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Wednesday, 19 August 2009 14:27

Cash settlement amount proves a sticking point

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Negotiations over a cash settlement for Swain County have been stalled for more than a year as opposing sides argue over a fair dollar amount.

Swain County officials have met three times with the U.S. Department of the Interior to discuss a dollar figure for the cash settlement, but negotiations were called off last July. The leading reason is a change in Washington administration, from a new president to a new secretary for the Department of the Interior and various players down the line — all of whom must be briefed and educated on the long-standing controversy.

The negotiations also ground to a halt after the U.S. Park Service mentioned a dollar amount for the settlement that is drastically lower than what Swain County expected to hear.

For six years, Swain leaders have operated under the assumption they would get a $52 million cash settlement from the federal government if they gave up their claims to the long-promised North Shore Road. The federal government promised to rebuild the road after flooding the old one during the construction of Lake Fontana in the 1940s. Building a new one would traverse 30 miles of backcountry in the Great Smoky Mountains National Park, an expensive and environmentally unsound proposal — thus making the cash settlement a more viable alternative.

U.S. Congressman Heath Shuler, D-Waynesville, has been fighting for a cash settlement since taking office three years ago and stands by the number of $52 million.

“That number has been pretty consistent. That is the number that has been out there,” Shuler said.

Shuler said he does not know why the park service came up with such a low number in negotiations.

“It may have just been thrown out there to say ‘Let’s see if they’ll take this,’” Shuler surmised. “I think like with any negotiation, one group will start out low and one group will start out high.”

That said, Shuler doesn’t want to bend on $52 million, nor do the Swain County commissioners who will ultimately accept or reject any offer on behalf of the county.

According to those familiar with the negotiations, Great Smoky Mountains National Park Superintendent Dale Ditmanson has been actively pushing for a far lower number. In a response to written questions, Ditmanson countered that claim, however.

Ditmanson said that the park service has not yet made Swain an offer for a monetary settlement. When asked how he would characterize the figure he allegedly brought up during the negotiations, Ditmanson did not respond.

It is unclear how much sway Ditmanson will have over the final number the Department of the Interior puts on the table.

“As superintendent, my primary responsibility is to do due diligence in identifying a justifiable basis for a monetary settlement and briefing the leadership of the National Park Service and the Department of Interior,” Ditmanson said in his written response to questions.

Ditmanson said the purpose of the negotiations right now is to determine exactly how Swain County has calculated the figure of $52 million and whether it is accurate. The premise is that it starts with the value of the road at the time it was flooded and adjusts it for inflation and interest. But exactly what the starting number should be is a matter of debate.

“Determining a basis or calculation for a monetary settlement is a primary purpose of the meetings with the four parties,” Ditmanson said. The basis will be explained in the final agreement, he said.

The sum of $52 million was arrived at by the Citizens for the Economic Future of Swain County, a group that formed to advance the cause of a cash settlement. In 2002, the group hired the accounting and auditing firm of Crisp and Hughes to do the calculations.

Shuler said he has been educating the new guard in Washington about the North Shore Road issue, including a meeting with President Obama’s chief of staff and a breakfast with the Department of the Interior Secretary Ken Salazar.

“We have to reengage them back into the process,” Shuler said.

As for Ditmanson, he has briefed the assistant secretary of the Department of the Interior and the acting director of the National Park Service. There is no permanent director appointed yet.

The past three negotiation meetings have had a delegation from Swain County, the state, the National Park Service and the Tennessee Valley Authority, which built the dam and lake that flooded the road. Ditmanson expects another meeting between the parties to be held this fall.

Shuler said the decision of how much to appropriate for a settlement is ultimately up to Congress, and he will fight for what he calls a “complete settlement.”

Shuler managed to rally support among fellow congressmen and senators for a cash settlement two years ago. But that was when building the road was still on the table and the park service was in the final throes of a major analysis weighing the pros and cons of each option.

During the analysis, the park adopted the figure of $52 million and quoted it extensively as a leading alternative to building the road during a lengthy public input process. That led the public to believe that if the monetary settlement was supported, that’s the amount Swain would be getting.

But Ditmanson now says the figure was used only for “analysis purposes,” largely because it lacked anything more concrete. The $52 million figure had been proposed by Swain’s leaders, so the park ran with it during the analysis.

When the analysis concluded and the park came out with its official stand on a cash settlement instead of the road, the $52 million figure vanished and was replaced with the language “monetary settlement,” with “an equitable method” for arriving at a dollar figure to be determined through negotiations. Ditmanson was appointed as the Department of the Interior’s point man in those negotiations.

Ditmanson said his job is now in the “due diligence” stage.

Shuler said the full settlement of $52 million is needed “to heal some wounds and bring people back together in the community.”

When asked about the public relations crisis the park service would likely encounter by refusing to endorse a settlement of $52 million, Ditmanson said his responsibility is merely to determine an equitable amount.

“I cannot comment on how the public will respond,” Ditmanson said.

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