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Members of the Tennessee Valley Authority board of directors recently requested a meeting with Swain and Graham County officials to discuss the TVA’s recent decision to remove all 1,800 houseboats from its 49 lakes within the next 30 years.

Though the Corridor K debate was the impetus for the Opportunity Initiative Study, Opt-In wasn’t all about transportation. The results of the year-long regional visioning study has been enlightening, unifying and awash with great ideas to improve the area’s economic and cultural landscape, said Ryan Sherby, executive director of the Southwestern Commission Council of Governments. 

A stalemate in the debate over Corridor K boils down to a central issue: can upgrades to the existing two-lane road do the job, or is a new four-lane highway the only solution?

coverAfter a year-long study capping off years of debate, the verdict is in on what’s next for the controversial Corridor K road project — sort of.

SEE ALSO: Dueling studies | Beyond the road

There were high hopes for the $2 million Opportunity Initiative Study at the outset: to find a clear answer for whether a four-lane highway through the remote mountains of Graham County is worth the enormous price tag and environmental damage, whether it is in fact wanted by the majority of people, and whether it will indeed be a magic bullet to bring the rural county into the 21st century economy.

After two years of lawsuits and two mediations, Swain and Graham counties have finally agreed on where to draw the county line signifying their portions of the Fontana Dam.

Fontana Dam straddles the two counties. How much of the dam lies in each county determines how much they each get in property tax money from the Tennessee Valley Authority for the dam, its hydropower equipment and generators.

Previously, the two counties split the money 50-50. However, Graham County successfully argued in 2010 that it deserved more of the money since more of the dam lies on its side of the county line. Graham then sued Swain County for taxes going back decades that TVA had paid to Swain but rightfully belonged to Graham, estimated at $15 million. Swain filed a countersuit. Leaders from the two counties used mediation to eventually find a dividing line that suited them both.

Historically, the center of the Little Tennessee River was the boundary line between counties. But the river was covered up by Fontana Lake when the dam was built, and finding that center line now has proved elusive.

In a quest for resolution, surveyors were sent out to take a look at the area and discovered an old monument marking the center of the river on the dam, giving Swain County a watertight argument for where the county split should lie.

“We did not compromise beyond that marker. That marker establishes the exact center,” said Swain County Manager Kevin King.

Unfortunately for Swain County, however, it will recoup some, but not all, the tax money it has lost to Graham. With the new, or rather old, marker as the agreed on dividing line, Swain County will gain back about three-fourths of the funding it lost last year.

Under the disputed formula, Swain County lost more than $200,000 a year from its budget — a devastating blow that might have forced the county to raise taxes or increase fees. King estimated that the county will get back about $150,000 of that.

“We are better now than we were six months ago, but we’re worst now than we were two years ago,” said Commissioner Donnie Dixon.

Commissioners in both counties have signed a joint agreement that they will forward on to the General Assembly for approval. The state legislature’s rubberstamp is a mere formality however since the counties are in agreeance.

“We’re hoping that everything is going to work out and (want to) re-establish the relationship we’ve had with Graham County,” said Commissioner David Monteith. “We need to work together on everything.”

Overall, the county commissioners were happy that an accord was reached and will avoid the county having to either hike taxes or make major budget cuts.

“We were looking at different ways to fill the gaps in the budget,” King said. “We’d have to come up with that revenue somehow.”

Will it decimate mountain beauty or open the economic flood gates?

Either way, the costly missing link of a four-lane highway through the remote southern mountains has hit a startling and potentially insurmountable roadblock. State and federal agencies are reluctant by some accounts — downright unwilling by other accounts — to issue essential environmental permits. Without them, the missing link can't go forward.

So for now, an 18-mile, $800 million highway through Graham County known as Corridor K is at an impasse.

Graham County is the final piece of a four-lane highway stitching together the seven, peak-pocked western counties before surging onward to Tennessee, blazing a pseudo-interstate from Asheville to Chattanooga.

The highway was envisioned nearly 50 years ago. Its purpose: to transform the far corner of Western North Carolina from an Appalachian backwater to economic prosperity.

"It was the same everywhere in Appalachia. It was just twisty two-laners, and it was a long trip to get anywhere," said Bill Gibson, the director of the Southwestern Commission, a governmental planning unit located in Bryson City for the seven western counties.

A lot has changed in the intervening decades, however. For starters, the region isn't exactly a backwater anymore. Also, environmental laws are much stronger, and road building is a lot more expensive.

