Third in a series

WILMINGTON – A former Florida-based Army Corps of Engineers employee who pleaded guilty earlier this year to lying to investigators about getting paid by an environmental consulting firm in assisting with contract negotiations and sharing sensitive internal government information did not have a hand in the Wilmington harbor improvement project, according to an official with North Carolina State Ports Authority.

Tracey Jordan Sellers, a civilian employee with the Corps’ Jacksonville, Florida, District, pleaded guilty in July of making false statements to Department of Defense investigators about working part-time for a private firm on a handful of projects, two of which were in North Carolina.

The Joint Factual Statement filed July 12 in U.S. District Court for the Southern District of Florida does not identify the company or the specific projects in which Sellers was involved.

Bethany Welch, the ports authority’s senior manager of communications and business outreach, said in an email that Dial Cordy and Associates, which has a regional office in Wilmington and is headquartered in Jacksonville Beach, Florida, helped prepare the ports’ draft feasibility study and environmental report for the proposed harbor project.

“Tracey Sellers was in no way involved or contacted for any information in the feasibility study by Dial Cordy,” Welch said.

Dial Cordy President and CEO Steve Dial did not return a call seeking comment.

In comments submitted to the Corps’ Wilmington District, lawyers representing the Village of Bald Head Island question whether Sellers may have worked on the project.

“While none of the Plea Agreement, Joint Factual Statement, or news report say that Dial Cordy & Associates was the environmental consulting company for whom Ms. Sellers worked, given that Dial Cordy was involved in Florida and has offices in Wilmington, North Carolina, and may have been involved in the North Carolina projects (especially in light of the dates of the referenced projects), we believe these questions merit further investigation,” the letter states. “If in fact she worked on this project, this omission in the Draft Report disclosures should also be investigated and explained,” lawyers for the Brooks Pierce law firm wrote.

“… we believe these questions merit further investigation.”

Brooks Pierce law firm’s letter to the Corps

Sellers, a biologist, was contacted in November 2014 via email by a senior member of the unidentified company offering her a part-time job, “related to a bid proposal that COMPANY planned to submit to a state agency in North Carolina,” according to her statement.

Sellers, without seeking or getting approval from Corps ethics officials, provided her resume to the company and “reviewed and made suggested edits” to part of the company’s bid proposal, the statement said.

“Because the state project would later be reviewed by USACE’s Wilmington District, Sellers agreed to limit her participation to ‘technical writing support only’ and suggested that she not attend any meetings with USACE,” the statement said.

Sellers did not receive pay for the work.

She was offered a second part-time job on another project in North Carolina by the same senior member of the company in October 2018.

This project would also be reviewed by the Corps’ Wilmington District, according to the statement.

Sellers, again without authorization from the Corps, “provided advice about the project and asked for a contract for her services,” the statement said.

The company agreed to pay her up to $9,000 over six months at a rate of $50 per hour.

Sellers, who was sentenced in September, also worked with the consulting firm on major dredging projects in south Florida and negotiated a contract for a job with the company on a proposal for a project in Louisiana, the statement said.

“All of the foregoing issues potentially bear on the reliability and credibility of the materials being submitted to the Corps for consideration in its evaluation of this project,” Brooks Pierce lawyers said in their letter to Wilmington District.

They conclude by asking district officials to disregard the entire draft report and investigate and determine the circumstances under which the report was prepared.

The Wilmington District did not respond to questions from Coastal Review Online by deadline.

Lawyers for the island have expressed a number of concerns about the proposed project to widen and deepen with harbor channel to make way for larger container ships operating out of Asia.

Those concerns include the potential impacts dredging the channel to a deeper depth will have on Bald Head’s beaches.

The Corps of Engineers Wilmington District is in the beginning stages reviewing the harbor project through the National Environmental Policy Act, or NEPA, process.

Second in a series

WILMINGTON – Dredging, sandbags and sand-filled tubes, beach renourishment projects and a terminal groin – all have added up to millions spent to combat erosion on the Village of Bald Head Island’s beaches.

Within the past 15 years, more than $47 million has been spent on a multitude of erosion mitigation projects on Bald Head’s shores where, island officials maintain, sand loss has been exacerbated since 2000 when the Cape Fear River’s navigation channel was deepened, widened and realigned closer to the island’s west and south beaches.

The village took the fight to protect its beaches to court in a December 2010 lawsuit against the Army Corps of Engineers. The lawsuit alleged the Corps was in breach of contract of its dredge-and-sand-disposal schedule to return dredged, beach-quality sand every two years during a six-year cycle onto the island’s shoreline.

A district court judge dismissed the lawsuit. In 2013, the U.S. Court of Appeals for the 4^th Circuit upheld the district court judge’s ruling.

The North Carolina State Ports Authority is initiating another harbor project, one that proposes to further deepen and widen the river channel to accommodate larger ships sailing from Asia to the East Coast.

