River

4           -- Creek restoration project for $367,000.                2007-405,

5           National Committee for the New River on Boone Creek

6           for $27,000.          That’s the recommendation of the

7           committee.

8                           Chairman Baddour:        Okay.    You’ve heard the

9           recommendation of the committee.            Is there any

10          discussion?

11                          Mr. Markham:     I would like to make one

12          comment.

13                          Chairman Baddour:        Yes.    Kevin?

14                          Mr. Markham:     I would like to go on the

15          record that I support the committee recommendations,

16          being on the committee.          However, I will point out

17          that 2007-705, I believe I voted against in the

18          committee yesterday.          And the reason being that I view

19          it as subsidizing new development.               And just I would

20          like to have it on the record.

21                          Ms. Brannon:     What was that number again?

22                          Mr. Markham:     2007-705.

23                          Ms. Brannon:     Okay.

24                          Mr. Markham:     The City of Gastonia where

25          we’re being asked to subsidize new development by


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1           implementing stormwater measures for an ongoing new

2           development.

3                           Chairman Baddour:       I would like to -- Well,

4           does the Board want to hear any more about that

5           project in particular?         Is that something you would

6           like to pull out and vote on separately?             I don’t know

7           how many members of the Board were here and heard that

8           presentation yesterday.          We did look at that in some

9           detail.

10                          Mr. Hollan:      Mr. Chairman, I request that

11          we review that project if we can, and vote on it

12          separately.

13                          Chairman Baddour:       All right.   We will --

14          What number is that?

15                          Ms. Brannon:     705 on the first page.       2007-

16          705.

17                          Chairman Baddour:       Okay.   We’ll vote on --

18          Let’s consider this vote on all but 705, okay?

19                          Ms. Brannon:     Yes, sir.

20                          Chairman Baddour:       All right.   Any

21          discussion?

22                          (No response.)

23                          Chairman Baddour:       Hearing none, so many as

24          favor the motion, signify by saying, “Aye.”

25                          Members:         Aye.


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1                           Chairman Baddour:        Opposed, “No.”

2                           (No response.)

3                           Chairman Baddour:        The ayes have it.     All

4           right.       Let’s go back and look at that Gastonia

5           project.        Maybe staff could give us a look at that

6           project.

7                           Mr. Schumak:      Yes.   This is the City of

8           Gastonia’s project.           It originally came in at

9           $119,000.        It is currently being requested at $59,000.

10          Go ahead and go to the next slide.             Okay.    It’s

11          essentially located in Gaston County.            Next slide.

12          Again, they’re asking for $59,000 of $126,000 project.

13          It’s essentially a stormwater BMP that’s being

14          proposed.        Gastonia is under Phase II stormwater.

15          This was a situation where the development was

16          permitted several years ago.

17                          Some of the homes that are in there now --

18          Gastonia has moved forward and does now have a

19          restriction such that any new development after

20          September of this year would require the developer to

21          pay for the stormwater BMP.           Here is a -- This is the

22          existing, essentially, a retention pond.               There is

23          some of the homes in here currently.             There are more

24          homes going through here.           Again, it was permitted

25          several years ago, and it’s essentially grandfathered.


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1           Gastonia now has a stormwater restriction for new

2           development, so anything after September of this year

3           the developer would have to pay for.

4                           Next slide.       Go ahead and go to the next

5           slide.       It is going to capture some stormwater of the

6           existing street.              That’s McGill Creek.      And if you --

7           Can you go back to the text slide?                  Right there.     I

8           did mention the new development.                There is a

9           restriction.          The reason the price came down from $119

10          -- the developer is donating the land for the BMP.

11          Let’s see.         That’s about it.         And I will take any

12          questions if there is any.

13                          Chairman Baddour:           Questions?

14                          (No response.)

15                          Chairman Baddour:           All right.    Any

16          discussion?

17                          (No response.)

18                          Chairman Baddour:           Okay.    The motion from

19          the committee is to fund this project in the amount of

20          $59,000.        So many as favor the motion, signify by

21          saying, “Aye.”

22                          Members:             Aye.

23                          Chairman Baddour:           Opposed, “No.”

24                          Mr. Markham:         No.

25                          Chairman Baddour:           Okay.    Okay.   Three noes


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1           and -- Raise your hands, the ayes, if you would?

2           Fourteen in favor.            Okay.    I would just like to point

3           out then that the total amount that we have approved

4           for funding is $15,081 -- $15 million -- $15,081,000.

