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Wednesday, 19 August 2009 14:26

Jackson EDC still taking old board’s heat

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Old records of the Jackson County Economic Development Commission are likely too spotty to complete missing audits from the years 2001 through 2005, although the county and EDC board say they will continue their quest to do so.

“The citizens deserve as much answers as can be provided. I don’t know how much can be provided, but I think everybody is committed to providing as much as they can,” said EDC Chairman Joe Cline. However, “It may be tough to pull the records together.”

Meanwhile, a watchdog group called Jackson County Citizens Action Group continues to dog the county and the members of the EDC, accusing them of a financial cover-up and lack of diligence in safeguarding public funds. Indeed, the entity had a pall cast over it when Jackson County leaders withdrew from the body four years ago and seized its records, citing concerns over financial management of tax dollars.

However, today’s members of the EDC are nearly all new, and they are ready to move on.

While it was actually a violation of state statute for the entity not to perform audits, the all-volunteer board didn’t realize it was supposed to be conducting them until the past couple of years.

“There is obviously some mismanagement and expenditure of small amounts that are not accounted for, but the large sums are fully accounted for,” County Manager Ken Westmoreland said of the missing audit years. “We are talking about nickels and dimes.”

Tom McClure, the director of Partnership Development for WCU’s Millenial Initiative, acted as a de facto director of the EDC during the time period. He kept many of the EDC records in his office and largely ran the entity’s financial affairs and managed its business on a daily basis, even though he was only the volunteer chairman of the board and not a paid director.

The past controversy that most haunts the EDC is the revolving loan fund, even though the revolving loan fund was under the auspice of the county and a nonprofit arm of the EDC called the Jackson Development Corporation. Defaults on revolving loans are actually what prompted the county to withdraw from the EDC four years ago and to pull a somewhat hostile takeover of the JDC’s assets and liabilities.

“Not only were some of these loans in default, but many times in the majority of the cases, the loans were not adequately collateralized,” Westmoreland said.

The loans helped prop up small industries and in turn support job creation. While several loans are still behind, all but one is still making payments, according to County Finance Director Darlene Fox.

This has not satisfied critics, who have attempted to trace the path of public dollars from the county, to the EDC, then to the JDC and finally into the hands of private businesses who have failed to keep up with payments. The JDC was dissolved and assumed by the county, so complaints from the public over the defunct entity’s dealings have landed on the EDC board.

The Jackson County Citizens Action Group has railed against both county leaders and the EDC, asking for answers for nearly two years, requesting public records, compiling their own outlines of events, and making pointed presentations on the issue during public meetings.

Marie Leatherwood, a longtime critic of the EDC, called the entity a “dark hole using taxpayer money with no accountability.”

“The tainted history of the EDC and their equally tainted defunct bankrupt property buying arm know as the JDC has totally undermined any confidence in these entities,” Leatherwood told EDC members at their last meeting.

Cline said that people should understand the current EDC members have nothing to do with the past dealings of a dissolved entity.

“I know the JDC is no longer in existence, but really you are complaining to the wrong people,” Cline said.

Most of the nine EDC members have come on board only in the past year, however, and only two were actually on board four years ago.

One of the new members, Dick Sterka of Sylva, said it was difficult to continually be held accountable for what happened before his time.

“I think everybody is ready to throw their hands in if we are going to be abused like this,” Sterka said following 25 minutes of public criticism at their last meeting by two individuals. “Our hands are tied.”

When Sterka was appointed to the EDC, he thought the controversies of the past were behind them. New bylaws were created and mostly new members were appointed, leading Sterka to believe they had started over from scratch.

“That’s what we thought we did,” Sterka said.

But the EDC was never formally disbanded, so today’s entity inherited the liabilities — both real and perceived — of the old board.

It’s one reason that Dorothea Megow-Dowling, the EDC director up until last week, suggests dissolving the EDC and creating a new one.

“My view as an outsider is that really has to be put to bed before anybody can move forward in any way,” said Dowling, who resigned this month after less than a year on the job. “Information will minimize the conspiracy stuff that goes on.”

That said, Dowling doesn’t think the past should be wallowed in. EDC Board Member Chris Matheson agreed.

“I think what we need to look at is what has gone right and what can we do to make the EDC run like it needs to run. There are so many people wanting to point fingers to the past. I think it counterproductive,” Matheson said.

That said, Matheson understands that members in the community are still confused about what transpired during the EDC upheaval.

“I respect their concerns and their desire to have answers,” Matheson said. “There was so much confusion it was difficult for me to get it straight myself.”

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