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Jackson County has been down this road before, but that isn’t stopping leaders from taking another look at forming a local economic development commission.

Or, to be more precise, reconstituting the county’s current Economic Development Commission.

“Because technically, there is an EDC in Jackson County,” County Manager Chuck Wooten said.

The county’s current EDC exists in name only, however. It has an office but no director. By-laws but no members. A mission statement but no budget.

The former EDC, which functioned as an independent entity outside county oversight, went defunct in 2005 amid controversy and allegations of financial mismanagement. Three years later, county commissioners formed a new EDC, this time under county control although representatives of each town had seats at the table.

The new attempt fell apart after less than a year, however. The director resigned. The board quit meeting. Members resigned one by one, and neither the county nor towns appointed replacements to fill their seats.

While the EDC technically exists on paper and could be restarted at any time by simply making fresh appointments to the board, Wooten believes that the county’s phantom EDC should probably be dissolved because of what he termed “bad connotations for people.” But, something needs to take its place to spur economic development in Jackson, the county manager said.

A joint meeting of county and town leaders is set for March 5 to discuss the topic. Sylva town board member Harold Hensley, for one, is happy that the county is initiating work again on the economic front.

“I know there’s been a lot of controversy about the EDC,” Hensley said. “But, I think that it could be a good thing if it is run right.”

Hensley emphasized that he’s uncertain in his own mind whether the same EDC structure used previously in Jackson County should be tried again, however.

Dillsboro Mayor Mike Fitzgerald also said he’s pleased county leaders are moving toward formal economic development efforts. But, like Hensley, he was unsure about the form he’d want to see such an effort take.

“But, it needs to be investigated,” Fitzgerald said.


Rough history for EDC

When it comes to EDC boards, Jackson County’s version is extremely unusual among counties in Western North Carolina. While most EDC’s are county-led entities, Jackson County has included town leaders in economic efforts with their own seats on the board. Wooten said he still believes that “you do need to have the municipalities at the table.”

When the EDC was thrust into turmoil in 2005 amid allegations of financial mismanagement and a lack of oversight, town representatives remained at the table even though the county pulled out. It limped along until the county opted to become re-involved.

When the board was reconstituted with a new set of bylaws, a power struggle played out between the county and the towns over who would hold the most authority. Even though the amounts of money being contributed by the county and town to the “joint” effort were disproportionate.

Jackson County kicked in $105,000 for economic development efforts. Each town put in just $1 for each resident, amounting to a few hundred for Dillsboro, Webster and Forest Hills, and $2,500 for Sylva.

The county’s new EDC director, Dorothea Megow-Dowling, resigned after less than a year, calling the entity dysfunctional. She said the county missed an opportunity by agreeing to reconstitute the board under the same structure rather than dissolving the EDC and creating a new one from scratch.

In response, the then-mayors of Sylva and Dillsboro accused the county of stripping the EDC board of its power and relegating it to a mere advisory role. Additionally, EDC ghosts from the not-so-distant past continued to haunt this newest reconstitution.

A watchdog group called Jackson County Citizens Action Group dogged the county and the members of the EDC, accusing them of financial cover-ups and a lack of diligence in safeguarding public funds.

It remains to be seen what exactly Jackson County and the four towns will do this time around.

It will be several more weeks at best before Sylva AM radio station WRGC gets back on the air, pending approval from the Federal Communications Commission to grant the station a license.

Word that the station would resume broadcasting around Valentine’s Day were rumors, said Roy Burnette, who is trying to revive the radio station. In addition to securing the license, Burnette is waiting on a final piece of funding in the form of a Jackson County economic development loan.

WRGC went dead last August, a victim of dwindling advertising dollars in a hard-knock economy. WRGC was owned by Georgia-Carolina Radiocasting Co., which currently operates radio stations in Franklin.

Burnette wants to buy the station and expand its reach from east of Canton in Haywood County to Topton in Swain County, which in theory also would expand advertising-revenue possibilities and make the station financially feasible.

Burnette, CEO of the new 540 Broadcasting Co., asked county leaders for a $289,000 loan to make his dreams come true. Jackson County commissioners have approved $179,000 of the loan outright and are poised to extend the remainder — if the county can figure out reasonable collateral to cover the loan if the radio station owner defaults. Efforts to protect the county by joining Burnette as a co-license holder on his FCC permit were rejected by the federal agency.

Of the total $289,000 loan, Burnette wanted $250,000 to purchase the actual radio license from Georgia-Carolina Radiocasting Co. Some $39,000 was designated for acquiring the equipment needed to install the 5,000-watt station. Burnette would provide $100,000 in his own dollars for working capital.

The county has agreed that payments on the loan would be deferred until May 2012 and then be paid during the next 10 years in 40 quarterly payments at an interest rate of 2 percent.

County Manager Chuck Wooten said that Jackson leaders “are still having to work through” possible collateral and that Burnette might be asked to pledge personal assets.

“He seems amenable,” Wooten said.

For his part, Burnette said he’s simply “waiting on the FCC to grant the license for a transfer.” That will also allow him on moving forward with building a new transmitter.

“Everything will be top quality — the signal and service,” Burnette said.

An audit of REACH of Jackson County’s finances received by the nonprofit’s board last month show the money situation had become even more dicey than was previously made public.

The agency, which worked with victims of domestic violence and sexual assault, shut down last week amid accusations of internal financial irregularities. Jackson County women and children seeking help from abusive situations are now reliant on other counties’ agencies to provide services and emergency shelter.

