Economic Development in Beaufort County: To Whom One Should Hear - Warren Smith | Eastern North Carolina Now

    Publisher's note: This missive, under my op-ed byline, "A Commissioner's View," is the second in a promised series on Beaufort County's troubled Economic Development Commission. The first of the series appeared in BCN on June 18, 2012.

    And while this is my byline, and while all of words expressed below may have well have been mine in any debate on the issue - they are not - most are from citizen Warren Smith.

    Any wise politician (and to the certain consternation of all my many detractors, I have have often been accused of such) picks who he listens to, and wisely, I hear Warren. Considering all of the e-mails that I have received from the man, in these many years since Warren relocated to Beaufort County, I would be unremarkably unwise and politically tonedeath to not have done so.

   To that end, I offer this short tale, in parody, that well describes Beaufort County's infamous relationship with those who use the public's money to pick economic winners and losers, and espouse this process as all that is what we know of Beaufort County's economic development.

The Dependable Pig, and the Proper Dispossession of its Vital Assets


    A traveling salesman stays overnight with a farm family. When the family gathers to eat there's a pig seated at the table. And the pig has three medals hanging around his neck and a peg leg. The salesman says, "Um, I see you have a pig having dinner with you."

    "Yes," says the farmer. "That's because he's a very special pig. You see those medals around his neck? Well, the first medal is from when our youngest son fell in the pond, and he was drowning, and that pig swam out and saved his life. The second medal, that's from when the barn caught fire and our little daughter was trapped in there and the pig ran inside, carried her out and saved her life. And the third medal, that's from when our oldest boy was cornered in the stock yard by a mean bull, and that pig ran under the fence and bit the bull on the tail and saved the boy's life."

    "Yes," says the salesman, "I can see why you let that pig sit right at the table and have dinner with you. And I can see why you awarded him the medals. But how did he get the peg leg?"

    "Well," says, the farmer, "a pig like that-you don't eat him all at once."


Lest One Becomes a Bit Piggy

   As a citizen and small business owner of Beaufort County, the way economic development is practiced in here, I feel a bit like that good, dependable pig, slowly dispossessed of his tasty limbs. As a team-playing citizen, you know that you want to be a benefit to the community, but at what point do you start missing your property to the benefit of others, who have no interest in you whatsoever.

   As a Beaufort County Commissioner, who is hired by election to mind the interests of his community, you tend to see it all bit clearer, at some final point, or at least you should. Slow and steady in practice, I have finally arrived at that point: long ago in increments, and now in whole, and I will no longer spend new Beaufort County public money for any new projects that are not of a far greater benefit to the community than what we have see, largely of late.

   Community minded citizens like Warren Smith, who I have found to be a worthy voice in the wilderness of ideas, brings a fresh perspective to the citizen government table, while providing intellectual cover for those of us who reject the "group-think" bargain that has long been hailed as the proper way to conduct the management of all the moving parts of Beaufort County's governance. Here below in italics, in Warren's own words by e-mail to me (previously unpublished), is a fine example of why Warren is one of the spare, few local folks that I hear to as I make up my mind what to do each day I govern this county.

Gentlemen,

    Respectfully, I have spent 40 years as an active speculator, credit analyst and risk officer at the Chicago Board of Trade. I was a member of the exchange's executive committee, the exchange's Clearing Corporation (bank) and Business Conduct Committee. I cannot impress upon you too deeply how difficult a time even professional entrepreneurs have in conducting profitable ventures.

    There is no discipline or oversight that can replace having one's own money in the project. If professional risk takers do not get it right, then we quite literally do not eat. This is a very serious constraint on selection of projects and motivation for performance. Still, things go wrong, but we pay the price for failure ourselves.

    Beaufort County's 10-year misadventure in extending credit and undertaking real estate speculation in the guise of the Economic Development Commission has been a very predictable disaster. The political process selected the to-be-expected under qualified political appointee for its point man and placed him under the crony supervision of part time hobbyists serving as board members. This has resulted in an agency neglectfully overseen and grossly overfunded whose judgment in project selection has actually proved worse than anyone might have expected. Most of our grant money went to very familiar faces and the industrial parks were dead on arrival. Grant and loan guarantees are being hastily reworked to, hopefully, avoid onerous claw back provisions; meanwhile, the executive director of EDC took a week's paid vacation to work on projects for his other job.

    Going forward, I beg you to holdfast to your promise to keep the EDC and the C of 100 at arms length from the county's new economic development officer and in a strictly advisory capacity. The economic development officer needs to remain independent and concerned for the best interest of the taxpayer. Beaufort County should limit its economic developer to recapturing local tax dollars sent to Raleigh as well as reducing regulation and local taxes. We should never again make use of matching grants, loan and grant guarantees or speculative construction projects. Sadly, trying to imitate entrepreneurship is simply not practical for the public sector.

Thank you,

Warren Smith
  Beaufort County, NC



Excerpted from Civitas ( coincidentally, published in BCN on June 12, 2012):

    Why do politicians continue to try to tinker and micro-manage the economy? Why can't they simply establish an economic climate where all businesses play by the same rules and all enjoy low tax rates and minimal, sensible regulation?