5           Okay.      So actually, the committee -- it’s about a

6           million less than it’s -- than its allocation.               But

7           they have a number of projects that will remain open

8           for November to be considered either from the

9           remaining part of their allocation or from the

10          reserve.

11                          I want to thank the Chair and the committee

12          for a very, very fine job.              I want to thank our staff,

13          and, in fact, this whole Board.               You know, in a way

14          this is -- this is a change.              This is the first time

15          that we have actually made a funding decision in

16          August.       And I think it’s interesting that we did it

17          within a couple of weeks of the date that the General

18          Assembly adopted the budget and made those funds

19          available to us, and so we’ll see how it goes.               But I

20          think on this new program that we’re on, we’re off to

21          a good start.           So, I thank everybody for their great

22          work.

23                          Ms. Brannon:          Mr. Chairman?

24                          Chairman Baddour:          Yes?

25                          Ms. Brannon:          May I please say one thing?


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1                           Chairman Baddour:         You may.

2                           Ms. Brannon:         I really, really thank Kevin

3           Boyer for really -- He has worked with me all last

4           week and all through the weekend really on this whole

5           thing, and I really appreciate his help in advising,

6           keeping me on track.              Of course, it goes unsaid that,

7           you know, Nancy and Tom were right there beside him,

8           but I really appreciate his help.

9                           Chairman Baddour:         Thank you, Kevin.    A

10          good addition.           Okay.    We’ll now move to the report

11          from the Wastewater Infrastructure Committee.                 Who is

12          going to make that report?             Mr. Johnson?

13                          Mr. Johnson:         Thank you, Mr. Chairman.       We

14          have a couple of items that come before the Board at

15          this particular time.             And we’ll review the first

16          item, which is 2006A-601, Town of Bolton.              They had a

17          situation in which they needed to request some

18          additional help.              They had a situation in which they

19          -- Our Board approved a grant of $1,989,000 to the

20          Town of Bolton to construct a new wastewater

21          collection system to serve approximately 283 residents

22          with failing septic tanks.              They had a little bit of a

23          problem in that they were requesting a loan of

24          $329,600 from construction grants and loans.             And

25          basically, they were turned down for this particular


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1           amount because I think the Town was not -- it was

2           deemed that they should not have that much of a debt.

3                           In turn, they turned back around and

4           requested $200,000 from the Rural Center, and we have

5           been told that they basically are pretty sure they’re

6           going to get that request.          And in turn, they have

7           turned around and requested $76,000 so that they could

8           complete the project.         One of the things they did do

9           to take the cost down was that 48 people were going to

10          be deleted from this particular project because of

11          that -- at the present time they had functional septic

12          tanks.       So we have been assured that that is, in fact,

13          the truth and that it will not hurt the project.

14                          So basically, the committee, after

15          discussion, recommends that we approve the $76,600 for

16          this grant.

17                          Chairman Baddour:       You have heard the

18          motion.       Is there any discussion?

19                          (No response.)

20                          Chairman Baddour:       Hearing none, so many as

21          favor the motion, signify by saying, “Aye.”

22                          Members:         Aye.

23                          Chairman Baddour:       Opposed, “nay”?

24                          (No response.)

25                          Chairman Baddour:       The ayes have it.


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1                           Mr. Johnson:      Our next item is the Chatham

2           County Wastewater Reuse project.             And in this

3           particular one, we had approved a million dollars to

4           Chatham County to redesign and construct a wastewater

5           reuse project.           And to make a long story short, they

6           have gone back in -- And I believe it says that they

7           are completely renovating or going -- they’re going to

8           construct a new wastewater plant.             And what they’re

9           asking is that the monies that we have granted with

10          them will go to pay for that -- the reclaimed water

11          storage tank and this type of thing.             So, they are

12          asking for a basic adjustment of the contract.               That

13          the grant will still go and we will actually pay for

14          the reclaimed water storage in the area and this type

15          of thing.

16                          One of the things that we have been

17          concerned about was that they had come back and asked

18          a couple of times for delays.          And the last extension

19          was given that -- would expire on August the 31st,

20          2007, which is the end of this month.             And we are --

21          The committee went on -- going on the fact that we

22          say, “Okay.          We will approve the change in the

23          terminology of the contract, but that we will make an

24          extension date of December” -- Lets’ see.             I need a

25          little bit of help on --


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1                           Chairman Baddour:        December 31, 2009.

2                           Mr. Johnson:     Okay.    December 31st.     But we

3           ask that this be listed as the last extension period.