What primarily triggered the sudden closure was the nonpayment of payroll taxes for three quarters in 2011 to the Internal Revenue Services. The board last week fired the agency’s executive director and finance officer. The seven remaining employees were laid-off.

The audit, reviewed this week by The Smoky Mountain News, reportedly played a huge role in the board’s decision to pull the plug on the 33-year organization. Here were some of the findings of the financial review, which was dated Dec. 28 and prepared by the Waynesville firm of Gahagan, Black and Associates:

• The organization lost $128,216 in net assets for fiscal year 2010-2011.

• At the time of the financial review, REACH’s assets totaled just $58,104, but the agency had current liabilities of $200,863. That included long-term debt totaling $100,789 and unpaid payroll taxes of $76,752 (that number continued to climb, totaling about $81,000, including penalties, by the time the agency closed).

• The situation was so dire the amount of assets held by REACH couldn’t even cover its temporarily restricted obligations of $10,295. These are funds restricted in use, with dollars required to be spent in a certain timeframe or be spent for specific purposes only.

“These conditions make it uncertain as to whether the organization will be able to continue as a growing concern,” the auditors noted.


End was quick following audit release

In an interview last week, fired REACH Executive Director Kim Roberts-Fer said she waited to tell the board about the payroll tax issue until receiving the results of this audit. Roberts-Fer indicated she’d learned about the IRS problem in October. She said that she’d been in contact with the federal agency to try to work out a payment plan.

Roberts-Fer said her delay in relaying what was happening to the nonprofit’s overseeing board was justified because she wanted to give board members a complete picture of the situation, one that included solutions. Roberts-Fer said she had successfully worked out a compromise with the IRS that would have enable REACH to continue serving the community.

REACH’s board still hasn’t made any public comment except for the release of a small, prepared statement last week expressing their regrets over closing the agency.

But the auditor’s findings, coupled with the sudden appearance of an IRS agent who demanded personal financial information from board members, clearly influenced the decision to finally end the protracted death writhing of the virtually financially insolvent group.

According to Roberts-Fer, fired Finance Director Janice Mason was working within a financial system long in place at the agency. Mason has declined to comment through her former boss.

The auditor noted the following “client response” to the issue of the nonpayment of IRS payroll taxes: “The client was unaware of how to classify expenses through the accounts payable function and wrote the checks to classify expenses.”


A crisis agency in crisis

REACH’s financial practices encompassed monkeying around with paying various bills because of an ongoing funding crisis that had threatened the agency’s survival for two years. The agency put off paying payroll taxes in hopes of catching up but instead fell more and more behind.

The root of the problem started before then, however. REACH in 2001 opened a $1.1-million transitional-housing complex for victims trying to escape abuse. It was a questionable financial venture from the get-go: The nine-apartment village could not actually generate the funds to pay the loans, much less keep pace with general repairs and upkeep. The loan amount owed was $840,074.

The REACH village went into foreclosure. Recently control of that housing complex shifted to Mountain Projects, a nonprofit that administers programs to benefit the needy and elderly in Haywood and Jackson counties.

The IRS put a lien on the property in early February because of REACH’s nonpayment of taxes. That almost boogered up last week’s scheduled transfer to Mountain Projects. But, the U.S. Department of Agriculture (which was one of the original loan makers to REACH) persuaded the IRS to knock the $81,000 down to $51,000. REACH has agreed to be responsible for that debt if Mountain Projects would go through with taking over the property title.

Additional questions surfaced this week about whether REACH would even have been able to apply for and receive federal and state grants anymore since the agency both defaulted on a government loan and failed to pay the IRS. An estimated 90 percent of the nonprofit’s funding base was dependent on grant money.


Macon bailing out Jackson

In the short term, which could mean at least a couple of years, REACH of Macon County will provide services in Jackson County, including key legal services for domestic violence victims. The agency has been given a temporary office and phone at Jackson County’s social services department.

“It has seemed fairly seamless at this point,” said Ann VanHarlingen, executive director of REACH of Macon County. “We realize that Jackson County and the people of Jackson County will devise a system by which they will take this project back over; we also realize this is a process, not an event.”

REACH of Macon County expects to move into more permanent office space in Sylva March 1. That nonprofit will provide three staff members to Jackson County to ensure a continuation of services, said Andrea Anderson, director of client services for REACH of Macon County.

“The debt of gratitude the people of Jackson County owes REACH of Macon County is quite large right now,” Jack Debnam, chairman of the Jackson County Board of Commissioners, told VanHarlingen and Anderson during Monday’s commission meeting.

For now, victims fleeing abusive homes will be housed in emergency shelters in Haywood, Macon or Swain counties. That could change, however. Bob Cochran, director of the Jackson County Department of Social Services, said Mountain Projects via Patsy Dowling has offered Jackson the free use of the old emergency shelter in the former REACH Village.

VanHarlingen told Jackson County commissioners that it requires 18 to 24 months to fully setup a nonprofit agency to serve victims of domestic violence and sexual assault.

Cochran said in an interview with The Smoky Mountain News that “the dust needs to settle” before the community can chart its best course of action.

“It is still early in determining the status and the final outcome of the current REACH,” Cochran said. “We hope there will be some assets left that can be used toward a rebuilding process.”

Given the audit findings, that scenario seems increasingly unlikely.

In addition to not paying the IRS, REACH failed to pay several months rent for the space housing its thrift store. A lien seeking payment on back rent has been filed with the Jackson County Clerk of Court, and there is the possibility of more creditors seeking payment. Also, some of the employees of REACH are owed back pay.

Asked if Jackson County wouldn’t be better served by simply eliminating REACH and starting anew with a different name and no baggage, Cochran responded that he couldn’t answer that question yet.

