Questions surround funding for flounder fishery observers

By on January 16, 2017

 Watermen want to know what happened to commercial license fees that were collected to fund observers required by law for flounder fishing when sea turtles are spotted in area waters.

Few answers were provided at a meeting of the North Carolina Commercial Fishing Resource Funding Committee on Jan. 4.

Records show that $1.3 million was allocated for the observers in the 2015-2016 fiscal year, but only $608,065 was spent.

Dewey Hemilright, who attended the meeting, asked how so much could have been spent on the Section 10 permit program when the flounder fishery was closed much of the season.

“Expenses need more accountability,” said Hemilright, a long-line fisherman. “This doesn’t affect me, but I’m willing to pay the extra money if it allows others to fish. But if there’s more being paid in than is needed, then it should be returned to the fishermen.”

An additional license fee was imposed after a state appropriation to cover the cost of complying with the federal permit’s conditions was eliminated. One condition requires the observers, who monitor interactions with endangered sea turtles and sturgeon.

The fishery can be shut down if turtles and sturgeon are found in the management area.

Section 10 observers are a part of the DMF Observer Program, also called the Resource Protection unit, which has much broader responsibilities, The unit develops fishery management plans, assesses stocks and collects at-sea information about commercial and recreational catches.

After the loss of revenue to pay for the permit program, the North Carolina Fisheries Association brokered a deal in which fishermen agreed to pay substantially higher license fees to fund the Section 10 permit observers.

“It was the only way they could continue to fish,” said Jerry Schill, NCFA director.

Money not spent during the fiscal year is supposed to be used for projects identified by the Commercial Fishing Resource Funding Committee and endorsed by a committee of members of the Marine Fisheries Commission. The resource funding committee is charged with developing sustainable commercial fishing projects and pay for them from the fund’s unused balance.

The statute also includes funding for marine mammal observers. Schill said the state does not fund those observers, but the provision was added in case the federal government at some point requires states to pay for them.

Since turtle interaction often closes the flounder fishery, the watermen questioned the need for nine permanent full-time employees and four to eight temporary observers. They are only necessary during the nine months when sea turtles are migrating through the area, the watermen said.

An audit in 2016 showed that the annual cost of the program ending in fiscal year 2014 was $296,179 and in fiscal year 2015, $552,657. Those amounts were provided by the General Assembly before the new fees went into effect.

Also funding the program is a separate tax on commercial fishing vessel registration, which in the budget ending in 2016 was a little more than $100,000.

A letter written to former State Treasurer Janet Cowell dated November 2015 and signed by Louis Daniel, who was director of the Division of Marine Fisheries at the time, requested disbursements of $1.3 million from the Treasurer’s Office to pay for the program. No supporting documentation was provided.

The budget for the fiscal year – the first in which fishermen funded the program — ]was reported as $608,065. That would leave an unspent amount of $855,901 available for projects identified by Commercial Fishing Resource Funding Committee.

Committee member Andrew Berry, a commercial fisherman representing North Carolina Watermen United, asked: “How did the cost of the observer program double when we had the most closures?”

Under the law, proceeds from the extra license fees are to be held by the state Treasurer in a separate, dedicated fund that is invested, with any interest going to the State’s General Fund.

Daniel said in the letter to the Treasurer that the funding request was to pay for developing sustainable commercial fishing. But the committee handles those projects, and the statute says the director can withdraw funds only for the costs to comply with the Section 10 permit.

In a 2016 question-and-answer audit, Daniel said the cost of the Section 10 permit program was $1.3 million, although questions were raised about the high amounts unspent in the two previous years’ budgets. He said that the $1.3 million amount would be the cost for observers if there were no area closures in the state throughout the year.

Daniel resigned as DMF director in February 2016 and was assigned to the shellfish sanitation unit before leaving state employment a few months later.

DMF staff said in an interview Jan. 13 that the money is being used to pay for the entire Observer Program and includes the cost of sampling and data collection needed for stock assessments and fisheries management plans. This work was described as being conducted during the staff’s “down time.”

The statute specifies that the funds are to be used to fund the state’s incidental take permits for the commercial fishing industry under the federal Endangered Species Act or the federal Marine Mammal Protection Act.

The base license fees, before the amount added for the observers, goes directly to the state’s General Fund.

But a list of special funds held by the Treasurer’s Office on its website doesn’t list the Resource Fund. Brad Young, press secretary for the Office of State Treasurer, said: “Our Department does not maintain records on this fund.”

Follow-up questions sent to Young have not yet been answered.

Fishermen asked how many of the 1,200 observation trips in 2015-16 were handled by the Marine Patrol, which is charged with enforcing fisheries regulations. It was estimated to be about 30 percent.

Marine Patrol has its own budget for its staff. But under the job descriptions for the Section 10 permit staff, one can be a Marine Patrol officer.

Marine fisheries staff said the officer is not assigned to the Section 10 permit program, but that the officer’s time for observing amounts to equals one full time officer each year. So a law enforcement officer’s salary is being deducted from the permit program funding.




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