But, Graham County is still clamoring for its promised piece of four-lane. Indeed, four-lane highways have been delivered to all the western counties except for Graham thanks to a special pot of federal road building money funneled to the region through the Appalachian Regional Commission since it was set up in the 1960s.

"I think to shortchange a small part of Western North Carolina of their opportunities is wrong," said Joel Setzer, head of the N.C. Department of Transportation for the western counties. "We got ours. We should care whether they get theirs."

Graham County's 18-mile missing link of the highway, pegged to cost from $700 to $900 million, is the most rugged, remote and environmentally challenging. The highway would bury streams and wetlands, cut into mountains and require a half-mile long tunnel.

Meanwhile, Graham County leaders blame their 18 percent unemployment rate and high poverty on the lack of a four-lane highway.

Graham County has come to view Corridor K as a silver bullet, the one thing separating it from the advances realized elsewhere in the mountains. If built, the county's unemployment and poverty would darn near solve themselves, leaders claim.

This easy fix to Graham's economic woes has proved anything but however.

"It has been studied to death," said Mike Edwards, the chairman of the Graham County commissioners. "It has been going on for four decades, and it has reached a point now where it is getting more and more difficult to justify building 18 miles of road."

So hard to justify, in fact, that the project has reached a stalemate. There's 10 different agencies, from the Environmental Protection Agency to the N.C. Wildlife Resources Commission, that can make or break the project by refusing to issue essential permits.

A few of these agencies are questioning whether the road is worth it. Given the price tag and environmental damage, will it truly bring the hoped for economic benefits?

"The regulatory agencies seem to be stuck," Gibson said. "They are saying why should we go through all this permitting if we aren't sure that the purpose and need really exists as was forecast? Will this realize economic development and improve lives? Is it true that this road is needed in the way that DOT now has it laid out?"


Misguided goal?

Economic development was once a driving force behind new highways. But, it is mostly touted as a side benefit these days rather than heralded as the sole purpose.

D.J. Gerken with the Southern Environmental Law Center in Asheville said it is rare to see road construction justified with economic development.

But, Setzer pointed out that was the rationale behind the four-lane highways in the seven western counties. From the bypass in Waynesville to the four-lane in Franklin, all were pursued for economic development under the banner of the Appalachian Regional Commission highway program.

"The purpose of the program was to end isolationism in the Appalachian region," Setzer said.

The question now, however, is whether that rationale is still relevant and will it work for Graham.

"It is not going to be the silver bullet they think it is," said Brent Martin, the Sylva-based Southern Appalachian director for The Wilderness Society.

State and federal agencies holding up the new highway have questioned whether there are other solutions to economic challenges in Graham County. They have also questioned whether the goal of ending Appalachian isolation when the highway was envisioned is still relevant today.

"It is doubling down with a half billion investment on an economic development plan from the 1960s rather than asking the question," Gerken said. "If Congressman Heath Shuler said 'I have half a billion to invest in Graham County economic development and just started taking ideas, I suspect you would get a lot better suggestions."

Building an $800 million highway for a county of 9,000 people is particularly problematic when there's no evidence to show it will accomplish economic development.

In a way, the state and federal agencies holding up the permits didn't have a choice, Gerken said.

"It is rare for a project to be so lacking in a clear purpose that the agencies are forced into this position," Gerken said. "The law states clearly that projects like this one cannot be given the required permits if there are practical alternatives that will cause less damage."

Nonetheless, the resistance by agencies to sign off on permits for the highway is unprecedented.

"I was a little surprised, but given the environmental impacts, these agencies are doing their job," Martin said.

Along with the run-of-the-mill road-building complaints that are par for the course in Appalachia — from despoiling historic farmsteads to fragmenting wildlife habitat — Corridor K in Graham County has some particularly sticky environmental challenges. It would mar views from the Appalachian Trail. It would cut through acidic rock with the potential to pollute streams. It would go through terrain that's steep even by mountain standards. And, it would require a half-mile tunnel.

Critics claim these would detract from the natural beauty Graham has to offer.

"I disagree with that, but I certainly understand the point of 'don't destroy what it is you are trying to enhance,'" Setzer said.

As for the tunnel, Setzer sees it as an environmentally sensitive solution. It goes under the Appalachian Trail, avoiding a major highway crossing for hikers. It could also be a possible tourism boon.

"There might be people who come to drive the road just to go through the tunnels," Setzer said.


