A Review of Mississippi’s Public Trust Tidelands Program and Selected Areas of Operation of the Department of Marine Resources
Executive Summary
PEER sought to determine the Department of Marine Resources’ and Secretary of State’s compliance with state laws governing the tidelands trust fund program, including the Department of Marine Resources’ administration of the tidelands grants and the Secretary of State’s expenditures for the administration of the Public Trust Tidelands funds.
PEER also addressed the following specific concerns relative to the Department of Marine Resources (DMR)--i.e., whether DMR is:
assessing and collecting fines for coastal wetlands permit violations as authorized by the Mississippi Code and whether the department is collecting appropriate fees for individual coastal wetlands permits;
attempting to bypass the state personnel system by hiring full-time employees on a contractual basis; and,
operating efficiently in its purchase and use of non-law enforcement motor vehicles.
The Public Trust Tidelands Program
The Department of Marine Resources’ Administration of the Public Trust Tidelands Grants
The Department of Marine Resources approved $781,000 in FY 2002 tidelands projects that did not meet the statutory criteria for use of tidelands funds and $482,000 in FY 2002 projects that did not contain sufficient documentation to show whether they met the criteria for use of tidelands funds. Also, the department issued $4.7 million to grant recipients without prior documentation of completed project work.
Administration of FY 2002 Tidelands Grant Projects
The Department of Marine Resources received 123 applications for FY 2002 tidelands grants, including eighty-six applications for tidelands management projects totaling $10 million and thirty-seven applications for public access projects totaling $11.6 million. With approximately $5 million to distribute, the department approved eleven tidelands management projects totaling $1.5 million and twenty-four public access projects totaling $3.5 million. The Legislature funded these thirty-five projects as separate line items in DMR’s FY 2002 appropriations bill. Also, the Legislature added one project totaling $50,000.
In FY 2002, the Department of Marine Resources approved six management projects totaling $681,000, or 45% of funds allocated for tidelands management projects, that did not meet statutory requirements for use of tidelands funds. The department also approved two management projects totaling $232,000 that did not contain sufficient documentation to show whether they met the criteria for use of tidelands funds.
The department approved one FY 2002 public access project totaling $100,000 that did not meet statutory requirements for use of tidelands funds. DMR also approved two public access projects totaling $250,000 that were originally proposed as management projects, but were included in the FY 2002 appropriations bill as public access projects. Neither of the projects contained sufficient documentation to show whether they met the criteria for either a tidelands management project or a tidelands public access project.
Payment of Tidelands Grants
The Department of Marine Resources issued checks for $4.7 million to FY 2002 grant recipients prior to performance of the grant projects and without performance reports, which describe project goals and objectives, milestones, and proposed benefits. Good management principles require documentation of completed project work prior to receiving tidelands funds.
The Secretary of State’s Administrative Expenses
During FY 2002, the Secretary of State’s Office paid $1,927 in tidelands funds for administrative expenditures not related to the tidelands program. Also, the office should have allocated $149,504 in expenditures between the tidelands programs and other programs.
State law provides that funds derived from tidelands lease rentals be used to pay only those administrative costs related to the tidelands program. The Secretary of State’s Office divides its administrative expenses into four categories: operating, equipment, legal, and contract. PEER found that the Secretary of State’s Office has paid expenses from the operating and contract categories with tidelands funds, although these expenses were not related to the tidelands program.
Operating Expenses
In FY 2002, the Secretary of State’s Office paid office rent and travel expenses not related to administration of the tidelands program from tidelands funds. Also, because the Secretary of State’s office does not have records to show the portions of other expenses that relate to the tidelands program versus other programs, the Secretary of State cannot properly allocate operating expenses among programs.
Contract between the Secretary of State and the Department of Marine Resources for the Coastal Preserves
The Secretary of State includes as an administrative expense the amount paid for its contract with the Department of Marine Resources for the management of the Coastal Preserves ($93,917 in FY 2002), even though the boundaries of the Coastal Preserves are not restricted to Public Trust Tidelands.
PEER does not question the economic and ecological value of the property within the Coastal Preserves. However, it is clear that all of the funds paid to the Department of Marine Resources by the Secretary of State are not administrative costs incurred by the Secretary of State for administration of the Public Trust Tidelands Fund or lands acquired in exchange for tidelands.
Collection of $150 Application Processing Fee for Public Trust Tidelands Applications
The Secretary of State collects $150 from each Public Trust Tidelands lease applicant, but does not apply this amount to the costs incurred for administration of the Public Trust Tidelands Fund. The fee is incident to tidelands leases and should be deposited into the Public Trust Tidelands fund to offset administrative costs.
