06/11/06 — Nitrogen runoff fee increase delayed

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Nitrogen runoff fee increase delayed

By Andrew Bell
Published in News on June 11, 2006 2:10 AM

Wayne County industries and developers worried about paying much higher costs for building in the county will not see higher nitrogen runoff fees -- at least for now.

Sen. John Kerr, D-Wayne, said Friday he has worked out a compromise with state officials concerning the fees. The agreement will allow local governments the chance to voice their concerns about the precipitous increases officials say will cripple local economic development efforts.

Kerr said he has been working toward a compromise for the past three weeks, and he succeeded late last week.

"I was able to reach an agreement with the governor and the Environmental and Natural Resources Department. We're going to maintain the old fee until all of the governments, businesses and the public give input to the next step," Kerr said.

Earlier this year, an administrative ruling changed the nitrogen runoff fee from $11 per pound per acre to $57 per pound per acre along the Neuse River Basin, which, Economic Development Commission president Joanna Thompson said could halt industrial development in the county.

During construction at a new development, sediments, such as nitrogen and phosphorus, are washed away by rain. That water eventually runs off into local waterways.

The nitrogen runoff fee, known as the nutrient offset fee program, was established by the North Carolina Environmental Management Commission to help the state maintain strict nitrogen limits. The rules limit the amount of stormwater runoff leaving the site of any new development -- a move designated to protect local waterways from a harmful amount of sediments.

The cap for nitrogen export is 3.6 pounds per acre per year. If a development exceeds that amount, the developer, before the increase, would pay $11 per pound per acre. The money is placed into the environmental enhancement program, and the funds are used to construct nutrient controls within a local river basin to achieve the needed nutrient reductions.

Last year, the N.C. Environmental Management Commission decided the $11 rate was not sufficient enough to support the nutrient offset program, so the state's governmental operations committee approved the increase to $57 per pound per acre in February.

Wayne County Manager Lee Smith said the administrative ruling took county officials and developers by surprise, and he urged the county commissioners to contact state legislators to get the ruling retracted.

With Kerr's compromise, the fee will remain at $11 per pound per acre for about seven to 10 months. During that time, developers, local government officials and others will meet to discuss the issue and determine a satisfactory fee.

Before a solution was reached, Ms. Thompson said the increased fee had a negative effect on two industries, AAR Corp. and Andrew Corp., that recently announced their intentions on locating to Wayne County.

AAR Corp., with an $11 per pound per acre fee, would have to pay about $44,000 in nitrogen runoff fees. After the increase, the figure jumped to more than $279,000, Ms. Thompson said. For Andrew Corp., the fees increased from about $40,000 to about $236,000.

Decreasing the fee will help the EDC complete some of its projects, such as the two new industry annoucements, Ms. Thompson said.

"I heard a large outcry from this and the plan was to fix it. Now we've got a game plan, and we can move forward," Kerr said.