4           So basically, the committee recommends that we approve

5           the terminology, the change in there, and to put that

6           December extension date as the last date.

7                           Chairman Baddour:        Okay.   You’ve heard the

8           recommendation in committee.            Is there any discussion?

9                           (No response.)

10                          Chairman Baddour:        Hearing none, so many as

11          favor the recommendation of the committee, signify by

12          saying, “Aye.”

13                          Members:         Aye.

14                          Chairman Baddour:        Opposed, “No.”

15                          (No response.)

16                          Chairman Baddour:        The ayes have it.     Thank

17          you very much --

18                          Mr. Johnson:     Thank you.

19                          Chairman Baddour:        -- Charles.   Okay.

20          Next, we have -- the CREP Committee met chaired by Ron

21          Beane.       Ron?

22                          Mr. Beane:       Thank you, Mr. Chairman.        On

23          July the 13th trustees Bill Hollan, Jerry Wright and

24          myself along with staff members Damon Tatem, D.G.

25          Martin, Richard Rogers, Tom Jones, and Kevin Boyer met


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1           with the CREP staff members.              As a result of that

2           meeting, our recommendation is that Clean Water

3           continues to partner with the North Carolina Division

4           of Soil and Water, Conservation Reserve Enhancement

5           Program.

6                           And during that meeting, there were some

7           concerns expressed.              Those concerns centered around

8           the lack of getting enrollments -- enrollment goals

9           that were previously agreed upon by both the CREP and

10          the Clean Water staff.              Out of that meeting came two

11          -- two recommendations.               The first one is that the

12          Division -- they proposed to simplify their payment

13          structure in that they were going to replace the

14          current payment structure with a single payment

15          structure process in which they will pay $1,000 an

16          acre for permanent easements, and $250 an acre for 30-

17          year easements.               And I think it was agreed upon that

18          this structure should be easier to administer, to

19          market, and to understand.               So, that was the first

20          thing that came out of that meeting.

21                          And then secondly, this is something that

22          the Clean Water Management’s Trust Board -- or

23          Trustees have already agreed upon, is the expansion

24          into the river basins.              They are seeking approval from

25          the USDA, which they have not got yet, as I


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1           understand, to expand the program in the six new river

2           basins, those being the Cape Fear, White Oak, Lumber,

3           Yadkin-Pee Dee, Roanoke and Pasquotank.               And with

4           broadening into these basins, of course, we hope, and

5           they hope, will broaden the base of the program and

6           should get more enrollments.            That basically is our

7           report.       And I would offer to Mr. Wright and to Mr.

8           Hollan to make any additional comments, or any staff

9           member who was there.

10                          Chairman Baddour:        Jerry?

11                          Mr. Wright:         I think we had a very good

12          meeting, and I think these two changes will have a

13          significant impact on the amount of contracts that

14          they will be getting to us.

15                          Chairman Baddour:        Okay.    Bill, do you have

16          anything you wanted to add?

17                          Mr. Hollan:         The progress this year has

18          been disappointing.            We’re behind the pace of what we

19          had hoped to accomplish, and we were searching for

20          reasons.        One was that grain prices are at one of the

21          all time highs, the ethanol and corn thing.              And so,

22          farmers are probably more reluctant to take crop land

23          out of production, and the cost benefit is not as

24          apparent to them.             And so, we’re working against that.

25          But it was also felt that we’ve made the -- we’ve


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1           overcomplicated the system and we’ve made the payment

2           schedule so complicated that it was difficult to

3           explain and to understand.

4                           And so, we believe that these

5           recommendations to simplify it will be very helpful.

6           And there’s some question about the extent to which we

7           may have, for the moment anyway, exhausted the supply

8           of willing participants in the limited number of

9           watersheds in which we are now active.           And the strong

10          hope that by expanding this to some other watersheds

11          will open the program up to other participants.            The

12          -- And I think you’re working -- They’re working hard

13          to recognize the problems, and I think we’ve got to

14          adjust the program to make this thing work as best it

15          can.

16                          We may have -- I think we’re -- In the

17          presentation by the N.C. State folks, there was -- she

18          made a brief mention of the fact that this -- the

19          permanent easement is something that is just -- goes

20          against the grain for many of these farmers.           And we

21          have put such emphasis on permanent easements that we

22          may have failed to get the opportunity to get 15- or

23          30-year easements.            And so, we want to continue to

24          monitor that, and don’t want to give up the

25          opportunity to provide near-term and intermediate-term


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1           protection just because we can’t get protection

2           forever.        So --

3                           Chairman Baddour:      Okay.

4                           Mr. Hollan:       But that’s my editorial, I

5           guess.