The Secretary of State’s Transfer of State-Owned Public Trust Tidelands to Private Entities
The 1996 transfer of tidelands to the Mirage Corporation through court order was a valid transfer under law. PEER would, however, note that absent a transfer of tidelands needed to settle claims under MISS. CODE ANN. Section 29-15-7 (1972), all transfers should comply with the historical two-step process requiring a higher public purpose and legislative approval customarily applied to tidelands and as affirmed by the Mississippi Supreme Court.
In 1996, the Mirage Corporation planned to construct a casino on the Mississippi Gulf Coast. The casino ultimately developed is known as the Beau Rivage. Mirage wanted to own title to approximately 6.73 acres of tidelands property for the hotel site rather than enter into tidelands leases with the Secretary of State. Approximately 4.03 acres of this land had been filled since World War II and was state-claimed land. However, the remaining 2.7 acres was undisputed tidelands trust property. The 2.7 acres was to be used, along with the other property, for the hotel site and would ultimately be filled to meet the needs of casino development. To compensate the state for a transfer of title to the above-described lands, the developer proposed to transfer title to 4,225 acres of wetlands held that could be placed in the Coastal Preserves Program. Because of their location in an area covered by the Coastal Preservation Act, the wetlands to be exchanged were worthy of preservation.
To expedite the transfer of title to the state property, the Secretary of State petitioned the Chancery Court for the Second Judicial District of Harrison County for authority to complete the exchange. The court found the transfer to be legal and authorized the Secretary of State to proceed with the transfer.
Although PEER does not question the legality of the transfer of the tidelands to the Mirage Corporation, transfers without a specific legislative authorization, except for those necessary to settle claims to tidelands, deprive the Legislature of its traditional authority over the exchange of public lands.
Status of Specific Complaints Concerning the Department of Marine Resources
As previously noted, when conducting this review, PEER also addressed the following specific allegations by complainants:
the Department of Marine Resources does not assess and collect fines for coastal wetlands permit violations or fees for individual coastal wetlands permits;
the department does not operate efficiently in its purchase and maintenance of non-law-enforcement vehicles; and,
the department attempts to bypass the State Personnel Board by hiring full-time employees on a contractual basis.
Wetlands Permitting
The Department of Marine Resources’ Coastal Wetlands Permitting Bureau does not collect fines for wetlands permit violations as authorized by MISS. CODE ANN. § 49-27-51 (1972), does not collect public notice fees from all individual permit applicants as required on the wetlands permit application, and does not routinely review actual public notice costs to ensure that the public notice fees cover these costs.
Assessment and Collection of Fines for Wetlands Permit Violations
The Department of Marine Resources’ Coastal Wetlands Permitting bureau is responsible for issuing wetlands permits. The purpose of the permitting process is to regulate those activities that might adversely impact coastal wetlands in order to preserve and protect these sensitive habitats.
In FY 2002 the Department of Marine Resources issued five after-the-fact authorizations and collected no fines for work performed without a permit. Simply allowing a violator the opportunity to submit an after-the fact application for activities that are governed by state law without imposing a penalty does not serve as a deterrent to future violations. Without a deterrent to wetlands permitting violations, they are likely to continue, thus increasing the opportunity for damage to Mississippi’s coastal wetlands and their ecosystems.
Public Notice Fees
State law requires that for individual wetlands permit applications, the department must run a public notice for three consecutive weeks in at least one general circulation newspaper in the county. The newspapers charge for the ads by the number of words included, so the costs of these notices vary.
The Department of Marine Resources’ Coastal Wetlands Permitting Bureau does not collect public notice fees sufficient to cover the costs of issuing required public notices for individual wetlands permits. The department has charged $50 for the public notices; however, in FY 2002, DMR’s actual public notice costs ranged from $75 to $328. Also, the department does not collect fees from all applicants.
This has resulted in the department’s using special funds to pay the difference between the amount collected from the wetlands permit applicants and the actual cost for public notice fees in FY 2002.
Use of Non-Law-Enforcement Motor Vehicles
DMR does not maintain complete usage records on any of its twelve non-law-enforcement vehicles. While not required by state law, such records are critical to documenting the need for state-owned vehicles.
DMR does not consistently maintain trip destination, mileage, and purpose records on its non-law-enforcement vehicles. Of particular significance is the lack of trip records on the eight vehicles that DMR permits staff to take home overnight. Sixty percent of the mileage driven on these vehicles is for commuting between home and work.