“I don’t know. I think that conversation has yet to take place,” he said.

A $10 million line of County credit intended to bridge short-term cash flow problems at MedWest-Haywood hospital has hit a snag.

A loan taken out by the hospital offers up the hospital building as collateral but legally it needs approval from county commissioners to do so.

The MedWest board failed to seek necessary approval from the county before taking out the loan, however. The hospital had already signed on the dotted line and promptly begun spending some of the loan money before the oversight was realized, prompting the hospital to seek the county’s retroactive blessing.

But, county commissioners apparently have not been willing to rubber stamp the loan. The hospital came to the commissioners six weeks ago for their approval on using the hospital building as collateral.

Since then, county commissioners have held three private meetings, which were closed to the public, citing attorney-client privilege, to discuss the loan conundrum.

Formerly known as Haywood Regional Medical Center, the hospital has a clause in its deed that prevents any transfer of the property without county approval. In the unlikely case the hospital defaults on the loan, the lender could not in fact take the building, making the current loan documents partially invalid unless the commissioners give their blessing.

Commissioner Chairman Mark Swanger said commissioners are working with the hospital to come to a suitable arrangement that helps the hospital move forward but still safeguards the building in the event of a default.

“We generally have two goals,” Swanger said. “One is that there be a viable thriving hospital in Haywood County and the second is to protect the county’s interest in the property.”

Meanwhile, the Jackson County medical community has expressed dissatisfaction that their hospital in Sylva, which is part of the MedWest system, ended up on the list of collateral for the loan.

A shorter list, in fact, might be what didn’t get listed as collateral. In all, the loan documents list enough collateral to pay the $10 million many times over. Accounts receivables are at the top of the collateral list — essentially every payment coming into the hospital could be garnished to cover the loan, which in itself would be more than enough to cover the debt. Collateral also includes all the medical equipment in the hospital, as well as the MedWest Health and Fitness Center.

The actual hospital itself, along with the MedWest-Harris and MedWest-Swain hospitals, are far down the list.

So why even list them as collateral? It’s the nature of financing these days, with skittish lenders requiring everything but the kitchen sink, and in some cases even that, to secure a loan, according to Mike Poore, CEO of MedWest-Haywood.

MedWest-Haywood has spent $4 million of its $10 million loan so far. The hospital has no other debt. And that’s why Poore is confident the debate over whether the building is included as collateral is a largely a moot point.

“There are several dominoes,” Poore said, listing all the collateral that would be tapped first in the event of a default before the hospital itself would ever become an issue.

Even then, the loan would merely take the form of a lien against the hospital, as the hospital is worth far more than the $10 million loan.

Indeed, the debate over whether the hospital should have been used as collateral on the loan seems to be playing out more on a matter of principle.

“If we thought there was much chance of default we wouldn’t be doing this. We felt we would be in and out of this moment,” said John Young, vice president for Carolinas HealthCare’s western region.

In an unusual financing arrangement, Carolinas HealthCare System has agreed to act as a bank and put up the money from its own reserves for the loan to MedWest-Haywood. MedWest-Haywood is under a 15-year management contract with Carolinas HealthCare, a network of 32 hospitals under the flagship hospital of Carolinas Medical in Charlotte.

Despite the large number of hospitals under the wing of Carolina’s management, it has never stepped in to provide financial help for an affiliate hospital.

“It has never been done before,” said Young. “I don’t know we will ever do it again, but at the time, it was the right thing to do.”

Young said Carolinas made an exception given the circumstances. For starters, the Haywood hospital desperately needed the money to bridge a short-term cash flow crisis brought on by a perfect storm of financial hits.

MedWest-Haywood had to spend $1 million to replace a broken generator, $1.6 million on a wrongful firing lawsuit by group of emergency doctors and $8 million on a new computer system to handle electronic medical records.

The hospital will actually be paid back for part of the cost of electronic medical records system by the federal government in coming years, Poore said.

“These are what you would consider one-time expenses. We knew we would have to get some kind of financing to help us through,” Poore said.

The hospital also spent an undisclosed sum buying up private doctors’ practices during the past year. It didn’t have the budget to do so, but the practices were being courted by Mission Hospital in Asheville. MedWest-Haywood feared long-term repercussions of a patient drain if it didn’t make a competing offer.

While the hospital was in the black last year, its margin was so slim — around 1 percent — it didn’t have the cash flow to cover the unexpected one-time costs.

“It is not a symptom of the engine being dysfunctional in any way,” Young said. “We realized this liquidity issue would go away, so we decided to lend them the money to get through this moment.”


Smoothing out the wrinkles

Meanwhile, the newly formed MedWest allegiance — a merger of sorts of the hospitals in Haywood, Jackson and Swain under an umbrella organization — need help finding its footing.

“Coming together under MedWest was trying to happen in a very difficult time under a very difficult set of circumstances,” Young said, offering further explanation of why Carolinas stepped up to the plate financially.

The recession was taking its toll on hospitals everywhere, particularly smaller, rural hospitals. And here, the hospitals in Haywood and Jackson were facing tougher competition than ever from Mission Hospital in Asheville.

Meanwhile, the relationship with the Jackson County medical community toward MedWest was strained. A large number of doctors in Jackson County had come forward to express concerns about how their hospital was faring under the new MedWest entity.

Carolinas has been asked for help many times by cash-strapped hospitals operating on razor-thin margins. It’s a frequently asked question by smaller hospitals when weighing whether to join Carolinas’ umbrella.

