Letter to the Commissioners, March 16, 2012 | Eastern North Carolina Now

Beaufort County Commissioners
121 W. Third Street
Washington, NC 27889

Dear Commissioners:

    It has been nearly two years since the Beaufort County Economic Development Commission has made public a report of their performance. The last report was as of July 20, 2010. It was less than fully informative.

    The Economic Development Commission's By-Laws of July 3, 2001 require convening an annual meeting in March. At this meeting there is to be a formal presentation of an annual report. Was such a meeting held in 2011? Are these meeting not covered by the Open Meeting Laws?

    In regard to the July 2010 Report's treatment of grants, it included items for Fountain and PAS that were not awarded until after the closing date of the report; there were grants mentioned which were perpetually postponed and eventually cancelled. There were also outright errors in addition. All of these errors and inappropriate inclusions were flattering to the EDC.

    In regard to the July 2010 Report's treatment of jobs created and retained, there were a number of inclusions of jobs expected or hoped for but not actually yet created. Inclusion of these "hoped for" jobs was flattering to the performance of the EDC in the periods considered.

    In particular,
    • Impressions 240 jobs were reported for the year 2007, however, the Washington Daily News reported in June 2007 that Impressions was employing 160; and the City of Washington Council minutes reported 162 jobs at Impressions in August 2007.
    • Carver Machine Works is claimed as an 82-job credit in the report, yet Lindsey Crisp, CEO of Carver, appeared before the Beaufort County budget hearing in June 2011 and discussed a much lower job creation.
    • PAS is shown as having 230 jobs, however, the One NC Fund stated on December 14, 2010 that PAS had a grant baseline of only 137 jobs.

    The overall report of July 20, 2010 is more confusing than informative. The notation beneath the spreadsheet for jobs discusses "Total Jobs" as consisting of both "jobs added" and "jobs retained" net of the "baseline". However, nowhere in the report is any firm's baseline number ever stated. How can readers and taxpayers judge a grant's successes without knowing the employer's initial baseline? There is no specification of how many jobs were added as opposed to retained. Every job is credited to the EDC whether it existed previously or was created after the involvement with the EDC. Hackney, a firm that has existed in this county for generations is grabbed as a 106-job credit when it first appears in the spreadsheet. Carver Machine Works, a firm with decades of employment history, is picked up as a 72 job credit in 2007; although, Carver had been an ongoing enterprise for decades and the CEO described the firm to the Washington Daily News as employing only 65 people as late as June 2007. Nowhere is there any mention of wages from the jobs created. The jobs spreadsheet raises more questions than it provides answers. State law requires that grant recipients file job creation reports with the NC Employment Security Commission, but this report includes no such data.

    Article VIII paragraph 6 of the EDC By-Laws would seem to be violated by the haphazard approach to record keeping in this report, i.e., "Maintain appropriate fiscal and financial records as required by the Commission and other authorities for a period as designated in the general and special terms and conditions of the grant and in accordance with the laws of the State of North Carolina."

    Discussions of the property tax triumphs of the EDC in the report are entirely confused and confusing.

    There is no presentation of the costs and expenses associated with the operation of the Economic Development Commission. However, Article VIII paragraph 8 of the by-laws requires: "The preparation and presentation to the Commission of an Annual Report of the Economic Development Commission that enumerates the activity and efforts of the Commission for the previous fiscal year, activities currently in progress, and initiatives that will be undertaken in the upcoming year. This report will relate the expenditures of staff time and the Commission budget to major areas of activity."

    Hopefully, this year's report will be of more value to the taxpayers than earlier reports.

    In regard to the industrial park:

    • Is Brooks Boat Works still operating at the industrial park?
    • What is the jobs census at the industrial park?
    • What is the listed sales price for Quick Start II?

    Finally, are we all ready to concede that there was never an "86% study"?

    Taxpayers and voters need more sunlight, gentlemen. Shoddy record keeping is the hallmark of poor oversight. The EDC's manner of doing business creates risks and liabilities that the community is ill prepared to assume. The Economic Development Commission has created this mess, but you have allowed it to continue.

   Regards,
   Warren Smith
   Beaufort County