Falls Lake – Laboratory of Water Policy Innovation?

The waters of the Upper Neuse River Basin in North Carolina have many of the challenges and opportunities facing water resources across the United States.

Local and state debate about protection of Falls Lake and nearby Jordan Lake from water pollution in the 1980’s lead to enactment of the first local government watershed protection ordinances in the watershed and the landmark NC Water Supply Watershed Protection Act of 1989 and Water Supply Planning Act of 1989. The Water Supply Watershed Protection Act set mandatory, minimum statewide standards for development near surface water supplies. The Water Supply Planning Act required local governments to develop and submit local water supply plans to the State.

Despite these policies Falls Lake does not meet state water quality standards. State and local governments are developing a nutrient management strategy and new rules to protect and restore water quality in the lake.  The proposed rules have raised a host of scientific, economic and policy questions in the region.

Is the monitoring data and modeling sufficient for policy making and writing rules to reduce pollution? What are the costs and benefits of reducing pollution? Who pays? Who benefits? What’s fair? Do we fight or collaborate? Should drinking water customers downstream pay for watershed protection upstream? Is nutrient trading workable? Do stream restoration projects work? Should land preservation count? How much of the problem is the result of deposition from air pollution from vehicles and coal fired power plants? How do we value clean water as an asset? How do we value the clean water and other ecosystem services provided by private farm and forestland in the watershed? How do we redevelop our cities and reduce stormwater pollution? How do we maintain local production of food and fiber and protect water resources?  Where is the water to sustain future economic growth and development coming from?

Solving water quality and quantity problems in the Upper Neuse River Basin can be a model for other regions from High Rock Lake on the Yadkin River to the Chesapeake Bay. It can also guide efforts to reform the national Clean Water Act of 1972.

Water Resources in the Research Triangle Region

Almost half of the 1.8 million residents of the Research Triangle region, including the residents of Durham, Raleigh, Eastern Wake County, Hillsborough, Butner and the Research Triangle Park, depend upon Falls Lake, eight other lakes, and groundwater supplies in the Upper Neuse River Basin for drinking water, industrial use and recreation. The other half depends upon Jordan Lake, Cane Creek, and groundwater supplies in the Upper Cape Fear River Basin to the southwest. Both Falls Lake and Jordan Lake were built by the US Army Corps of Engineers for water quality, flood control, recreation, and water supply. The dynamic Research Triangle Park and region would probably not exist today without water supplied by Falls Lake and Jordan Lake. The State demographer estimates that by 2030, over 2.8 million people will live in the Research Triangle region. The demand for clean water will only increase.

Nutrient Problems

Like many waters in the US the quality and quantity of Falls Lake and the other drinking water supplies are threatened by excessive run-off of nitrogen, phosphorus, sediment, and other pollutants from poor agricultural practices, poorly planned development, inadequate wastewater treatment, septic tanks, and other sources. The City of Durham estimates that it has lost about 25% of the capacity of its Lake Michie built in 1922 on the Flat River due to sedimentation.

The NC Division of Water Quality (DWQ) and US Environmental Protection Agency (EPA) placed Falls Lake on the Section 303(d) list of impaired waters because of violations of the State’s water quality standards for chlorophyll a (a proxy for algae caused by excess nitrogen and phosphorus) in 2008. DWQ and EPA also listed Falls Lake above I-85 as impaired for turbidity caused by sedimentation in 2008.

Nutrient Management Strategy

The 2005 NC General Assembly enacted SL 2005-190 (SB 981, Clean Lakes Act) and directed the NC Environmental Management Commission (EMC) to develop and adopt a strategy to reduce nutrient pollution in Falls Lake by July 1, 2008. The legislature later extended the deadline to July 1, 2009. The 2009 NC General Assembly enacted SL 2009-486 (SB 1020, Improve Upper Neuse River Water Quality)  to extend the deadline until January 15, 2011, to provide credits for early adoption of nutrient reductions, and to require stricter sedimentation and erosion control measures in the watershed.

DWQ in consultation with at Technical Advisory Committee developed a calibrated nutrient response model for Falls Lake. Staff from the Triangle J Council of Governments facilitated nine meetings for stakeholders interested in the development of rules from late 2008 until January 2010.  See www.fallslakestakeholders.org.

At its March 2010 meeting the EMC voted to send proposed nine draft Falls Lake nutrient rules to public hearing and comment. The rules would require all major sources of nitrogen and phosphorus to implement a staged, adaptive approach to reduce pollution into the lake by 40% and 77%, respectively, from a 2006 baseline condition over the next 25 years at an estimated cost of $1,500,000,000. See http://portal.ncdenr.og/web/wq/ps/nps/fallslake to read the proposed rule text and fiscal note.  See http://portal.ncdenr.org/web/wq/ps/mtu/specialstudies to read the watershed model report and lake model report.

The EMC held public hearings in Durham on June 30 and in Raleigh on July 1 and will receive written comments until August 16, 2010.