“One of the things that usually comes up is would you be willing to put capital in. Our answer is always ‘no,’” Young said. “That is not our model. Our business model is to help local hospitals find economies of scale and have the expertise to be successful in a very difficult marketplace. It is hard to do it alone.”

Poore said the financial problem faced by MedWest-Haywood is partly inherited. The hospital couldn’t get a traditional loan from a lender.

The once deep-reserves of MedWest-Haywood were spent up during a faltering time four years ago when the hospital failed federal inspection, largely on technicalities, but the resulting decertification by Medicare, Medicaid and several major insurance carriers forced the hospital to essentially shut its doors for five months. Its reserves were depleted as a result.

“I wish it could have happened a different way,” Poore said of the need for the loan from Carolinas. “I wish we had all the credit in the world and everyone was knocking down our doors to give us credit.”

Poore sees the loan more like a line of credit, a very common financial tool used by corporations both large and small.

“The line of credit is helping us pay for a lot of one time expenditures we’ve incurred this year,” Poore said.

Poore said it wasn’t altogether clear initially whether they actually needed county commissioners to sign on the dotted line.

“At one point, we had 11 attorneys on the phone trying to put this deal together,” Young said. “It is unusual for one hospital to loan another hospital money.”

Poore pointed to the proactive steps MedWest-Haywood has taken during the past two years that will start paying off. It has employed doctors practices, has an outpatient surgery center under construction on its campus, has a new urgent care slated to open in Canton in the spring, and has recruited several new doctors, including a new urologist, cardiologist and neurologist just recently.

These days, it is all about fighting for market share against Mission, and that’s what Poore has been positioning Haywood to do.

“There is a demand, and if we can meet that demand, we can keep those patients here,” Poore said.

News that Jackson County Commissioner Joe Cowan won’t run for re-election this year has set the stage for a high-profile Democratic primary showdown between two well-known Democrats, Vicki Greene and former board Chairman Stacy Buchanan.

Greene had let her intentions be clearly known months ago that she would pursue the seat. Buchanan was something of a surprise, however, when he showed up at the county election office Monday — at the same time as Greene no less — to file for the race on the opening day of candidate registration.

Complicating the race is a bid by local builder Cliff Gregg, who Monday started the petition process necessary for unaffiliated candidates in North Carolina.

To run in November, Gregg must get the signatures of 4 percent of Jackson County voters, or roughly 1,400 names.

A second Jackson commissioner’s seat is up for election this year as well, the seat held by Democrat Mark Jones, who is expected to seek re-election.

So far, no Republicans have stepped up to run for either of the two commission seats.

GOP Chair Ralph Slaughter said Monday that he is hunting for members of his party to challenge for both seats. Candidate registration began this week and runs through the end of the month.

“I’ve talked to two or three people, but I’ve not had anyone agree to file. Talking and filing are two separate things,” Slaughter said, adding that he believes there might — emphasis on might — be a GOP candidate to vie for Cowan’s seat.

He was even less optimistic about finding anyone in the GOP to challenge Jones.

“Everyone has encouraged me to run, but I’m too old,” the 72-year-old Cashiers resident said.

The absence of Republicans is somewhat surprising given their success in the 2010 election. Following 16 years of Democratic domination, Republicans Doug Cody and Charles Elders successfully won election. Chairman Jack Debnam, an unaffiliated candidate who received GOP backing and advertising support, also won against a Democrat incumbent.

Jones first ran and won election in 2006. Jones, a Democrat, defeated challenger Nathan Moss in the Democratic primary. He then beat Republican challenger Geoff Higginbotham to win his seat.

Greene, though new to active political campaigning, has been a visible figure in Jackson County and the region for years through her work as assistant director of the Southwestern Commission overseeing government initiatives in the six western counties, a position she recently retired from. Greene cited her nearly four decades of work with various local, state and federal agencies, saying she believed that her extensive experience would serve the county well.

Buchanan would like to pick back up where he left off six years ago.

“I wanted to be able to finish a lot of things that we started,” Buchanan said in explanation, such as helping work on infrastructure that would attract new businesses to Jackson County.

Buchanan resigned in the middle of a term in March 2005 after six years on the board of commissioners. Buchanan, at the time, cited his acceptance of a position as assistant head football coach and co-offensive coordinator at Smoky Mountain High School, and an inability to split time between his school and public service career. Buchanan now works for America’s Home Place, a turnkey homebuilding company.

Buchanan said he believes the county, through local and higher educational efforts, has prepared a great workforce but now more jobs must be created. He pointed to small startup companies that would support the work of larger companies based in nearby cities such as Greenville, S.C., and Spartanburg, S.C.

He emphasized on Monday that he believes Democrats on the board can work with Republicans. When Buchanan was a commissioner, Democrats ruled. That all changed in the last election when an Independent, Jack Debnam, won the chairman’s position and two Republicans took seats.

“I don’t see that there would be any problem working together,” Buchanan said of the conservative board members now in office. “I think we all have the best interests of Jackson County at heart.”

Like her rival, Greene pinpointed economic development as the primary issue in the race for commissioner, indicating water needs in the Cashiers area would be one area she’d want to work on improving. Other job creation efforts are also needed, she said.

Greene said that she does support current commissioners’ recent decision to hire outside consultants to help develop an economic plan.

There has been a resurgence of interest in Jackson County to reconvene an economic development board.

Interestingly, Buchanan was board chairman when a brouhaha erupted that ultimately resulted the county’s economic development commission being dissolved, partly due to lack of results. Just weeks before resigning, Buchanan called for a “restructuring” of that board, which had run afoul of commissioners amid questions about $1.2 million in unpaid loans and generally questionable lending practices.