Hiring of Contract Employees
Complainants alleged that the Department of Marine Resources routinely fills multiple positions with contract employees to bypass the state personnel system. PEER did not find this to be a widespread problem. Of the department’s 149 employees, six are contract workers; two fill full-time positions for which the agency has documented a need.
These two contract workers occupy positions for which the agency has documented a need. The department has not formally requested the Legislature to appropriate funds and position identification numbers for these positions. This failure to address a full-time continuing staffing need by hiring contract employees bypasses the competitive nature of the merit selection process of the state personnel system.
Recommendations
The Department of Marine Resources should create two separate tidelands grant applications, one for management projects and one for public access projects. The department should require the applicant to describe in detail how the project will meet the requirements of the Public Trust Tidelands Act (MISS. CODE ANN. 29-15-1 et seq. [1972]) and the potential benefits that would be derived from receipt of such funds.
Should tidelands management or public access projects that are not included on DMR’s comprehensive list be considered for funding during the appropriations process, the Legislature should refer such projects to DMR. The department should evaluate the merits of such projects in accordance with the same evaluation criteria used to compile the list initially submitted to the Legislature and report the results of the evaluation to the Legislature prior to the conclusion of the legislative session. The Legislature should ensure that all projects receiving tidelands funds have been objectively and equally evaluated and are in compliance with statutory provisions for the use of such funds.
The Secretary of State should develop written procedures to ensure that tidelands funds are only being expended on administrative expenses associated with the tidelands program. The Secretary of State should prorate expenditures of tidelands and other programs so that tidelands funds are only used to pay that portion of the expenses related to administration of the tidelands program.
If the Secretary of State’s Office wishes to argue that the term ‘ecosystem’ as used in the state’s Public Trust Tidelands law is equivalent to the land included in the current boundaries of the Coastal Preserves, it should consider requesting the Legislature to include this definition in state law before expending any more tideland trust fund money on Coastal Preserves lands that are not either tidelands as defined by state law or lands acquired through tidelands boundary settlements.
The Appropriations committees of the House and Senate should create a tidelands program within the appropriations bill of the Office of Secretary of State. This would add line items that could be monitored and would increase accountability for funds.
The Secretary of State’s Office should apply the $150 it collects from each Public Trust Tidelands lease applicant to the costs incurred for the administration of the program, rather than depositing these funds into the Secretary of State’s general operating fund.
Except in cases where a transfer of title is necessary to settle a tidelands claim, the Secretary of State should only convey Public Trust Tidelands where such satisfies a higher public purpose and is specifically authorized by the Legislature.
The Department of Marine Resources should increase the fees for public notice from $50 to the actual cost of running a public notice in order to reduce or eliminate the amount of special funds spent on this service. DMR should determine the actual costs of the public notice (based on the number of words) and require wetlands permit applicants to pay the actual costs of public notice fees prior to running the public notice. The Department of Marine Resources should include this requirement in its coastal wetlands policies and procedures. The requirement should include government entities that have not been charged a public notice fee in the past.
In order to protect Mississippi’s coastal resources, the Department of Marine Resources should develop a routine inspection process with a proactive approach for identifying wetlands permit violations. The Department of Marine Resources may want to consider re-allocating a vacant PIN, when one becomes available, and locating it within the Coastal Wetlands Permitting Bureau as an additional resource to assist in handling inspections of coastal wetlands.
The Department of Marine Resources should enforce wetlands permitting regulations and utilize the enforcement tools available under MISS. CODE ANN. § 49-27-51 (1972). The agency should actively use fines to deter individuals from violating the wetlands permitting regulations.
DMR should require its employees who drive vehicles to complete legible daily mileage logs, including details of destination and purpose, and show clearly who drove the vehicle each time. If writing is illegible, they should have to submit typed logs. The utilization of motor pools should be the policy for all vehicles, unless it is proven through documentation on the mileage logs that employees need individually assigned vehicles on a daily basis.
DMR should require on-call logs to be documented for all employees who work off-duty hours. Also, the department should require an employee who responds to a call to document what circumstance arose that necessitated the employee being called in after hours.
The vehicles that are presently being driven home for the purpose of answering calls should be left at the DMR offices to improve efficiency of use unless the mileage log documentation can prove that the need is valid.
The department should conduct breakeven or other needs analyses to determine whether to purchase vehicles and if so, what type to purchase.
If the need for a full-time licensing support employee and mitigation expert continues, the Department of Marine Resources should request the Legislature to appropriate funds and PINS for these positions and the agency should select persons competitively to fill these positions.