6                           Chairman Baddour:      Thank you, Bill.     Is

7           there any questions or comments from the Board?              We

8           don’t need any action today, do we?            All right.    The

9           next committee report we have is from the Grant

10          Criteria Committee.           And Co-Chairs Hollan and Markham,

11          who will be making that report?          Mr. Hollan?

12                          Mr. Hollan:       Mr. Chairman, I’ll make the

13          report.       We met yesterday afternoon.       We will have no

14          action to be taken.           This was another in a series of

15          meetings that we’ve had to get input and to get some

16          consensus among our committee and the members of the

17          Board who -- not on our committee, who have also been

18          in attendance at the meetings.          We -- We have met

19          previously in February and in May and in June, and so

20          this was our fourth meeting.           And the body of the

21          meeting was taken up -- Most of the body of the

22          meeting was taken up reviewing some changes that had

23          been prepared principally by Beth, but with input from

24          other members of our staff.          I think you had it in

25          your Board package and there were about 15 pages, and


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1           I think we got through about two-thirds of it.

2                           But we got -- I think we started out and got

3           input from all the staff members who were in

4           attendance as to whether the existing criteria are

5           making it possible for us to recommend the best

6           projects.        And do -- Is there anything about our

7           scoring system that needs to be changed just to make

8           sure that the best projects surface.        And I think we

9           got -- The general consensus of the staff was that the

10          better projects do tend to score higher and the

11          poorest projects tend to score lowest, and in the mid-

12          range there may be some difference of opinion.

13                          I think the other thing that we clearly got

14          from the staff was the sense that these numbers --

15          When you talk about significant digits or whatever,

16          there’s a range of possibilities for each one of these

17          projects that may overlap the differences between

18          them.      And so, a 71-point project may not be

19          significantly better than a 70-point project.           In

20          fact, it could be worse within the limits of the

21          scoring.        And so, the Board -- I think we have to be

22          careful in drawing absolute lines based on these

23          numbers.        The numbers cannot lead us to perfect

24          results.        And so, I think they re-emphasize the sense

25          we’ve had, that the Board needs to use its discretion


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1           and to take additional input.

2                           I think we’re moving in the direction.              Our

3           recommendation will move in the direction of different

4           systems for each of the various categories and not try

5           to end up with numbers that are comparable.                We’re now

6           separating the money out and looking at the projects

7           relatively against their projects in their own

8           category.        And so, it may be that we end up with more

9           or fewer points available to various kinds of

10          projects, but they will be considered among their

11          group.       And so, we won’t be concerned about looking at

12          an acquisition project which may score 90 under the

13          criteria established for acquisitions, and it may not

14          be funded while a stormwater project that scores 70

15          may be funded.           The numbers are not going to be

16          comparable.          They will simply be designed to take care

17          of the relative evaluation of the merits of each case

18          within the categories.

19                          We talked a good deal about greenways.              That

20          was the first topic.             I think we will be recommending

21          a greater emphasis on greenways.                It is in our

22          legislation.          It’s one of the purposes for which we

23          were instituted.              Greenways have additional benefits

24          in that they are tremendous from the point of view of

25          educational benefits, getting people access to the


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1           waters of our state, and giving them a state in its

2           protection and visibility.       And they also tend to lend

3           themselves to areas where we otherwise have not been

4           as active, and those would be some of the municipal or

5           more developed areas of the state where most of our

6           people and most of our taxpayers and voters are

7           located, and giving them another reason to support --

8           to know about and support the efforts of Clean Water

9           the committee believes is something we ought to do.

10                          We’ve asked the staff to explore the

11          creation of a separate category for greenways.           They

12          have been considered in the past either as part of

13          acquisitions or just as an additional point that may

14          get added to a stormwater project or as a set of

15          points that may get added to other projects.          But

16          we’ve asked the staff to look at developing criteria

17          specifically toward -- focused on greenways.           It would

18          probably serve to encourage greenway activity within

19          the state to have a separate category for which funds

20          are available.

21                          We’ve talked some about what -- what is a

22          greenway.        And I think we’re talking, for our

23          purposes, about riparian trails that are part of a

24          system of trails that has been adopted by some entity.

25          And we’ve asked the staff to consult with Bill


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1           Flournoy, who is one of the gurus of greenways in this

2           state, and Beth has already gotten some information

3           from him.        And so, I think we’ll come back with a

4           recommendation on that.