Pity the poor visitors trying to find their ways to Cherokee if the N.C. Department of Transportation heeds requests of local leaders in Haywood and Jackson counties when it comes to directional signs.

First, Jackson County wanted a “This way Cherokee” sign added in Haywood County that would bring visitors past their own doorstep en route to Cherokee rather than through Maggie Valley via U.S. 19.

More recently, in what smacks of tongue-in-cheek retaliation — though Maggie Valley officials might be perfectly serious, given that small town’s current economic woes — Haywood County sent an official request that the DOT install a sign along U.S. 441 in Dillsboro that would helpfully inform travelers from the Atlanta area they can actually reach Cherokee by coming back through Waynesville and Maggie Valley.

Amusing, perhaps, but here’s the time-travel differences for motorists: Dillsboro to Cherokee via U.S. 441 is 14 miles and takes fewer than 20 minutes. Dillsboro to Cherokee via Waynesville and Maggie Valley is 45 miles and takes about an hour.

Possible? Yes. Circuitous? Definitely.

“That’s crazy,” said John Marsh of Decatur, Ga., after listening to a CliffsNotes version of the now three-month old sign squabble. Marsh was in Dillsboro this past weekend with a friend on one of his frequent visits to this area.

“That probably seems funny to everybody to talk about, but it isn’t if you don’t know this area and how to get around. It’s confusing,” he said.

Theresa Brady, visiting the area for the first time from her home in northern Virginia, said she relies on GPS information and highway directional signs to guide her travels.

Brady was at the Huddle House in Dillsboro with friends. They’d stopped to eat on their way to Harrah’s Cherokee Casino.

“I don’t know what all that’s about, but it doesn’t make sense,” she said. “Signs should tell you the safest and fastest” route.

Her traveling companion, Jane Langley, agreed, saying she’d found navigating Western North Carolina difficult enough without the potential added burden of directional sign games.

“It sounds ridiculous,” Langley said.


Dillsboro reacts  

Shop owners in Dillsboro seem sympathetic toward Maggie Valley’s economic struggle to survive following the latest round of death convulsions by the theme park Ghost Town in the Sky. Dillsboro experienced something similar when Great Smoky Mountain Railroad in 2008 moved its headquarters to Bryson City and cut train routes to the small town.

Interestingly or ironically or both, railroad owner Al Harper was heavily invested in the most recent failed attempt to revive Ghost Town. One could even say Harper broke the hearts of two small WNC towns.

Be that as it may, however, the Dillsboro shop owners didn’t particularly care for the potential confusion visitors to the region would experience if the DOT pandered to Haywood County and Maggie Valley’s for an alternative sign leading Cherokee travelers the long-way around.

“The whole thing sounds pretty silly,” said Travis Berning, a potter and co-owner of Tree House Pottery on Front Street in Dillsboro. “That’s kind of a long way around to go through Haywood — (the sign) needs to show the most direct route.”

That, however, is exactly the contention of Maggie Valley leaders when it comes to Jackson County’s request for a second sign on their turf. In Haywood, the route to Cherokee through Maggie is shorter than the one through Jackson County, prompting Maggie to rebuke Jackson’s sign request there.

But, Renae Spears, a Bryson City resident who has the Kitchen Shop on the main drag in Dillsboro, pointed out that the road to Cherokee through Maggie is curvy and narrow.

“Obviously, from Dillsboro to Cherokee it is four lanes, which is the quickest and safest way to get there,” Spears said. “And if I direct anyone to Cherokee, that’s exactly the way I send them.”

And while she was on the subject of which way to Cherokee, Spears added that when headed west from Asheville she prefers to use four-lane highway if going to the reservation. Not, she said, U.S. 19’s mainly two-lane route via Maggie Valley to Cherokee.

“It’s not as safe or direct,” Spears said in explanation.  

This raging sign dispute started simply enough, when Jackson County governmental and tourism leader were reviewing state data and discovered the county’s visitation numbers were below par when compared with neighboring communities. That led to a flurry of activity intended to pump up those visitation stats.

Not surprisingly, Jackson County decided it needed a cut of the 3.5 million visitors who make their way to Harrah’s Cherokee Casino each year. The tribe supports Jackson County’s request.

Jackson County Manager Chuck Wooten said last week he was astounded that what seemed such a simple request had snowballed into a multi-town, multi-county, even regional dispute.

“I had no idea it would cause such a stir,” Wooten said.

Wooten added he’d recently told Waynesville Mayor Gavin Brown that if he had known about the ensuing uproar to come, he’d never have written to Waynesville Manager Lee Galloway asking for the town’s backing on a new directional sign. Wooten did not say, however, that the county would have backed one iota away from making the request directly to DOT.

A group tasked with helping Jackson County leaders decide whether to merge two separate tourism entities or possibly hike the room tax is dominated by people who work in the lodging industry.

Four out of the six members currently appointed to study the controversial issues are from within the lodging industry.

“We’ll be asking them for their opinions,” County Commission Chairman Jack Debnam responded when questioned on what, exactly, commissioners hope to gain from forming the subcommittee.

Merrily Teasley, owner of the Balsam Mountain Inn and one of the subcommittee members, noted that the group hasn’t met yet and so she wasn’t prepared to discuss specific issues. The lodging owner did emphasize, however, that she believes “tourism dollars are very important to Jackson County” in general.

The 3 percent room tax raised $440,000 in Jackson County in 2010. That money underwrites county tourism promotions. Tourism marketing efforts funded by the room tax are intended to bolster the entire tourism sector of the county, not just increase lodging.

