Industry officials bash regulations during hearing

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In 2005, the state Division of Water Quality slapped Karla Knotts and her husband’s Pineville-based real estate brokerage company, Knotts-Greylock, with a $57,816 fine.

The basis for the fine: A tire rut in their Greylock subdivision development in Matthews.

In the eyes of the DWQ, the rut was a temporary stream that helped the development impact as much as 264 feet of a nearby stream. That amount of impacted stream was less than the 300 feet allowed by the federal government but more than the 150 feet allowed by the state. Knotts suspects that Charlotte-Mecklenburg Utilities workers created the rut through the maintenance of a sewage line.

In the end, Knotts paid the fine, which went into a state ecosystem enhancement program.

But she did not let the issue die there.

Instead, Knotts and her husband, Terry, took their complaints about the ordeal to a March 21 “listening tour” held in Charlotte by the North Carolina Joint Committee on Regulatory Reform, where nearly 40 builders and other businesspeople shared their criticism or showed their support of state and local rules.

The purpose of the hearing was to find ways to improve North Carolina’s climate for businesses by eliminating the burden imposed by “outdated, unnecessary and vague rules,” according to a General Assembly Web page dedicated to the joint committee.

A frustrated Knotts vented about the fine to the seven state senators and representatives who sat on the hearing’s panel.

“This was not a pristine mountain stream,” she said. “This was a tire rut. This tire rut wasn’t even connected to a stream.

“We must fix the oppressive and arrogant rules of (the state Department of Environment and Natural Resources) and DWQ that exceed the federal law.”

Many of the comments at the hearing came from members of the building industry, with complaints centered on environmental regulations and what they called extensive red tape for those hoping to develop land in Charlotte.

But environmental groups and supporters were also on hand to praise the regulations. Among them was Beth Henry, who said she used to go fishing in Mecklenburg County with her father when she was younger. Now the county’s streams are endangered and Charlotte is the 10th smoggiest city in the U.S., she said.

“The environment is not just wildlife or endangered animals,” she said. “We eat, drink and breathe the so-called environment. Corporations are not capable of curbing their excesses. The General Assembly is not a corporation and you can think long term.”

‘Judge and jury’

At the hearing, developers and others in the real estate industry gave the senators and representatives an earful.

Dan Latta, a member of the Home Builders Association of Charlotte, told the commission that the U.S. Fish and Wildlife Service is blackmailing Charlotte-area municipalities.

Latta cited the city of Charlotte’s post construction controls ordinance, which was initially mandated by the U.S. Environmental Protection Agency to states, which passed the rule on to municipalities as a model ordinance to be adopted.

He said municipalities are being forced to impose even stricter requirements or risk the blockage of future municipal water and sewage extension permits.

He said USFWS refused to sign off on a permit application by Charlotte-Mecklenburg Utilities to expand capacity at the McDowell sanitary wastewater treatment plant, despite only having commenting power on the permit, until the north Mecklenburg County towns of Davidson and Cornelius adopted overreaching low-impact design standards. The utility has worked for five years to obtain the permit. USFWS could not be reached for comment, and EPA spokeswoman Dawn Harris-Young was reached but did not comment on the post construction controls ordinance.

“This blackmail by Fish and Wildlife has resulted in a 70 percent phosphorous removal and tree-save requirement that was not required in either federal or state rules,” Latta said.

Billy Packer, a developer in Charlotte, complained that DENR has become the “judge and jury” over appeals of fines levied by the state agency.

Packer said he developed 10 acres of property between November 2006 and September 2006 and no problems were found in the final inspection by DENR. But in April 2008, another inspector visited the property and gave Packer a $19,100 fine because there was a potential for sediment damage.

Packer successfully appealed the fine to Administrative Law Judge Beecher Gray, who according to Packer said the penalty was not appropriate because there was no sediment damage.

DENR appealed the ruling, and a new hearing was held by DENR in Raleigh. The fine against Packer was upheld.

“Now I have to go back and appeal the ruling by DENR to a superior court,” he said. “The cost of all this to a normal citizen is upwards of $100,000.”

Rick Jasinski, land development manager at Classica Homes in Charlotte, said the amount of regulations, ordinances and requirements has made it difficult to fit a home on a lot.

He said Classica was building a community in Huntersville on 70 acres. Individual lot sizes were 1.5 acres apiece.

“Even with a 1.5-acre lot, due to the requirements for water quality, stormwater retention and tree-save, we could barely fit a single-family home on the lot,” he said. “They don’t think through how one ordinance or requirement is affecting the other.”

He also said the review of architectural plans by Mecklenburg County is tedious. Each review results in a set of comments from the planning department. The developer must respond to those comments and resubmit the plans.

“They open it up to another whole set of comments, like they don’t have a checklist,” he said. “They do that twice, three times, with a new set of comments each time. I understand making sure it’s regulated, but have a checklist.”

Environmental groups weigh in

It wasn’t just developers at the meeting expressing their concerns about the regulations. Environment groups, like the Sierra Club and the Catawba Riverkeeper, also weighed in.

June Blotnick, executive director of Clean Air Carolina, said clean-air regulations are good for the economy and have a positive impact on job creation.

Blotnick said fewer people miss work because of pollution-related illnesses when smog is removed from the air. Also, the creation, installation and operation of air pollution-reducing technologies spurs investment and job growth, she said.

Chris North, conservation director for the North Carolina Wildlife Federation, said now is not the time to roll back environmental regulations.

North pointed out that consumption advisories have been issued for area waterways, including Mountain Island Lake, a major source of drinking water for nearly all of Mecklenburg County.

Bill Gupton, chairman of the local Sierra Club chapter, said Senate Bill 22, which was signed into law March 25, would bar state agencies from adopting any new rule that leads to substantially higher costs to taxpayers without the consent of the General Assembly. That bill is duplicative, he said, adding that fiscal analyses are already completed for new rules that would have a substantial economic impact.

“These agencies and commissions that currently consider new rules have the resources and expertise to analyze the impact of new rules,” he said.

Gupton said the General Assembly lacks the resources to review every proposed rule from every agency. Also, the bill could prevent new rules without fully determining costs savings and benefits, he said.

“I would hope that you not let short-term financial issues override long-term financial, safety, health care and environmental benefits,” he said.

But David Mitchell, environmental manager director for Charlotte-based Duke Energy Corp., pointed out other duplications of laws that are already on the books. He said state toxin regulations impose an additional layer of regulatory requirements on facilities that already will be subject to federal toxin programs finalized this year.

Similarly, the state mercury-limit rule is duplicative of a federal toxin rule and will result in needless evaluations and commitments of regulatory staff, Mitchell said.

He also said some of the state’s groundwater standards, which are set to protect drinking water, are stricter than federal or state drinking water standards.

“We recommend state groundwater standards be revised to adopt as other states have the national contaminant levels to protect drinking water,” he said.

“Now that federal regulations have set about to achieve the same or greater goals, it is time to reconsider some of the state’s approaches and eliminate redundant rules that only cost staff time, drain budgets and divert our attention from more pressing needs,” he added.

The regulatory review commission will continue to hold hearings and is still accepting public comments. The deadline for the commission to suggest new laws is May 2012.

Tara Ramsey can be reached at [email protected].