    If businesses can't survive without government privileges like targeted tax credits, it is best they go out of business so their resources can be freed up for other uses. Propping up unsuccessful businesses by government privilege encourages economic stagnation and ties up scarce resources that could instead be used by more innovative and efficient firms.

    Several other states have also implemented their own "new market" tax credit schemes. Illinois experienced the completely predictable consequence of such a policy, as a Chicago-area company receiving nearly $8 million in state tax credits went bankrupt four months later. Indeed, testimony by an Oregon "tax fairness" advocacy group last year revealed that of the ten states that have implemented such a tax credit scheme, three have already stopped funding them.

    North Carolina's economy is struggling more than most states' during this economic downturn, with an unemployment rate fourth highest in the nation. Granting targeted tax credits to risky business investments is not only inherently unfair, but is a recipe for continued economic stagnation. Because it hands out government privileges to certain businesses at the exclusion of others, and would further undermine North Carolina's hopes of economic recovery, HB 1149 is this week's Bad Bill of the Week.



Here below, as a matter public information (not in italics), is EDC Director Tommy Thompson's explanation of the almost "jury duty" that was to further inhibit the completion of his long overdue report to the commissioners.

    In my absence last week, I was told that were certain individuals questioning my jury duty.

    Here are the facts:

    I had been summoned the month before and got excused due to other EDC conflicts - however, I was told there would be no further passes.

    I cleared my calendar for the entire week and called Sunday as directed. I was told to call Monday after 5:30 which I did. I was informed here would be no further need for my services but that I could be recalled later. I don't know what later meant, but since I had cancelled all official meetings, I decided to take the week as vacation to devote full time to the most pressing item on the agenda from home: HB 819 (Sea Level Rise) which was coming up for a vote in the near future. The economic implications for coastal counties, and ours in particular, are huge. Since I had no scheduled meetings, I spent the rest of the week emailing, writing press releases, and speaking with national and international publications. Fortunately, the Senate Committee hearing the bill passed our version unanimously. This afternoon, the House will vote on the bill and I am continuing to work on that.

    I have adequate leave to cover the week, I missed no meetings that I am aware of, and the County Commissioners were sent the written report as requested.

    I'm not sure who is excited or what he or she may be excited about.


The subsequent reply from Citizen Smith is here below (in italics).

    Subject: Thompson's sorry annual report

    Gentlemen (to the county commissioners),

    In the event that Mr. Thompson should assert that the shoddy reports of earlier years were adequate and that the 2011 should be therefore seen as adequate:

    The video of the March 19, 2012, EDC dog and pony show will feature Mr. Richardson very specifically outlining exactly what standards were being required for the 2011 report which by the grace of the county board was being delayed until April 19, 2012.

    Mr. Thompson can be seen in obsequious agreement with the board as to his understanding of the new standard being required. Mrs. Roberson, chairwoman EDC, was present as were EDC directors Klemm and McRoy.

    There is no issue at hand for Thompson regarding old standards to argue with....go to the tape.

Regards,

Warren Smith
  Beaufort County, NC


Mr. Thompson,

    I am one of your proudest critics, yet you always manage to surprise me when it comes to under achievement and self service.

    I have written you several emails questioning the long overdue status of the Economic Development Commission's annual report for 2011.

    My concerns involve this report being properly due on March 15, 2012 (EDC by-laws Article III and NCGS 158). You were given specific instruction by the county commissioners of Beaufort County on March 19, 2012 to present this report no later than April 20, 2012. It was requested several times over the intervening months to no avail.

    Nothing was submitted until June 8, 2012. Strangely, this was immediately after the county commissioners voted 4 to 2 vote on June 4, 2012 to suspend your pay until the report was filed. Obviously, this was quite the attention getter.

    For the record:

    The 2011 EDC report is a transparent publicity piece and what it lacks in completeness it makes up for in pure tripe. By your own admission you have sequestered yourself form the pressing business of Beaufort County, i.e, sale of QSII, preparation of the 2011 report, correction of prior inconsistencies and errors in earlier reports, two (2) clunker industrial parks, etc, ad infinitum. Rather you have purposely allowed inquiries from Beaufort County commissioners, a meeting with our county manager and your own staff to float while you left the misunderstanding that you were on jury duty, in your home county, stand uncorrected.

    Further, during the last week you now tell us that you intentionally chose to work on the tasks which best favor the interests of your next employer rather than the tasks related exclusively to Beaufort County, i.e., clawback provisions from grant which failed to achieve job creation goals, PCS's lay off of employees, the Flanders Filters sale to an out of state venture capitalist.

    I am attaching the emails to Commissioner Klemm and Mr. Randell Woodruff, county manager, which will outline my complaints and questions. This should clarify who is excited and about what.

    Regards and good riddance,

    Warren Smith

     Over Joyed Taxpayer
      Beaufort County, NC


PS: feel free to forward to whoever you might wish.


To Warren in Conclusion

   Warren Smith just keeps sending me these voluminous correspondences, which I find to be always informational, and often entertaining. I do appreciate his dutiful, and most responsible observance of this piece of the county's business, and I am sure it will continue until his satisfaction.

   Warren, I hear you buddy. And next time, tell us how you really feel.
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