John Bubacz, owner of Signature Brew Coffee Co. in Sylva and a member of the town’s Downtown Sylva Association, said there’s no doubt that most tourism dollars enter the county via hotels and motels. Still, excluding other business interests from such an important-to-everyone economic topic isn’t a good idea, he said.

“The opportunity for other voices” should have been entertained when forming a tourism subcommittee group, Bubacz said.

“I just think other industries should have the chance to be represented,” he said.


A tangled web of like interests

Two of the six committee members both work at the High Hampton Inn in Cashiers. One is Commissioner Mark Jones, and the other is his boss at the inn, Clifford Meads. Jones defended the makeup and membership of the tourism subcommittee, saying one “might just be surprised” by the objectivity of the lodging industry to, for instance, recommend if needed a higher room tax than is now levied.

The room tax is paid by tourists, not by the lodging entities themselves, but lodging entities have come out against an increase fearing it would deter tourists from staying in Jackson.

Asked about the criteria for picking committee members, Jones cited geographic location (an attempt to have all parts of the county represented) and marketing and promotion skills and experience.

Jones, in addition to working in the lodging industry, is chairman of Cashiers Travel and Tourism Association. As a result, Jones has found himself wearing two hats as the tourism debate has played out.

At county commissioner meetings, Jones would literally get up and leave his commissioners’ seat to address his colleagues at a central podium wearing his other hat as Cashiers’ tourism leader. Specifically, Jones has defended Cashiers amid discussions of whether a single tourism entity would serve the county better than two separate ones.

Not surprisingly, the Cashiers Travel and Tourism Association has vigorously resisted the idea of merging with the Jackson County Travel and Tourism Association. Cashiers’ tourism agency traditionally has isolated itself from larger tourism efforts in the county. That could change with the recent retirement of longtime director Sue Bumgarner, who drew criticism for not sharing marketing strategy or advertising campaigns.

Cashiers representatives sit on the board of the Jackson Travel and Tourism Association. No one from greater Jackson County, however, sits on the Cashiers board.


One county, one tourism board?

Debnam and County Manager Chuck Wooten have advocated for a single tourism entity, with both men saying that would allow for the development of a countywide strategic advertising plan and eliminate duplication of certain overhead.

Wooten said late last week that he plans on recommending the subcommittee designation take place with a little more formality and discussion than was the case during commissioners’ Feb. 6 meeting. Jones simply announced the people he had selected and did not identify them or their affiliations until queried by the news media following the meeting.

Wooten said he would suggest the matter be listed as an agenda item for the upcoming Feb. 20 commission board meeting.


Who’s been appointed?

A taskforce appointed by Jackson County commissioners are expected to examine whether county tourism efforts should be merged and possible look at a room-tax increase.

This new tourism subcommittee is made up of commissioners Jack Debnam and Mark Jones, plus Merrily Teasley, Balsam Mountain Inn; Clifford Meads, general manager of High Hampton Inn; Vic Patel, Best Western River Escape Inn And Suites; and Robert Jumper, tourism manager for Cherokee Travel and Promotion and chair of the Jackson County Travel and Tourism Authority. One more, as yet publicly unnamed member, will be asked to join, too, county officials said.

A domestic violence and sexual assault agency serving victims of abuse in Jackson County abruptly shut its doors last week after more than three decades in operation.

REACH of Jackson County has been plagued for two years by an on-going funding crisis, but the sudden closure came amid questions about internal accounting irregularities.

The director and finance director were fired and seven other employees put on furlough.

This leaves victims of domestic violence and sexual assault in Jackson County without a local agency to turn to. They now must rely on help from neighboring counties. 911 calls from victims are being rerouted to Macon County.

“No client will go unserved — none,” said Ann VanHarlingen, executive director of REACH of Macon County. “We are providing room in the shelter, court advocacy, whatever an individual or family from Jackson County needs, we will provide.”

The domestic violence agencies from neighboring Swain and Haywood counties have pledged help as well, including Swain/Qualla SAFE and REACH of Haywood County.

Lisa Barker, the director of SAFE in Swain County, cautioned, however, that Jackson County’s leaders must figure out some other means, long-term, of helping victims living in the community — these small nonprofits all have limited resources and shallow purses, the very crux of the problem that ultimately destroyed REACH of Jackson County.

“It is very important that each county have the services available in that county,” Barker said. She noted that it places additional hardships on victims, who are already in crisis, if they are forced to seek assistance instead of finding help readily available within their home communities.

Children are often caught in the middle of domestic violence. Four-dozen children were among those housed in 2010 in the domestic violence shelter run by REACH of Jackson County.


Shutdown came rapidly

Board members of REACH of Jackson County aren’t saying much. In fact, all they’ll say about the matter is contained in a written statement released early Monday by board Treasurer Tommy Dennison.

“Due to uncertainty regarding our financial issues, REACH of Jackson County had to close on Feb. 9,” it stated in part. “We are very saddened that this has occurred but it was the only way we could fully understand the situation. This was a very difficult decision for the board to make.”

The budget for REACH this fiscal year was approximately $400,000, down from $1 million just two years ago. Grants made up most of the budget, but the agency had other sources of revenue, too. Jackson County has been giving REACH $35,000 for operational expenses on an annual basis since 2007.

County Manager Chuck Wooten said he was informed that an auditor is reviewing REACH’s accounting records, and that board members had expressed confusion over the true situation of the agency’s finances.