5                           We also -- There are some identified

6           potential greenways, the Mountains to the Sea Trail

7           and some other trails that have been identified by the

8           state.       And we may want to attempt to target areas

9           like that to give some incentive toward completing

10          these statewide projects in addition to the urban

11          areas.       And so, the staff is going to work on pulling

12          together all of the comments that came in and coming

13          back with a recommendation for us to consider.

14                          The next thing we talked in detail about is

15          matching funds.               The -- The legislation that creates

16          -- that created Clean Water, and as it currently

17          exists 11 years later, requires that we establish

18          matching requirement.              We have never explicitly done

19          that, and the committee thought that we ought to do

20          that since we’re directed to do that by the

21          legislation.          In practice, we have certainly

22          encouraged matches.              But I think we’re moving in the

23          direction of requiring a 20 percent match on all

24          projects with then a number of exceptions.              And we

25          would accept the -- For municipal projects we would


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1           provide exceptions for the 65 most economically

2           distressed counties.              Those are the ones that are

3           referred to as -- defined as economically distressed

4           in the -- in our legislation from the state.

5                           In addition, we have asked the staff to

6           attempt to determine how we can evaluate separate

7           municipalities within counties.               And this would be a

8           town -- incorporated town that might be located in a

9           relatively wealthy county, but in and of itself, would

10          not share in the benefits of that county.              It is a

11          fact that most of the wastewater treatment facilities,

12          for instance, are operated not by counties but by

13          municipalities.               And there are many municipalities,

14          particularly small mill towns where the mill had a

15          treatment plant and the mill has closed down and the

16          town is now -- ended up attempting to operate a

17          treatment plant with its largest customer gone, its

18          largest taxpayer gone, and problems of upgrading and

19          meeting current requirements.              And those mill towns

20          likely is not -- may be located in counties that are

21          not among the most economically distressed.              So we

22          would -- we would want to encourage -- Well, we would

23          want to afford them the same opportunity that we

24          afford to those in the 65 most distressed counties.

25                          We also have asked the staff to continue to


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1           work on distinguishing among kinds of match with the

2           sense that some matches are harder in terms of their

3           value than others, and some are very soft.       The two --

4           Both in terms of whether in cash or contributed

5           equity, those are the two different kinds.        Cash being

6           the most -- clearly the most -- the easiest to define

7           and representing the strongest commitment probably.

8           And then, also, where the match is located.        If it’s

9           directly related to the water quality benefit or if it

10          has other benefits, but is not directly related to the

11          water quality benefit for which we are extending the

12          funds.       We are -- And even though we’re exempting the

13          distressed counties from any match, we also want to

14          make sure that they aren’t overly penalized because we

15          give points for a match.       And so, we’ve got to come up

16          with some way to offset the benefits.

17                          The other thing we talked about -- We had a

18          little more discussion about what is intended by the

19          term “priority” when it is applied to decisions we

20          make or to the information that we should consider.

21          We are moving in the direction of assigning points for

22          the various elements of priority, and those would be

23          whether you have a land use plan, whether you have a

24          stormwater plan, whether you have zoning, whether you

25          have sound municipal government practices and so on.


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1           And we’re moving in the direction of recommending that

2           points be assigned for each of those so that we do

3           give priority in our scoring system to those kinds of

4           projects.

5                           There are -- We did get some thought that --

6           For instance, as to wastewater projects, we ought to

7           fund first all projects from distressed areas as we’ve

8           defined them or as the General Assembly has defined

9           them, plus our added municipalities.               And only if

10          there are sufficient remaining funds should we

11          consider funding in the wealthier counties.              I don’t

12          know that that’s a consensus of the committee, but

13          that is something that the staff is going to continue

14          to help us evaluate.               Maybe we can look at some

15          historical data to see where we -- where we end up

16          with that.

17                          We did not get to -- Let me see.         We really

18          didn’t get into detailed discussion of the targeted

19          areas.       We intend to do that at the next meeting.

20          Although, we did talk about adding a couple of

21          targeted areas.               The staff is recommending that we may

22          want to eliminate a targeted area that we currently

23          have.      And we did not talk about water supply

24          watersheds.          And there are some -- Our staff has

25          suggested to us that there are some things about water


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1           supply watersheds that we don’t take into account

2           currently that we may want to.              And one would be the

3           population of the area served, that if you have a

4           water supply watershed that serves a thousand people,

5           right now it’s the same number of points as one that

6           serves a million people.             And so, we want to look at

7           that to see whether that represents something in our

8           criteria that could be improved upon.

9                           In any event, Mr. Chairman, we intend to

10          meet at least one more time before making

11          recommendations.              Our current priority is that our

12          final recommendations will probably come at the

13          February meeting.              Although, it’s conceivable we could

14          finish up prior to that.