Tired of waiting

Graham County leaders believe a four-lane highway is what separates them from their more prosperous neighbors — both literally and figuratively.

The county's unemployment rate of 18 percent is the highest in the state. It also has the highest rate of child hunger.

"That is my reasoning for trying to advance corridor K as soon as possible because of how destitute the area is," said Roger Shuler, a retired contractor in Robbinsville.

Graham is not only poor but small, with young people leaving to find work.

"The thing you always gave kids for a graduation gift was a suitcase," said Edwards, the chairman of the county board.

A four-lane highway could change that. It would not only bring business but quicker commutes to everything from shopping to jobs to Western Carolina University.

"When people think economic development, they think factories and four-lanes and tractor trailers. That is very narrow. It is also access to health care and access to education and access to tourism assets," said Ryan Sherby, planning liaison with the Southwestern Commission.

The biggie for many is access to medical care since Graham lacks a hospital.

"We have too many people being flown out of the community on an emergency helicopter at $15,000 a ride," said Edwards, a retired teacher and school administrator.

But with $800 million on the table, Graham County could build a hospital instead of a road. It could solve education woes by building a satellite university campus, Martin said.

"You could bring in an entire team of economists to come up with an economic development plan in Graham County for that much money," Martin said.

Some question whether the county has embraced the economic options at its fingertips now.

"What I would say to Graham County leaders is focus on what you have," said Julie Mayfield, director of WNC Alliance, a regional environmental group. She rattled off the diverse and unique outdoor tourism appeal of Graham County: the scenic Cherohala Skyway, Joyce Kilmer's giant trees, Lake Santeetlah, class V paddling on the Cheoah, Tsali mountain biking and the world-class motorcycle ride known as the Tail of the Dragon.

"We go to vacation in Graham County," said Mayfield, who lives in Asheville. "I am no PR expert, but I am confident I could design a tourism brochure for Graham County that would draw more outdoor recreation tourism."

While Graham County laments its plight as the only county in the state without a four-lane road, it's actually an asset, Mayfield said.

"I would celebrate that. I think there are a lot of people who would go to Graham County because it is a hidden gem," Mayfield said. "There is an audience there to be appealed to."

But, Edwards said the four-lane highway would actually help tourism if Graham County wasn't so hard to get to.

"The easier it is to get here the more likely they will come," Edwards said.

Graham County may be the last county without a four-lane — but it is also the last county that is completely dry. Even the grocery stores in Robbinsville don't sell beer or wine.

When asked whether the lack of alcohol could be a deterrent to young people staying in Graham County or hurting tourism, Edwards didn't deny it.

"It has been said by some, but that is a very volatile issue," Edwards said, adding there are no plans to change it.


Age-old debate

Highway supporters in Graham blame outside environmentalists for holding up progress.

"They want to come and tell us, 'No you cannot build a road because it devastates our landscape,'" said Roger Shuler a Graham County resident.

These outsiders have packed the numerous public hearings on Corridor K over the years, painting a tainted picture of public opinion, said Edwards, chairman of the Graham County commissioners.

"The thing that gets me is there is always an outside influence that wants a say-so on what is going to impact us here locally," said Edwards. "We've been impacted from attorneys of every flavor of organization over the years.

I respect that, but the 9,000 people in my county have to be accounted for in the environmental argument. The people here have a right to life, liberty and the pursuit of happiness."

That doesn't change the reality of environmental court challenges should the road proceed. In fact, the threat of lawsuits was among the concerns cited by resource agencies that are holding up the project as currently designed.

The road known as Corridor K has long been mired in a philosophical debate that on the surface pits outside environmentalists against more conservative locals.

But that would be over-simplifying things. Retirees lean both ways — some eager for quicker access to a hospital and others relishing the rural lifestyle.

Some multi-generation families in Graham are eager for progress the highway will surely bring, but others fear an erosion of their heritage and way of life.

Even the outdoor industry is torn. Getting tractor-trailers out of the paddling-crazed Nantahala Gorge would no doubt please some rafting companies and kayakers, who would no longer have to worry about the barreling freight traffic. But outdoor enthusiasts like the rugged nature of Graham County's prized recreation areas.

These debates are merely academic, however, as long as the state and federal agencies continue to dig in. Many local advocates for the project don't even realize it's in jeopardy, however.

"We think our chances are very good," said Antoinette Burchfield, with the local Corridor K Coalition. "We think it is going to be sooner than everybody realizes."

Birchfield knew nothing of the impasse with federal agencies about permits, asking whether that was the same as the lawsuits being threatened by outside environmental groups.