Here’s what happened: On the morning of Thursday, Feb. 9, there was a REACH board meeting. Later, REACH Board President Rich Peoples came to the agency’s offices just off N.C. 107 and fired REACH Executive Director Kim Roberts-Fer and Finance Director Janice Mason. He furloughed the other employees.

In an extensive interview just after she was fired, Roberts-Fer detailed the events leading up to the terminations. While the agency has been through financial struggles, she said there were adequate funds to keep it running. At the time of the interview, it was not yet clear that the REACH board would totally shutdown the agency.

“I don’t see why, after all we have done, that they would give up now,” Roberts-Fer said. “With or without me, that’s not the point — there are too many women depending on them.”


Payroll tax problems

REACH eked out a day-to-day existence. The agency had no piggy bank, and no real bank that was willing to extend credit — REACH was turned down twice when it sought loans. The agency missed payroll at least twice and had its water cut off once for nonpayment of bills.

The financial straw breaking the camel’s back, however, seems to have come when board members learned that REACH owed $47,000 to the Internal Revenue Service. REACH had failed to pay three quarters worth of payroll taxes last year. The amount owed included fines and penalties as well.

Roberts-Fer said there was nothing sinister involved. Partly, the finance director, Janice Mason, didn’t realize she was supposed to remit payroll taxes regularly, according to Roberts-Fer. But, cash flow problems clearly played a major role.

“Her only goal was to keep the agency going. What she was doing was paying when she got the money. But, it kept getting further and further behind, and basically, she didn’t have the money,” Roberts-Fer said.

The IRS showed up. A deal was worked out. REACH would pay $700 to $1,000 a month, Roberts-Fer said, with the expectation that the fines and penalties probably would be waived once the taxes were paid.

“Once I got the information, I shared … with the board and let them know we were in contact with the IRS,” Roberts-Fer said, adding that she went without her own paychecks in November and December to try and help the agency recover financially.

This wasn’t the first accounting issue at REACH.

Mason also failed to properly deposit retirement plan contributions into two employees’ accounts on several occasions, Roberts-Fer said. When employees elect to have part of their take-home pay withheld and put into a retirement plan, the money is supposed to be deposited regularly.

That money was paid back, but the amount of interest involved remain points of contention with the employee and former employee involved, she said.

The motivation again seemed to be plugging cash-flow shortfalls to keep the agency going.

“(The finance director) had been for years charged with paying the bills with no money. She inherited a system; she worked within it,” Roberts-Fer said.

New guidelines were put in place to standardize and regularize the agency’s methods of doing business, she said.

“Everybody makes mistakes. For an organization, the question is, do you respond to the problem? We did,” Roberts-Fer said.


REACH’s financial problems longstanding

The financial woes of REACH of Jackson County weren’t a mystery. Exactly one year ago this week, Roberts-Fer warned that the financial situation was so bleak the nonprofit faced the possibility of shutting down.

Before Roberts-Fer took over three years ago, REACH had opened a $1.1-million transitional-housing complex for victims trying to escape abuse back in 2001. It was a questionable financial venture from the get-go: The nine-apartment village, no matter how skillfully operated and managed, would never actually generate the funds to pay the loans, much less keep pace with general repairs and upkeep. The only income to offset the expenses was rent from the tenants, and even if fully rented, it would not pay the mortgages and expenses. The loan amount owed was $840,074.

The REACH village went into foreclosure, and associated costs bled dollars from the agency. Recently control of that housing complex shifted to Mountain Projects, a nonprofit that administers programs to benefit the needy and elderly in Haywood and Jackson counties.

Roberts-Fer said REACH of Jackson County also had been overspending during those years, including dipping into, and ultimately depleting, emergency financial reserves.

Even the agency’s thrift shop had been barely breaking even.

Adding to the difficulties were sky-high insurance payments on the agency’s emergency shelter after Bonnie Woodring, who was seeking protection from an abusive husband, was gunned down by John Raymond “Woody” Woodring in September 2006. He shot her inside the shelter after muscling his way in. Woodring later killed himself.

Additional security measures at the shelter were added in the wake of the shooting, another expense for REACH.

But perhaps most critically, at least when it came to the agency’s financial wellbeing, grants and other funding streams REACH relied upon have virtually dried up. Macon County’s VanHarlingen said her agency also has faced increasing financial constraints because of the overall economic climate.

“It is difficult for everybody,” she said.

In response to the financial crisis, Roberts-Fer had cut the number of employees at the agency and streamlined programs to barebones levels: operating an emergency shelter, offering legal advocacy and maintaining a hotline.

Jackson County Manager Chuck Wooten raised the possibility of combining some elements of the individual agencies in the region to offset costs. But, VanHarlingen cautioned that immediate shelter and help needed to be available in individual communities. At one time REACH of Macon County was an extension of the Jackson County agency.

“When we were the Macon outreach for Jackson County, that meant sometimes transporting a client over Cowee on a snowy night,” she said.

The need for help in Jackson County, REACH or no REACH, isn’t likely to disappear.

During fiscal year 2009-10, REACH of Jackson County received more than 400 crisis-line calls, provided emergency shelter for 37 women and 48 children, and was involved in 269 counseling sessions.

Wooten described the need as critical and said he expects REACH’s demise to be a topic of discussion at the Feb. 20 Jackson County Board of Commissioners meeting.

Whittier’s $5 million wastewater treatment plant could be facing eventual financial insolvency, saddled with too much overhead and too few customers to make operation viable.

The sewer plant, in hindsight, was overbuilt for growth and development that failed to materialize along the U.S. 441 corridor in Jackson County that leads to Cherokee. Ten years later, the plant with a capacity to treat 200,000 gallons is handling a mere 8,000 gallons with just 36 customers.