15                          Chairman Baddour:         All right.   Thank you

16          very much for that fine report.              You can see the

17          Criteria Committee has just got a lot on its plate, a

18          lot of very important critical issues.             So I encourage

19          all Board members to try to attend those committee

20          meetings whether you’re on the committee or not.                 And

21          to have your input -- Share with Bill and Kevin your

22          thoughts about the various things Bill has raised.

23          And we’re probably not going to have any time for

24          discussion on that today.             Did you have something?

25                          Ms. Brannon:         I just wanted to make a quick


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1           comment, Mr. Baddour.

2                           Chairman Baddour:      Right.

3                           Ms. Brannon:      And that is just to make sure

4           -- clarify for the record for the minutes is that we

5           were talking about those wastewater projects, that

6           they weren’t automatically funded because they were

7           economically stressed, that they have to be good

8           quality projects that met all the other standards that

9           we set and economically distressed.

10                          Chairman Baddour:      Right.     Okay.   Thank you

11          again for that report.           We have added to the agenda

12          the report of the Personnel Committee, and I would

13          like to call on Ron Beane for that report.

14                          Mr. Beane:        Thank you, Mr. Chairman.       I

15          appreciate the Personnel Committee meeting yesterday.

16          We met late.          It was after the Wastewater Committee

17          met.      It was after 6 o’clock.       So, I appreciate all

18          the members of the Personnel Committee who were there

19          joining in that meeting.           Mr. Chairman, we have -- as

20          a result of that meeting, we have three

21          recommendations to the full Board.           If Beth would put

22          those on the board?           Do you have those?

23                          Ms. McGee:        Uh-huh (yes).

24                          Mr. Beane:        The first recommendation, and

25          it may be hard for you to read, but it’s -- our


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1           Executive Director had to ask that we approve a five

2           percent salary increase for the Interim Director for

3           program implementation.           That Interim Director would

4           be Beth McGee.           And he asked for a two-month period.

5           The recommendation of our committee is that we approve

6           this motion to approve this -- to approve the five

7           percent salary increase.           But instead of being for a

8           limited time of two months, the motion was to increase

9           it until the permanent Deputy Director has been hired

10          for that.        That’s our motion.

11                          Chairman Baddour:        Okay.   You’ve heard the

12          motion.       Discussion?

13                          (No response.)

14                          Chairman Baddour:        Hearing none, so many as

15          favor the motion, signify by saying, “Aye.”

16                          Members:          Aye.

17                          Chairman Baddour:        Opposed, “No.”

18                          (No response.)

19                          Chairman Baddour:        The ayes have it.

20                          Mr. Beane:        Thank you.     The second

21          recommendation came from our Executive Director to

22          reclassify the State Property Office position.                I

23          think the person we had was Joy Wayman.              That’s the

24          last person --

25                          Ms. McGee:        David Greene.


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1                           Mr. Beane:       David.    Okay.   I’m sorry.

2           But anyway, we have one position, and this position is

3           classified as a Real Property Agent 2.             And our

4           committee would like to recommend that that be

5           reclassified to a Real Property Agent 3 because we’ve

6           had trouble keeping people in that position.              Because

7           when other positions come open in the State Property

8           Office, they will take them.            So, we want to recommend

9           that our one State Property Office position be

10          reclassified from an Agent 2 to Agent 3.             That’s our

11          recommendation.

12                          Chairman Baddour:        You’ve heard the motion.

13          Any discussion?

14                          (No response.)

15                          Chairman Baddour:        So many as favor the

16          recommendation, signify by saying, “Aye.”

17                          Members:         Aye.

18                          Chairman Baddour:        Opposed, “No.”

19                          (No response.)

20                          Chairman Baddour:        The ayes have it.

21                          Mr. Beane:       Okay.    Thank you, Mr.

22          Chairman.        And the last item that we would like to

23          bring to the Board -- and this is brought to us by our

24          Chairman.        And I’ll give you a moment maybe to kind of

25          read sort of the background there.            But the background


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1           is we want to -- we really want to amend Section 5 of

2           the Clean Water Management Trust Fund personnel policy

3           by adding -- it reads -- the Section 5 reads thusly:

4           “The Executive Director shall appoint, suspend and

5           remove all employees.”            And what our committee is

6           recommending is the underlying portion to be added to

7           that, “Provided” -- and this is the part that we want

8           to amend -- “Provided, however, the Board of Trustees

9           shall approve the appointment of any Deputy Executive

10          Director.”         And, of course, that motion carried with

11          one opposing vote.            That’s our recommendation.