Birchfield has been going door-to-door to county commissioner and town board meetings in the seven western counties seeking an official endorsement for Corridor K. She has racked up an impressive number of formal resolutions from local government bodies, suggesting a majority of leaders in the region support their brethren in Graham County in its quest for a highway.


Two roads better than one

Ironically, the DOT's strategy to advance the highway has backfired. Instead of building the entire 18-mile missing link at one time, the DOT broke it into two roughly equal segments — one from Stecoah to Robbinsville and one leading on toward Andrews.

Only the first half is up for debate now. The other half — from Robbinsville to Andrews — would be years away.

"We didn't have the finances to go in and build the whole thing at one time because it is an expensive project," Setzer said.

Tackling one segment at a time was also seen as an easier route to dealing with environmental concerns. The drawn-out timeframe for the project meant the DOT had to keep revisiting its environmental assessments — first in the 1980s, again in the 1990s, and again a decade later. Redoing the environmental studies each time was a massive undertaking.

"We decided let's not do a plan that is going to have to be refreshed again. Let's separate it and do it in manageable chunks," Setzer said.

Agencies questioning the highway argue that the costs and environmental impacts should be analyzed in their entirety, not piecemeal.

Regardless, the DOT is now hamstrung by its piecemeal approach. If the DOT wants environmental impacts to be considered in standalone segments, the benefits must also be justified in standalone segments.

But, justifying the economic benefits of half a highway — the single 9-mile segment leading in to Robbinsville — hasn't worked.

"I think it is gong to be very difficult to quantify the economic impacts of building a four-lane road that will dead end in Robbinsville," Martin said.

Setzer agreed on that point. The economic benefits of the highway won't be fully realized unless both segments are built.

And, that begs the question: does building the first segment make the second segment a foregone conclusion?

The second segment is predicted to be even more expensive and environmentally challenging, but state and federal agencies fear they will be pigeonholed into approving it once the first one is already built, preventing a true analysis.

Setzer said tackling the entire missing link as a single project as some of the agencies want to do would essentially mean starting over — and would likely derail the process.

"It builds in certain delays and the longer you delay it the more apt funding will be seized for what somebody else thinks is more important," Setzer said. "We should allow the fragmentation to eventually get to the ultimate goal."


Money on the table

While opponents point to the sizeable price tag, money is not a hang up. The DOT has almost enough to build the first nines miles sitting in the bank, waiting on the green light. It has been saved up thanks to a special pot of federal highway dollars earmarked for the Appalachian region.

The money is burning a hole in the DOT's pocket and driving the project, according to critics.

"They either spend or they don't," Gerken said. "So they are trying to come up with a legitimate purpose for building this road."

The view is shared by at least some of the state and federal agencies.

"There are disagreements among the agencies about whether the project is really needed or is driven by the availability of Appalachian highway funding," states a report last year summarizing concerns of the agencies.

One of the agencies interviewed for the report said the special pot of money "creates a want without a substantiated need."


Preconceived notions

The DOT hit a stumbling block two years ago that in hindsight was a harbinger of more serious roadblocks to come. The Army Corps of Engineers, one of the many agencies that can make or break the project by denying permits, called for a partial do-over of the DOT's environmental analysis.

Several agencies were questioning why the DOT couldn't upgrade the existing two-lane highway through Graham County instead of building an entirely new one. The Army Corp sent DOT back to the drawing board to determine whether upgrades to the existing road would suffice.

They wouldn't, DOT determined.

The DOT countered that simply dressing up the winding two-lane road through Graham County with an extra climbing lane here and there, wider shoulders and gentler curves isn't really fixing the problem.

Cars just won't take a route around the Gorge if it is only marginally better.

"They say it has to be big enough and fast enough to lure traffic away from the Gorge," Gerken said.

Not surprisingly, Gerken doesn't think the DOT did an "adequate analysis" of upgrading existing roads.

"I would characterize it as a half-hearted attempt," Gerken said. "Because this is a project in search of a defensible purpose, DOT shouldn't have eliminated a lighter footprint from consideration. Targeted improvements to the existing roads could be built now without controversy and at a fraction of the cost."

Agencies holding up highway permits have been frustrated that DOT is unwilling to consider anything but a new four-lane highway. Critics say DOT has blinders on to anything except a four-lane highway and are refusing to think creatively about an appropriate road through the mountains.