There’s only enough money to keep operating, as-is, for two more years. Then it’s decision time for the Tuckaseigee Water and Sewer Authority. TWSA, formed to oversee water and sewer needs for Jackson County’s residents, is the reluctant manager of Whittier’s treatment plant, a role the authority inherited. Stakeholders such as Jackson County and the Eastern Band of Cherokee Indians also must make funding decisions when current payments and savings run dry. And, Jackson County would like to see Swain start helping out after learning that most of the customers are actually residents of that county.

“This could be a little touchy,” Joe Cline, executive director of TWSA, told Jackson commissioners recently. “But, the majority of this system lies in Swain County. And they’ve never been asked to participate.”

“Looks like we should be sending someone a bill,” Commissioner Doug Cody noted.

The plant was built with grant funding, including a nest egg to subsidize operations until the customer base grew. Jackson County and the tribe struck an agreement to pitch in during the initial start-up years.

Jackson County has kicked $300,000 into the plant. It relies on the facility to handle wastewater from nearby Smokey Mountain Elementary School.

The tribe originally bought into the plant concept, to the tune of $100,000 a year for three years, in hopes of using the facility to serve a recreation complex and golf course. Cherokee, which owes one remaining $100,000 payment, ended up taking care of its own wastewater needs from the complex and golf course, arguably getting little out of its investment but making good on its promise.

The Whittier Wastewater Treatment Plant has 25 residential and 11 commercial customers. It has added just a single three-bedroom house to the customer rolls since the plant came online just more than 10 years ago. The customers served by Whittier’s wastewater treatment plant chip-in a total of $20,000 a year to the cost of operating the plant, which comes to about $180,000 annually.

It processes so little sewer that its systems have trouble functioning at times.

“We have to haul sludge to the plant when school is out to keep it operating properly,” Cline said.

Before the sewer plant was built, projections showed 40 customers had an interest in tapping in to it. Of those, 10 or 15 weren’t close enough to tie on to the system after all. Another six or so had done something else while the plant was being built, such as put in individually owned septic systems.

“If the projections were correct, then at the end of two years, TWSA would have been able to take over and break even, debt free, with operating revenues to pay the costs of going forward. Problem is, the projections haven’t come true,” Jackson County Manager Chuck Wooten told county commissioners recently.

Wooten emphasized that he would like to see TWSA retain its role with the plant, which is technically under the management of the Whittier Sanitary District. That group has been the target of sharp criticisms for lack of accurate recordkeeping and failures to submit timely audits to the state as required.

Still, Wooten maintained, the plant “is an asset, there’s no doubt about it. It’s just a waiting game, it’s waiting on the development. But the plant will allow the development to take place.”

As of this week, Jackson County had not officially contacted Swain County about helping to offset costs at the Whittier wastewater treatment plant.


Such a big plant to serve so few: how the Whittier Wastewater Plant came to be

Just more than 10 years ago, setting the table for economic growth around Whittier seemed something of a no-brainer — the casino in Cherokee was booming, and it seemed inevitable that businesses such as restaurants and hotels would clamor for space in the gateway area along the U.S. 441 corridor leading into Cherokee.

Meanwhile, residents in the unincorporated community were complaining about failing septic systems. Whittier lies along the Tuckasegee River, saddling the borders of Jackson and Swain counties. There were some reports of straight-piping sewage into the Tuckasegee River. The nearby Church of God’s Western North Carolina Assembly wanted to expand. The septic system at Smokey Mountain Elementary School, a few miles along U.S. 441 in Jackson County, no longer could serve the number of students required. And, the Eastern Band of Cherokee Indians was completing a recreation complex and was intent on building a golf course not far away, both eventually finished and now open. Under the guidance of the Southwestern Development Commission, these stakeholders came together and built the Whittier Wastewater Plant.

The Haywood Board of Commissioners agreed to put its John Hancock on a letter asking the N.C. Department of Transportation to post an additional “This way to Cherokee” sign near Dillsboro.

The letter is a classic case of turn-about being fair play. Jackson County previously touched off a firestorm when it asked for a sign in Haywood County directing Cherokee-bound travelers past their own doorstep, hoping to divert traffic from the Maggie Valley route its way.

“Traffic is the livelihood of Maggie Valley,” said Commissioner Mike Sorrells “As we all know, that particular area is struggling.”

So in a rebuttal of sorts, Haywood leaders are asking for a sign in Jackson that would direct tourists to Cherokee back through Haywood County.

Specifically, Haywood’s letter asks DOT to consider placing a sign on U.S. 441 in Dillsboro to catch travelers coming up from the Atlanta area. The new signage would inform motorists that they can also reach Cherokee by coming back through Waynesville and Maggie Valley, although it is considerably longer than simply continuing on U.S. 441 to Cherokee.

Haywood County leaders stated that they are willing to share the expense of the new sign pointing Haywood’s way.

Because DOT’s safety and travel time survey’s do not favor one route over the other, Haywood County officials say there is no reason to post alternative signage directing Cherokee traffic through Jackson County instead of Maggie Valley.

“I don’t necessarily oppose it, but it’s not necessary,” said Chairman Mark Swanger.

However, Jackson County leaders say that two-lane U.S. 19 can be treacherous for large vehicle drivers and during the winter months.

Cece Hipps, president of the Greater Haywood County Chamber of Commerce; Teresa Smith, executive director of the Maggie Valley chamber; and Lynn Collins, executive director of the Haywood County Tourism and Development Authority have already signed the letter.

Page 62 of 106

This Must Be the Place

Reading Room

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