EMC hearing officers will deliberate on public comments during the fall. The EMC is expected to vote on final rules on or before its January 2011 deadline. The 2011 General Assembly will review and debate the rules during its session. If the rules clear the legislature they will likely become effective in 2012.

Local government consensus principles

Triangle local governments face many regional problems, including water quality and quantity management in the Upper Neuse and Upper Cape Fear; transportation, and air quality. If they fight over water quality in Falls Lake, it will affect their ability to solve other critical regional problems. The Nicholas Institute has served as a resource to local governments in developing a set of “Consensus Principles” to shape the proposed rules. The City of Durham, Durham County, Granville County, City of Raleigh, Wake County, Orange County and other jurisdictions adopted the consensus principles in their comments on the rules.

The NC General Assembly may authorize establishment of a Falls Lake Watershed Association to provide an ongoing forum to share information and implement common strategies (HB 1765 was pending on 7/8/10.)

Research needed; policy questions for state and local decision makers (Help wanted!)

• Additional and ongoing monitoring and modeling of water quality in Falls Lake and other drinking water supplies in the Upper Neuse is needed to measure pollution reductions and to support adaptive management strategies. How should this program be designed, funded, and maintained? How can it be open, transparent and scientifically credible?
• Falls Lake was impounded about 30 years ago. Is water quality in Falls Lake improving, declining, or stable? What are the water quality trends in Lake Michie, Little River, Lake Holt, and other reservoirs in the watershed?
• State and local governments need to improve hydrologic modeling in the Upper Neuse for both water quality modeling and for water supply modeling, risk management and planning. Can water quality and quantity monitoring and modeling be coordinated? Integrated?
• Falls Lake was constructed and is operated by the US Army Corps of Engineers. What is the role and responsibility of the Corps in monitoring and modeling? In protecting and restoring water quality and quantity? Should the purposes for which Congress authorized and financed Falls Lake (and other Corps projects across the country) about 50 years ago be reevaluated?  
• The State estimates that clean up of Falls Lake will cost about $1,500,000,000 over the next 25 years. Can economic analysis and modeling of the costs and benefits of protecting and restoring water quality in the Upper Neuse be improved? What are the benefits to downstream water users? What are the benefits to upstream waters and communities to the rules?
• GASB-34 requires local governments to manage their assets and infrastructure. Most water infrastructure such as treatment plants, pumps and pipes wears out and depreciates. However the value of water supplies has appreciated since they were constructed. How should water utilities value their water supplies and show their assets on their books? Will this change the willingness to invest in watershed protection?
• What scientific, technical, and economic information do state and local decision makers need before implementing, amending, adapting or otherwise changing stage 2 of the proposed rules? What process should be followed to consider this information?
• Local governments have adopted a hodge podge of local stormwater management requirements over the last twenty years. The proposed Falls Lake rules require nutrient and stormwater controls for new development to be implemented by local governments. The Jordan Lake rules adopted by the EMC in 2008 and reviewed by the legislature in 2009 also require nutrient and stormwater controls for new development. Many Triangle local governments are in both watersheds. Could stricter more uniform stormwater standards be developed and adopted in both watersheds to the benefit of developers and the environment?
• Some state and local governments in the Great Lakes, Chesapeake and other watersheds have reduced phosphorus pollution by enacting legislation to ban phosphorus in dishwashing detergents and lawn fertilizer. NC banned phosphorus in laundry detergents in 1987. However the law provides many exceptions. What are the costs and benefits of banning phosphorus in dishwashing detergents? In lawn fertilizers? In other products? In reducing exemptions in NC’s phosphate detergent ban?
• The proposed rules provide for nutrient trading. Is market-based nutrient trading technically and economically feasible in the Upper Neuse? Would a payment of ecosystem services or nutrient offsets program be more effective? Should nutrient trading be implemented watershed wide or by local jurisdiction? What policies will ensure cost effective opportunities to offset nutrients?
• What are the water quality and quantity benefits of preserving riparian buffers, wetlands, floodplains and land in the watershed? Should land preservation projects be eligible for nutrient credits? What are the water quality and other benefits of expanding Eno River State Park as proposed by its master plan? What are the water quality and other benefits of protecting the National Guard’s Camp Butner from encroachment by incompatible land uses?
• What are the opportunities for farmers to reduce nutrients and maintain their land in agriculture?
• The proposed rules and state law provide nutrient credits for early adoption of stormwater practices. How will this be implemented? What will count?
• Do properly installed and well maintained septic tanks treat nutrients?
• A large number of septic tanks in the watershed are sited in poorly drained soils. How significant is their contribution to nutrient problems? To unhealthy levels of bacteria that close swimming beaches in the lake?
• Where is it cost effective and environmentally sound to connect homes on septic tanks in the watershed to central sewer systems? The NC Clean Water Management Trust Fund has provided funds to local governments to repair failing septic systems in some mountain counties. Would a similar program work in the watershed? 
• How important is atmospheric deposition of nitrogen in the watershed? Can it be reduced?