"There seems to be all kind of options other than building your 'anywhere-in-America' four-lane," Martin agreed.

The existing road could be upgraded not just with climbing lanes, but all sorts of bells and whistles aimed at luring eco-tourists. Picnic areas, overlooks, wildlife viewing pull-offs, hiking trails, fishing access, cultural heritage sign boards could all be built in.

The premise is hard to argue with, no matter how many lanes a new road would have.

"If we do need a new road, let's design it so we can capitalize on the assets we do have," said Ryan Sherby, regional planner for the Southwestern Commissioner. "It would go through some fabulous public lands. Let's provide access to them."

Setzer said the goal is to get traffic now using the Nantahala Gorge to use the new highway instead, and if it isn't any faster, they won't take it. That means the road through the Gorge itself would have to be upgraded.

Even the reluctant state and federal agencies agree that the Nantahala Gorge is congested and unsafe, clogged for six months of the year with rafting buses and an onslaught of cars sporting kayaks on roof racks.

Gibson, director of the Southwestern Commission regional planning agency, has had a front row seat to the Corridor K debate over the decades. Brand new on the job in 1975, he traveled to Raleigh to see design options being considered by the DOT for a four-lane highway through Graham County.

One option was a double-decker highway through the Nantahala Gorge, achieving four lanes by stacking them on top of each other. Another was to divide the highway, with two lanes in one direction on one side of the river and two lanes in the other direction on the other side.

Those obviously fell by the wayside in favor of a new highway through Robbinsville. Yet three decades later, it is still floundering.

"The folks in Graham County are still waiting," Gibson said. "A lot of the people who hoped to see it in their lifetimes are gone now. Others who hoped to see it in their lifetimes are afraid they will be gone."



Will dollars flow down new highway?

Will a four-lane highway bring economic development to Graham County?

While local leaders and the N.C. DOT have a hunch that it will, state and federal environmental agencies aren't convinced and so far have refused to sign off on permits for the environmental damage the highway would cause.

But, there may be a way out of the impasse. A regional economic development plan for the seven western counties will be launched in coming months. It may prove the highway is needed, but likewise, it may not.

"Everything is on the table," said Ryan Sherby, a regional planner with the Southwestern Commission agency based in Sylva. "People need to quit thinking about fighting for a four-lane road. People need to think about what is our economic development vision for our region."

The study may indeed quantify the economic benefits of a four-lane road, and if so, highway supporters will have the justification that state and federal agencies say is lacking.

But, it may also show that there are other economic ideas. The Southwestern Commission will act as project manager, but an outside consultant will be brought in to lead the study. It will take 12 to 24 months and involve dozens of players.

The study will be funded with a piece of Appalachian highway money, but that doesn't mean road-building interests will have an inside track to influence the study's outcome, according to Joel Setzer, head of the N.C. DOT for a 10-county mountain area.

"We aren't trying to stack the cards," Setzer said, pledging that his agency is willing to let the "chips fall where they may."


A way through the impasse

The impasse over a $800 million four-lane highway in Graham County is a rarity in road building.

It is not uncommon for state and federal agencies to express concerns about a project's environmental impacts but rarely do they rise to the level of refusing to sign off on permits.

In hopes of breaking the logjam, a firm that specializes as mediators in environmental disputes was brought in to assess the prospects of a resolution and recommend a course forward.

The U.S. Institute for Environmental Conflict Resolution interviewed 58 stakeholders in early 2011 in hopes of ferreting out the hot button issues that must be solved.

"There are disagreements among the agencies about whether the project is really needed," the mediators concluded in their assessment. "Several agencies expressed the view that the environmental impacts are severe and that the expectations of economic benefits are not sufficiently supported to justify the environmental impacts."

Those interviewed include the Environmental Protection Agency, Army Corps of Engineers, N.C. Division of Water Quality, U.S. Fish and Wildlife, N.C. Wildlife Resources Commission, Appalachian Trail Conservancy, Eastern Band of Cherokee Indians, as well as local leaders, DOT and federal highways.

Here's a sample of concerns expressed by some of the agencies as listed in the mediators' report. The firm points out that not all agencies share the same level of concerns.

• There are many questions about whether the expectations of economic benefits from the road are realistic.

• There are disagreements among the agencies about whether the project is really needed or is driven by the availability of Appalachian highway funding.

• There are different perspectives among the agencies as to whether the recognized environmental impacts are worth the environmental costs, especially given uncertainty about the expectations of economic benefit from the road.