“We do know that the channel, to date, has done a lot of damage to the beaches and we’ve had to spend $47 million protecting those beaches,” said Bill Cary, an attorney representing the island. “The current draft report does not commit to placing sand on the beaches. It does not evaluate any erosion impacts. And, now they’re making it bigger, deeper, wider?”

Meaningful public involvement

Cary, who is with the law firm Brooks Pierce, said island officials have not been given the opportunity to adequately voice their concerns through the process under which the ports authority is pursuing federal authorization and congressional approval for the harbor project.

Under amendments signed into a law a year ago for Section 203 of the Water Resources Development Act of 1986, ports can pay for project feasibility studies and environmental reports rather than wait for federal funding to cover the costs of those studies.

Nonfederal sponsored projects have to get federal authorization before moving forward and, in order to receive federal funds, projects must complete the National Environmental Policy Act, or NEPA, process, which is headed by the Army Corps of Engineers.

NEPA includes soliciting public comments.

But Cary argues that the public should have been given the opportunity to provide input throughout the Section 203 study process.

In a letter dated Aug. 29 to North Carolina State Ports Authority Executive Director Paul Cozza, Cary wrote that the ports authority’s report “was prepared essentially behind closed doors, without public input.”

“The lack of public input affects the analyses and conclusions of the entire NCSPA Report,” he wrote. “An after-the-fact NEPA review (as NCPA now proposes) cannot cure the failure to involve the public from the outset.”

“The lack of public input affects the analyses and conclusions of the entire NCSPA Report.”

Bill Cary, attorney

Cary goes on to write that the ports authority should withdraw the report and “fully involve the public in the scoping and analyses required, as contemplated by the Section 203.”

“Given the history of the Channel’s impacts on Bald Head Island, the exclusion of the Village and the public from any meaningful input into the design and plan of NCSPA’s proposed project is all the more troubling,” Cary said.

The ports authority hosted a public information meeting on the proposed project on Aug. 8, 2018.

“There was no speaker,” Cary said. “There was no question and answer period. We had fully expected that public scoping and public involvement means public meetings. There weren’t any other subsequent public meetings.”

Bethany Welch, the ports authority’s senior manager of communications and business outreach, said in an email that the ports made multiple efforts to reach out to elected officials in surrounding communities throughout the Section 203 study process.

Welch said that in February the ports executive team met with Bald Head Island officials to talk about the Section 203 process and “create an open dialogue, and to answer any questions or address any concerns.”

Village Manager Chris McCall said that meeting was the first and only one island officials have had with ports officials.

“They talked about the project, but they were still in the working stages of the feasibility study and at the time they didn’t have much in the way of details,” McCall said. “Up to this point there hasn’t been much in the way of public involvement and that needs to happen as this thing moves forward. For folks to think that the channel has zero effect on Bald Head Island is not accurate to say. We’re not looking to fuel any flames on this. We just want to make sure the process is followed correctly and that we have opportunity to work with them. If it happens we just want to make sure there are things in there like the mitigation funding that will help with costs of things down the road.”

Audubon North Carolina Executive Director and National Audubon Society Vice President Andrew Hutson said in a statement that the project could be an opportunity to create and protect bird habitat.

“As we saw from a similar harbor project in 2000, this effort could have significant impacts on birds,” he said. “But there’s a huge opportunity here to turn lemons into lemonade. Dredged material and other long-term mitigation measures can create and protect bird habitat. We will be following the process closely to make sure we don’t lose this opportunity.”

The ports authority has established the email address WH203study@ncports.com for the public to submit questions, comments or concerns.

The ports will continue to update its website with up-to-date information as it becomes available, Welch said.

“It is our goal to be as transparent as we can throughout the duration of this project,” she said. “We encourage any and all public feedback.”

NEPA process just beginning

During a public scoping meeting hosted Sept. 26 by the Corps of Engineer’s Wilmington district, Cary pressed Corps staff about the Section 203 study process.

Jenny Owens, the district’s environmental resources section chief, told the crowd of roughly 30 people gathered in a room of the Coastline Convention Center in downtown Wilmington that the Corps is at the very beginning of the NEPA process.

She said the Corps is waiting for the ports authority’s response to the Office of the Secretary of the Army for Civil Work’s review of the Section 203 report.

The Corps last month opened a 30-day public comment period on the proposed harbor project.

Those comments will be reviewed as part of the preparation for the draft environmental impact study, or DEIS.

The DEIS will identify resources that exist in the proposed project area, including fisheries and river bottom habitat, threatened and endangered species, and human and cultural resources. The study will examine the potential impacts the proposed project to those resources, water and air quality, and potential hazardous and toxic wastes.

Comments will be accepted at WHNIP203@usace.army.mil through Oct. 12.

The Corps will continue to solicit public input throughout the NEPA process, which could take at least a year or more to complete.

Learn more

• Read Part 1: Federal Review Finds Port Study Deficient

Next: Was the draft report credible?

First in a series

This story has been updated to correct a misstatement regarding the Wilmington port’s 2017 cargo statistics.

WILMINGTON – The Wilmington Harbor Navigation Project is the first in the United States to be funneled through a national review process that gives ports more flexibility in building their projects.