12                          Mr. Baddour:       Mr. Chairman, if I could,

13          also, since I made that motion -- The reason it’s

14          necessary to do this is that is the way the personnel

15          policy reads, but the Board actually adopted something

16          very close to this at it’s meeting.            I can’t tell you

17          when.      When?      August of ’06.    But when it was taken

18          down, it read as if the Board would actually do the

19          hiring.       And so, what this is is to correct what was

20          the intent of the Board at that time and go ahead and

21          formally put it in the personnel policy.            The

22          personnel policy that we have was never actually --

23          they never went and reprinted it and amended it.                So

24          really, this is to straighten out what was, I think,

25          not quite reported correctly in August of 2006.


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1                           Mr. McGrady:     Mr. Chairman?

2                           Chairman Baddour:     Yes?

3                           Mr. McGrady:     I want to speak to the

4           committee’s motion, and we’ll vote against it.            I

5           appreciate Chairman -- the Chairman for raising this

6           issue.       And I agree that we either need to affirm the

7           policy that is in the employment handbook, or adopt a

8           resolution like this that sort of squares up what the

9           board did previously.          Actually, prior to my joining

10          the Board, and where we are now.            But I would -- I

11          think as a matter of policy -- I don’t know what was

12          going on at that point in time, but I really think

13          it’s better to just leave the Executive Director with

14          the ability to appoint and suspend and remove all

15          employees and not make a limited exception.            I think

16          the Executive Director can involve us in some fashion,

17          whether in the interview process or in some other way,

18          without actually causing us to have to approve his

19          appointment of any Deputy Executive Director.

20                          So I think -- I don’t think we need to go

21          here anymore, I would hope.         And I would hope that the

22          Executive Director would involve us in any of the

23          employment decisions he makes up to some point in

24          terms of getting our advice or what-not.           But I really

25          don’t like the precedent of being in the position to


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1           have to actually approve a Deputy Executive Director.

2           And, for me, it has also been highlighted in what has

3           gone on in another organization much like this has hit

4           the papers, and I just don’t want to be in the

5           approval process.

6                           Chairman Baddour:       All right.    Further

7           discussion?          Karen?

8                           Ms. Cragnolin: I have to agree with Chuck,

9           and I did vote against the motion yesterday.             I think

10          that we need to be really clear with our Executive

11          Director about the characteristics and qualities and

12          talents of the personnel.           We need to agree on what

13          the job descriptions are, and then we need to hold he

14          or she accountable for doing that.              I don’t personally

15          have time to do that.           Now, if he wants to bring

16          somebody back and say, “This is what I’m doing,” I

17          think that’s great.

18                          But I really feel it’s an imposition of --

19          The Board doesn’t need to be involved in those kind of

20          discussions.          And I would like to echo what Chuck

21          said, and I feel as though that that’s an Executive

22          Director decision.            If he makes the wrong one, we’ll

23          hold him accountable for it.

24                          Chairman Baddour:       Bill?

25                          Mr. Hollan:        Mr. Chairman, I think it’s a


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1           close call, but I’m going to go the other way on this.

2           I think the Deputy Director has a special position.

3           We are responsible for hiring the Director.              And if,

4           God forbid, he should get hit by a truck on the way

5           home to see his family, the Deputy Director would be

6           the Executive Director.             And I don’t think it is

7           asking too much -- I’m not saying that we ought to

8           interview; I’m not saying that we ought to be involved

9           in that process.              But I do think it’s not unreasonable

10          for the Board to want to be consulted and to be kept

11          apprised of that because this person is punitively the

12          person who would be the Executive Director should

13          anything happen to our Executive Director.              So I don’t

14          think that this is meddling.

15                          And I mentioned -- I said yesterday when --

16          In our business, when we hire a general manager or a

17          company for a general manager, the typical management

18          contract provides that some of the key people are

19          subject to approval by the owners of the company.                And

20          so -- And this would be your chief financial person or

21          your deputy general manager, if you want to call it

22          that, and even your executive chef.              You would want to

23          have some input there.             So, I will vote in favor of

24          the committee motion.

25                          Chairman Baddour:         Further discussion?


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1                           Mr. Wright:    Mr. Chairman?