• There is disagreement about the feasibility of and plans for mitigating the environmental impacts, especially related to acidic rock.

• The feasibility, cost and desirability of the tunnel is a concern.

• The project is driven by a 'Build it and they will come' approach.

• Many are not clear about why the option of improving existing routes is not a viable alternative.

• The fact that the "Purpose and Need" was developed in the 1980s raises questions for some about whether it is still applicable and relevant.

Swain County should finally have a budget by early August, nearly six weeks after the start of the new fiscal year.

Commissioners passed an interim budget to keep the county running over the summer, one of only two counties in the state that didn’t pass a full budget by the July 1 deadline.

That, said County Manager Kevin King, was because he was waiting on the state to adjust what the county is due under a new formula for Medicaid reimbursement. The formula was tweaked recently, and the state and county had to work through exactly how much Swain should get.

After the adjustments, which should be in by mid-August, King expects the county to get a few hundred thousand extra dollars.

Because the deficit would be too great to make up out of the county’s savings, King said he was forced either to wait and hope for the Medicaid money or propose county layoffs or a tax hike.

He chose to wait.

With the numbers now in, commissioners this week got their first look at the proposed 2011-12 budget, which will take effect in September.  

If commissioners approve the budget on August 8, the county will have $14.9 million to work with, up $2.5 million from last year’s budget.

The increase is going to two building projects on the county’s to-do list this year: new classrooms at West Elementary School and the construction of the Swain County Business Education and Training Center on Buckner Branch.

The property tax rate will stay the same, despite the additional spending. The school project is being paid for out of a capital reserve fund where savings had been set aside for school construction.

The training center, a joint effort by Southwestern Community College, the Fontana Regional Library, Swain County Schools and the county, is being underwritten by a $1.1 million grant from Duke Energy.

The elementary school upgrade is coming from a capital reserve fund set aside for school improvements suggested by a committee last year.

Otherwise, the budget is nearly identical to last year’s numbers, but the county will have to take a $158,000 dip into its fund balance to come out with a balanced budget.

That, said King, is because the county has suddenly lost around $300,000 in revenue it has counted on for years from the Tennessee Valley Authority.

As a government entity, TVA doesn’t pay property taxes, but does make “payments in lieu of taxes” for Fontana Dam and its generators. A new formula for the payments has drastically reduced what Swain historically got and diverted the money to Graham County instead.

That’s affected their fund balance too. The county was chastised in 2009 by the Local Government Commission for letting the fund balance, essentially the county’s savings account, dip too low. State law mandates that the account be at a minimum of 8 percent of the county’s annual budget, equivalent to one month’s expenses.

“Last year it was at about 13 percent,” said King. “But we’ve had decreases in our TVA [revenue], so it’s somewhere in the neighborhood of about 10 percent.”

He said he’s not yet certain of the exact numbers, since he is expecting some payments to the county’s accounts soon that will change the account’s balance.

The bottom line, though, is that revenues are down. And unless expenditures start dropping with them, the county must keep returning to the prospect of raiding its savings.

Currently, Swain is taking Graham County to court over the lost TVA monies. King said they hope to have their money back within a year. But Graham has filed a suit of its own, so the legal entanglements might not be so easy to sort out.

The proposed budget will be available at the Swain County Administration Building until Aug. 8, when commissioners will host a budget hearing and then vote on the document.

The fight between Swain and Graham counties is growing ever deeper in a dispute marked by lawsuits, counter suits and pleas to the General Assembly over who is entitled to a greater share of payments off the Fontana Dam.

The stakes are high — hundreds of thousands of dollars are on the table — for the two small, rural counties. The row centers over payment in lieu of taxes, or PILT, the money that counties get when federal land holdings erode the property tax base.

Swain and Graham have gotten PILT funds monthly from Tennessee Valley Authority since the Fontana Dam was erected in the early ‘40s.

The formula for calculating how much each county is entitled to was thrown into dispute last year, however. The N.C. Department of Revenue ruled that Graham should get a bigger share since more of the generators were housed on Graham County’s side.

The ruling in Graham’s favor will cost Swain more than $200,000 a year.

But that wasn’t quite enough. Graham also wanted six decades of back payments they felt they were owed — up to $15 million. So in January, they filed suit to get it.

Swain County, of course, disagrees. They’ve filed a countersuit, decrying Graham’s claims on a multitude of different grounds, hoping that one will stick. Too many years have passed, Swain argued, and if Graham wanted the money, well, they should have spoken up sooner.

