Friday, December 18, 2009

NC confirms double-dipping

The Program Evaluation Division (PED) of the NC General Assembly has now investigated the double-dipping in the NC wetland mitigation programs.

The PED describes in detail how credits for the same 46 acres of preserved land were purchased twice by the state--once as wetlands credits for the Department of Transportation and then later as nutrient offset credits for the Department of Environment and Natural Resources (DENR).

The PED determined that of the $911,000 that the DENR spent on the "new" nutrient offset credits, $698,372 paid for credits on land that had already been preserved. The PED also determined that another 18 acres remains available for further double-dipping.

Besides the double-dipping itself, one of the most appalling items in the report was a statement by a DENR Assistant Secretary, who wrote that
Approval of the EBX buffer/nutrient offset bank did not impose additional costs on taxpayers. The ability to use nutrient offset credits from an established stream and wetland restoration site made those credits less expensive.
By such logic are dead parrots and the Brooklyn Bridge sold.

The Assistant Secretary seems not to realize that that expenditure bought absolutely no additional environmental benefits to the taxpayers of North Carolina. The money was completely wasted; it has evaporated; it protects nothing, and it can't be used to protect anything. The state would have been better off if the DENR had taken 698,372 dollar bills, shredded them, and then used resulting fluff to insulate its headquarters or to stuff the Assistant Secretary's empty head.

The only positive from the report was that the DENR has issued a moratorium on most future "double" transactions and has drafted rules to prohibit this in the future.


PAyscue said...

If the nutrient credits were not purchased from the lowest cost issuer, would not the mitigation cost considerably more from another provider?

Dave Ribar said...

It's easy to be the lowest bidder when you don't have to provide anything (or much). For the 46 acres in question, $1 would have been too much to pay because those 46 acres were already preserved.

The point isn't that the price was lower than other bids. It's that there was no value associated with the portion of the contract that dealt with the 46 acres.

Suppose that you buy a new tire for your car. You then decide that you would like another tire. You ask the salesman, "how much for a tire." She says, "$50 for a new tire or $10 for the tire I just put on your car." $10 is considerably less than $50. Do you take the second deal?