2                           Ms. Brannon:   May I ask a question?

3                           Chairman Baddour:   Okay.

4                           Ms. Brannon:   Mr. Wright was first.

5                           Chairman Baddour:   Mr. Wright?

6                           Mr. Wright:    I would like to say this.

7           This past week one of the -- I guess, what I consider,

8           one of the best professionals involved in the

9           community got terminated from his job.         Had there been

10          more communication between the Executive Director and

11          the Board about the actual job description, the

12          responsibilities, and the chain of command in this

13          instance, I’m not sure that this situation would have

14          arose.       And unfortunately, I feel like if the Board

15          had talked more about what exactly those people should

16          have done and be doing, then the director of the

17          commission would still be there.

18                          And I think because of not just that

19          circumstance, but other circumstances in terms of

20          people exactly knowing what their job is and how they

21          fit into the system and the Board’s interpretation of

22          that, I just think it’s important that we talk about

23          these things up front before they happen.         And because

24          of that, I support what we’ve done in the past.

25                          Chairman Baddour:   Yevonne?


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1                           Ms. Brannon:     I have a quick question.         So

2           if they recommended a person (inaudible) and someone

3           is recommended to the Board and the Board doesn’t

4           approve, what happens?         I mean, what is the -- what is

5           the worst case scenario of voting for this?

6                           Mr. Crawley:     Then you would -- If the

7           Board didn’t approve under the wording here under this

8           policy, you would be telling the Executive Director to

9           start the process over again or bring you another

10          candidate.         You know, if he’s got two or three that he

11          likes and he ranks them one, two and three, he might

12          be comfortable bringing you number two, and you might

13          like number two.

14                          Chairman Baddour:     Further discussion?

15                          (No response.)

16                          Chairman Baddour:     Hearing none, so many as

17          favor the motion, signify by saying raising your hand.

18                          (Members show hands.)

19                          Chairman Baddour:     Those opposed?

20                          (Members show hands.)

21                          Chairman Baddour:     If you would record that

22          there were 12 in the affirmative and 3 in the

23          negative, and the motion passes.             Okay.   Now, we’re

24          going to have a Legal Committee report, and so we

25          would have a motion with regard to closed session at


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1           this time.

2                           Mr. McGrady:     Mr. Chairman, are you going

3           to have any other announcements or anything, or are we

4           just going to go into this?

5                           Chairman Baddour:        Well, we will come back

6           out and then adjourn, but I don’t believe there are

7           any other announcements.

8                           Mr. McGrady:     Okay.     I just wanted to make

9           sure.

10                          Chairman Baddour:        Right.

11                          Mr. McGrady:     Mr. Chairman, the Legal

12          Committee met this morning, and does have a

13          recommendation for the Board.            Since it considers --

14          it relates to a matter of litigation, I move that we

15          go into closed session pursuant to General Statute

16          143-318 111 for purposes of communicating to counsel

17          regarding a matter being litigated, specifically,

18          Armstrong versus Clean Water Management Trust Fund, et

19          al.

20                          Chairman Baddour:        Okay.    You’ve heard the

21          motion.       Discussion?

22                          (No response.)

23                          Chairman Baddour:        So many as favor the

24          motion, signify by saying, “Aye.”

25                          Members:         Aye.


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1                           Chairman Baddour:                 Opposed, “No.”

2                           (No response.)

3                           Chairman Baddour:                 The ayes have it.   And I

4           am going to ask our Executive Director to stay with

5           us.     And if you’ll just stay in place, I think

6           everyone else will be excused and we’ll go right into

7           closed session.

8

9

10

11                      (Proceeding concluded at 12.13 p.m.)

12

13                                                *****

14
15                                    Quoted material in this transcript
16                                      is verbatim and may/may not
17                                          reflect a direct quote.




     GARRETT REPORTING SERVICE                                                 (919) 676-1502
     Post Office Box 98475
     Raleigh, North Carolina 27624-8475
CWMTF Board Meeting                     8/13/2007                   Page 131




                    CERTIFICATE OF NOTARY - COURT REPORTER


STATE OF NORTH CAROLINA)
                       )
COUNTY OF WAKE         )



               I, Jennifer D. Critcher, Court Reporter, Notary

Public in and for the above county and state, do hereby

certify that the foregoing is a true and accurate

transcription, to the best of my skill and ability, of the

meeting of the Board of Trustees of the Clean Water

Management Trust Fund held in Raleigh, North Carolina on

Monday, August 13, 2007.




                                     ____________________________
                                     Jennifer D. Critcher
                                     Notary Public, Wake County,
                                     North Carolina
                                     Notary No. 200625800155




GARRETT REPORTING SERVICE                                    (919) 676-1502
Post Office Box 98475
Raleigh, North Carolina 27624-8475

				
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