But they didn’t stop there. Swain County has countersued claiming that if anyone was slighted their fair share from TVA and was entitled to a back payments, it should be Swain.

While the latest state formula for calculating PILT payments is based on TVA’s property holdings in each county, that’s not always been the case.

Until 2009, state law said that each county was supposed to get PILT money based on the percentage of lost tax revenue. Since Swain gave up more land when the lake was created — 16 percent of the county, as opposed to Graham’s 2.5 percent — it lost far more tax revenue, and thus should have been getting a greater share of TVA’s PILT money all those years.

“If the Department of Revenue had properly calculated the percentage of lost tax revenue to each county and distributed the PILT revenue accordingly, Swain County would have received substantially more PILT revenue than Graham County received,” said the countersuit.

 

Swain seeks new formula

Concerned, though, that the counterclaim wasn’t quite enough to solidify their position, Swain County commissioners got together to formulate other tactics.

To add firepower to their arsenal, Swain Commissioners are seeking special legislation from the General Assembly.

Swain wants to change the way PILT payments are calculated. Instead of awarding PILT money based on the value of TVA’s assets — such a which county the generators sit in — it should be based on the value of the land removed from the property tax roles by the lake as a whole.

While Graham’s got more of the hydropower equipment on its side of the county line, Swain has a good deal more land under water than Graham does. Swain stands to benefit substantially.

Swain’s proposed formula for calculating TVA payments is consistent with the PILT formula for national forest service land. Each county gets PILT money based on the acres of land that lie in the national forest and thus have been removed from the tax roles.

Swain also wants the property line between the two counties redrawn. The historical property line was the center of the river channel, but that’s not the boundary currently recognized currently by the state — instead the latest boundary line awards more land to Graham. Swain wants the historical boundary be reinstated, since the more land Swain can claim its lost when the lake was flooded, the more it could get in PILT payments.

 

Chances?

Currently, Swain doesn’t have anyone to sponsor the legislation in either the Senate or House so face, and could be a tough sell.

In the House, Swain is represented by Rep. Phil Haire, D-Sylva. If Haire chose to take up the cause, he could likely face opposition from Rep. Roger West, R-Marble, who represents Graham.

In the Senate, Sen. Jim Davis, R-Franklin, may opt to steer clear, as he represents both counties.

None have yet weighed in, and Swain commissioners were reluctant to address the matter, saying they had a maneuver in the works it was best not to comment on.

Graham officials are similarly tight-lipped, though they declined to speak because the issue is pending litigation.

“We have approached people in the General Assembly, but we haven’t done anything one way or the other,” said Swain Commissioner David Monteith.

For Graham’s part, their attorney Charles Meeker, who is also the mayor of Raleigh, said the county has rejected all of Swain’s claims outright.

“We don’t believe that they are factually accurate,” said Meeker, and that, he said, was that.

The suits are scheduled to come before the Graham County Superior Court in early April, though Swain has applied for a change of venue. There is, as yet, no timeline for if or when the resolutions will see the General Assembly floor.

By the end of this year, nearly every student in the six westernmost counties will have unprecedented access to technology in the classroom.

Thanks to a collaborative project called WNC EdNet, high-speed Internet will become a reality for all public and charter school classrooms in Cherokee, Clay, Graham, Jackson, Macon and Swain Counties, along with the Qualla Boundary.

WNC EdNet recently got the go-ahead to connect The Highlands School — the last remaining school to join the regional network.

As late as 2000, schools in Western North Carolina could only transmit 1.5 megabyte per second. Now, schools with fiber can enjoy 100 megabyte per second connections.

Once these high-speed connections are in place, star pupils from far-flung schools can join together in a virtual classroom to take advanced courses that aren’t normally offered at their own schools. Live video will allow for face-to-face interaction between students and teachers.

“It’s not like an online class,” said David Hubbs, CEO of BalsamWest FiberNET, which implemented the WNC EdNet project. “You’re speaking to or interacting with a teacher in real time.”

Linking up to the state network creates access to The North Carolina Virtual Public High School, which already offers 72 courses including Advanced Placement and world language classes.

The widespread reach of fiber across North Carolina to even the most rural schools holds the promise of creating a level playing field for students, according to Bob Byrd WNC EdNet project manager.

“That’s our big push now, to narrow that digital divide,” said Byrd.

Moreover, fiberoptic technology makes professional training more readily available for teachers. Once colleges are hooked up to the statewide K-12 network, student-teachers at Western Carolina University or other colleges may observe teachers in actual classrooms without interrupting lessons.

