Commissioners discuss economic development....again | Eastern North Carolina Now

    Publisher's Note: This article originally appeared in the Beaufort Observer.

    There was an interesting discussion at the July 2, 2012 Beaufort County Board of Commissioners' meeting. The topic was the economic development program in Beaufort County.

    If you've not been keeping up, listen to Warren Smith's presentation in the Public Comments section of the meeting. He details how much money has been wasted on a failed attempt to improve the economic system in Beaufort County over the last few years, since the Economic Development Commission was created.

    Here are Warren's comments:



    Later in the same meeting Hood Richardson brought up the issue of the re-write of the By-laws of the Economic Development Commission, going over them in detail. It's a bit hard to follow the discussion without the document but you can get the jest of it in the video clips below.

    In the first clip most of the focus is on the by-laws re-write. Remarkably there appears to be agreement on most of those points. As Al Klemm explains, the process is on hold until City of Washington decides what it is going to do about economic development.



    In the second discussion clip you hear a discussion of the severance pay the former Director will be paid. What you hear is how loose the County's personnel policies have been and how poor the oversight of the EDC and its personnel has been in the past. It should be noted that Commissioners Al Klemm and Jay McRoy has sat on the EDC board while all this has been going on.



    Commentary

    We'll leave it to you to decide whether what you hear the Board talking about will correct the problems that have been the hallmark of a colossal failure that is the Beaufort County Economic Development program. The program has spent over six million dollars, and that is a conservative estimate, and the taxpayers have more liabilities to show for it than assets. The program was supposed to produce jobs but it has lost more jobs than it produced, when you consider opportunity costs.

    The structure that has operated has made terrible investments of taxpayer money. Not only did the taxpayer get hit for six million but the costs are much higher when you consider what could have been done had the program operated the way it should.

    What we find most distressing is that Commissioners Al Klemm and Jay McRoy sat on the Economic Development Commission and were active leaders in the Committee of 100 while this debacle played out. Yet they now talk like they want to fix the mess. That begs the question of why they were not on top of this long before now.

    While McRoy and Klemm talked about the role of the EDC Director, they ignored, for the most part, the fundamental problem of the EDC. That problem was.... initially touched upon in Warren Smith's opening comments to the commissioners and fully laid out by Commissioner Richardson shortly afterwards during the regular board meeting. Simply put the EDC's executive director maintained dual positions of authority which creates an inherent conflict of interest. Commissioner Richardson began with an examination of the Committee of 100 IRS Form 990, where it is explained that the EDC's executive director also served as the chief executive officer of the Committee of 100. From this position of authority the executive director/CEO appointed the governing board of the Committee of 100 who, in their turn, approved the salary ($24,000) paid by the Committee of 100 to its chief executive officer. Therefore, as executive director of the EDC, the salaried CEO of the Committee of 100 was the principal agent for procuring grants and assistance for Beaufort County's economic development. The organizational structure as laid out on Schedule O of the Committee of 100 IRS Form 990 (2010) is clearly circular.

    The list of grants originated and disbursed as the accomplishments of the Economic Development Commission, and as reported by Mr. Thompson at his March 19, 2012 presentation before the Beaufort County commissioners, reveals that a disproportionate share of the subsidies and assistance distributed to local businesses by the conjoined organizational effort outlined above went to firms who were associated with members of the Committee of 100 or even members of its board of governors and to income generating rental properties owned directly by the Committee of 100. Other significant expenditures went into the industrial park projects, which more and more seem to have been unsupported by any research or market study. The overall impression is of an economic development program which was neglectfully supervised and was administered to suit the whims of its executive director without any effective oversight or proper project selection.

    This arrangement, and the situation which has arisen from it, was discussed as being in direct contradiction to what county commissioners had understood were their initial guidelines for the EDC. Commissioner Klemm's request that in the future no EDC board member should be allowed to be a member of the Committee of 100 generated unanimous support from fellow commissioners, but he offered no explanation of why, as a long term member of the EDC, he had never objected to the cross-over relationships which seem to have been created without being noticed by county commissioners.

    Is it any wonder that this same group of commissioners allowed the hospital to go down the tubes, overspend the school bond budget by $6.4 million and can't seem to keep up with how much vacation time a county employee who served under them has taken?

    Bless us and save us.