Check Sheet for Economic Development Annual Report 2011 | Eastern North Carolina Now

   Publisher's note: I received these well considered questions Warren Smith just before I left to go to the Special Called Meeting for Monday night, August 19, 2012. These questions are noteworthy in content, and will be part of the public dialogue as the Beaufort County Commissioners shift into their budget season.

    Watch for the irrelevant claim that thousands of jobs have been lost since 1980. Actually, healthy economies lose old jobs and create new jobs continually. Old industries vanish and new firms arrive. Market dynamics sift winners and losers. Beaufort County's unemployment tracks regional and state unemployment. In booms we are at 5%, in busts we are at 12%, today we are at 11%. Our highest employment ever was in 2007 long after the big employer exodus. This is all independent of the EDC.

    Watch for failure to provide the necessary job verification from the NC Employment Security Commission. In 2010 spreadsheet the EDC included no documentation of its claims for employment. There were significant overstatements.

    • Impressions, reported at 240 jobs by EDC for 2007, was inconsistent with WDN and City of Washington minutes reporting 160 jobs
    • PAS, reported at 230 jobs in 2010 by the EDC in 2010, was given an established employment number of 137 by the One NC Fund.
    • Carver Machine was stated as having 72 jobs by the EDC in 2007, but the state grants for Carver established a baseline of 67 employees.

    The industrial park had 39 private firm employees in 2010. Are there fewer 2011 jobs at the industrial park?

    Concerning EDC grants, it should be remembered that the cited grant totals:

    • Consists in large part of money and loans sourced directly from local taxpayers as capital expenditures and matching grants
    • Even grants from the state are actually money local taxpayers have contributed by means of state income and sales taxes, etc.
    • Local taxpayers have cosigned on $850,000 of these state grants (City of Washington minutes 2.26.07).
    • $2,000,000 of these grants were used for the salaries of the two person EDC.
    • No grants awarded from mid 2007 through late 2011

    Watch for inclusion of irrelevant grants to the total. In 2011 the report included:

    • Chocowinity Industrial Park grant of $1,175,000 postponed since 2008
    • Chocowinity Industrial Park grant of $206,450 postponed since 2008
    • Errors in addition of $150,000 that favored EDC image

    Watch for grants announced after the period being reported on has closed. In 2010 the reporting period was closed on July 20, 2010, however, the report included:

    • Fountain grant announced in November 2010 for $150,000...eventually canceled
    • PAS grant announced on December 14, 2010 for $1,600,000...fate unknown
The Spinrite grant was announced in January 2012. It is not a 2011 achievement.

    Check Sheet for Economic Development Annual Report 2011 (continued)

    Questions:

    What are the baseline employment numbers for each grant? Only jobs above baseline are new jobs. Baseline numbers will be important when analyzing grant compliance for new jobs at PAS (job baseline 137: One NC 12.14.10) and Carver Machine (job baseline 67: City Washington minutes 2.26.07).

    How much of the available grant money has been "pulled"? How much remains available? Are grant-funded projects on budget? Are project costs being fully reimbursed? Will taxpayers need to fund cost over-runs?

    Are there any discussions of the costs of the EDC's operations to taxpayers or of the cost per job incurred by each individual grant? (Industrial Park Strategy: estimated $250,000/job created)

    Are the By-Laws observed by the report?

    Beaufort County Economic Development Commission By-Laws July 3, 2001:

    Article VIII paragraph 6 of the Beaufort County Economic Development Commission By-Laws requires specific reporting standards which:

    "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."

    Article VIII paragraph 8 of the EDC 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."

    Finally, is Beaufort County still a Tier 1 county?