Being on the same fiber network also decreases overhead for school systems, which only have to pay one Internet bill for all their schools, Hubbs said.

 

Jumping hurdles

 

The WNC EdNet project has traveled down a long road to get to where it is now.

Nearly 60 schools have been hooked up to their central office in the county via a fiberoptic line, which makes broadband Internet possible and also provides an important backbone for communication between the school district office and individual schools.

A separate project by a nonprofit called MCNC is in turn connecting these school district offices to a statewide fiber network, the North Carolina Research and Education Network. Now, MCNC is also working on linking colleges up to the state network.

WNCEdNet piggybacked onto the larger BalsamWest project, which has installed hundreds of miles of fiber underground to promote economic development in the Western North Carolina.

The mountainous terrain was a major obstacle BalsamWest had to overcome while installing equipment underground.

“The very things that we love about our rural area create challenges for technology,” said Hubbs.

Constructing in the remote area between Cashiers and Highlands was another challenge. BalsamWest had to speak individually to every property owner to get permission to build.

“We had more private easements between Cashiers and Highlands than we did everything else put together, over 300 miles,” said Hubbs. About 15 grant applications had to be submitted to lock down funding for the $6.1 million WNC EdNet project. The project was partly funded by the Golden LEAF Foundation, which chipped in $2.2 million, and the Cherokee Preservation Foundation, which contributed $1.7 million.

Even with 12 different partners — including Southwestern NC Planning & Economic Development Commission, the Western Region Education Service Alliance, seven school districts and three colleges — WNC EdNet was smoothly coordinated.

A similar project in eastern North Carolina had failed due to infighting, according to Leonard Winchester, chairman of the WNC EdNet technology committee.

WNC EdNet coordinators were asked to come to Raleigh and explain how their particular project ended in success. Winchester said cooperation was key.

“We had a group of people that trusted each other,” said Winchester. “That trust, you can’t give to somebody else.”

Swain County is nearing the end of an ongoing saga with neighboring Graham County over who will provide emergency services to Deal’s Gap.

The sparring counties reached a tentative agreement last week pending approval by both boards.

According to the agreement, Swain will reimburse Graham $250 for each time it sends an ambulance to Deal’s Gap, as well as pay any portion of ambulance bills that is uncollectible.

“It is good news. We can still be a friend to Swain County and help them out in that area but in this case we are being fairly compensated,” said Steve Odom, chairman of the Graham County commissioners.

In exchange, Graham will also reimburse Swain for taking care of emergency calls at Graham’s Tsali mountain biking area, which is closer to Swain.

Kevin King, county manager for Swain, called it a fair agreement and said he expects commissioners to approve the plan next week.

Deal’s Gap — an outlying Swain territory that is completely bordered by Graham — receives droves of thrill-seeking motorcyclists headed to the Dragon and Hellbender, world-famous sections of winding roads. But it would take an ambulance 45 minutes to get there from Swain, so Graham has long provided emergency services to the territory.

Graham was being hit in the pocketbook by routinely covering all 911 calls to the area and grew weary of responding to an increasing number of serious wrecks. Each time Graham sends an ambulance out of the county to the remote Deals Gap territory, “We have to call in backup crews to cover our own county,” Odom said.

And patients treated don’t always pay their ambulance bill.

“A lot of times we are left holding the bag,” Odom said.

Odom said Swain was taking advantage of Graham. The county proposed everything from annexing the territory to demanding $80,000 annually from Swain.

But Swain County claimed it was incurring its own expenses transporting Graham patients to area hospitals from the Tsali campground.

After a months-long stalemate on the issue, Graham decided to drop all emergency services to the area in January. Swain leaders retreated from their line in the sand and said for the first time, they would be willing to negotiate.

But according to King, the two decided to cooperate again after a rockslide shut down the Dragon.

“A lot of conversation came out of those few days it was closed,” said King.

While King is unsure on why Graham County backed down from its initial demands, he suspects the county could not find figures to back up their initial request, which he called extravagant.

Before the tentative agreement was reached, Swain’s rescue squad had independently collaborated with the Steacoah rescue squad to come up with an agreement of its own. Stecoah would provide first-responder coverage to the area until Swain could make the long drive to Deal’s Gap.

King said the new arrangement will again solidify the relationship between the two counties.

“We’re all mountain people and trying to reach an agreement,” said King.

Becky Johnson contributed to this article.

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