Ports are allowed under the amended Section 203 of the Water Resources Development Act signed into law a year ago by President Trump to kick off projects more expeditiously by paying for their own feasibility and environmental studies rather than waiting for federal funding.

Under Section 203, nonfederal projects have to receive federal authorization and go through the National Environmental Policy Act, or NEPA, process in order to receive federal funds.

As it stands, the North Carolina State Ports Authority’s draft feasibility study must be heavily revised before it would pass muster, according to a federal review of the study.

The feasibility study and the process under which it was conducted are also being criticized by at least one beach town questioning how the proposed project to widen and deepen the harbor channel might affect its beaches.

‘Needs significant revisions’

Assistant Secretary of the Army for Civil Works R.D. James would not likely make a “positive determination of project feasibility” based on the current draft study, according to the secretary’s office and Army Corps of Engineers’ headquarters staff.

Without James’ recommendation for approval by Congress, the project cannot move forward.

His office in July released a review summarizing the ports’ feasibility study/environmental report as one that needs “significant revisions before it would be considered to be legally and policy sufficient.”

The 15-page review details deficiencies in the ports authority’s report, including the lack of a thorough economic analysis.

“North Carolina Ports is in the process of writing its comments to the Office of the Secretary of the Army for Civil Work,” Bethany Welch, the ports’ senior manager of communications and business outreach, said in an email.

The draft feasibility study calls for deepening the main shipping channel through the Cape Fear River from 42 feet to 47 feet and the ocean entrance to the river from 44 feet to 47 feet. The plan also recommends widening the channel in multiple areas.

Those new depths and widths would allow the Wilmington port to remain competitive with other East Coast ports by making room for larger container ships coming to the East Coast from Asia.

Ports officials say the changes would accommodate vessels that can carry 14,000 20- by 8-foot shipping containers.

Ships of this size can now be navigated through the Panama Canal, a newly expanded portion of which opened in June 2016.

In order for these larger ships to call at the Wilmington port, the width of the port’s turning basin also needs to be expanded by 124 feet, ports authority officials say.

The North Carolina Division of Coastal Management earlier this year rejected the ports authority’s application for a Coastal Area Management Act major permit modification to widen the turning basin.

The ports authority appealed the denial and, last April, the Coastal Resources Commission granted a variance for the project, which includes dredging 17.76 acres designated primary nursery area, or PNA, and the excavation of a little more than one acre of coastal wetlands.

In its variance request, the ports authority said that without the turning basin expansion, the Wilmington port “would lose the ability for North Carolina to maintain presence in the global container shipping market,” which would, in turn, adversely impact the state’s economy.

That argument is one of several points of concern discussed in the federal policy review assessment, which states that the planning objectives in the draft feasibility study are unclear and “could potentially lead to the pre-selection of an alternative plan.”

The review goes on to state that the ports authority’s feasibility study lacks documentation from shipping companies supporting the argument that those companies would not use the port.

The study appears to overestimate future shipping projections from the Asia route, according to the review.

The ports’ economic analysis assumes that by 2025, 272,615 vessels from the Asia route would use the Wilmington port. That’s nearly double the number of ships – 179,713 – from non-Asia routes projected to call at the port within that same time period.

The Waterborne Commerce Statistics Center, or WCSC, indicates that the Wilmington port handled 178,865 TEUs, or twenty-foot equivalent units — a measure of shipping container volume, during 2017.

The ports authority’s study projects a 137% increase in shipping traffic between 2017 and 2025.

“It appears that the commodity forecast has been significantly overestimated,” the review states. “Correcting that error would result in a dramatic reduction in project benefits.”

The review also calls into question the study’s assumption that 100 percent of the shipping fleet from Asia will transition to the largest shipping container vessels, a presupposition that the review says is “unrealistic.”

Environmental considerations

The feasibility study also lacks information about alternative dredging depths, the potential implications of those alternative depths to the environment, and the effects of sea level rise.

Maintaining the port for the next 50 years to accommodate larger ships from Asia “seems to be a corporate objective rather than a planning objective,” and that “it seems that depths between 42’ and 46’ were eliminated from consideration due to flawed objectives,” according to the assessment.

Jerry Diamantides, senior economist with contractor David Miller & Associates, told the authority’s board of directors in August that the feasibility study showed that deepening the channel to 47 feet would have only minor environmental impacts.

But the study should look beyond channel depth increments and include detailed alternatives such as relocating facilities, according to the federal assessment.

Federal reviewers also said the report understates environmental effects of the project, including its impact on river bottom habitats. The study needs to more accurately describe the long-term or permanent effects the project will have on that habitat, according to the assessment.

The port authority’s environmental study also needs to fully integrate impacts of sea level rise, including future changes in water levels, saltwater intrusion, and induced flooding.

It is unclear when the ports authority will turn over a revised study to Washington. Ports authority officials have said they hope James will recommend the project to Congress before November 2020.

Next: Lack of public input at issue