The U.S. Department of Interior, under the new leadership of Secretary Ryan Zinke, finally coughed up a payment to Swain County as part of the North Shore Road settlement agreement.
The federal government waited until the 11th hour to issue a response to Swain County’s North Shore Road lawsuit — and the response was not surprising.
After waiting for years to get the money promised to them, the Swain County commissioners made a unanimous decision last week to sue the federal government for $38.2 million.
“It’s about our only option left,” said Commissioner Steve Moon.
Swain County officials are hoping new leadership in the Great Smoky Mountains National Park means the start of a new relationship — one that will include better communication between the park and the county that is a gateway community.
Swain County is one step closer to getting $4 million in “Road to Nowhere” funds after a bill introduced by U.S. Congressman Mark Meadows, R-N.C., advanced through the House Committee on Natural Resources last week. Though the bill, H.R. 3806, is not yet on the House calendar, Meadows’ office expects it to come to a vote sometime this week.
It is a day Lawrence Hyatt looks forward to all year — venturing into the Smokies backcountry to pay homage at the graves of early settlers who lived there.
What happens when you finally get to the end of the rainbow and there’s no gold in the pot? Perusing The Smoky Mountain News the other day, I ran across Becky Johnson’s piece about the $52 million dollar cash settlement, an agreement supposedly signed, sealed and delivered in 2010 that would pay Swain County $52 million in lieu of a 1943 agreement
A long overdue $4 million payment may finally make its way to Swain County after languishing for the past year in the budget dungeons of the National Park Service.
The payment is part of a larger $52 million cash settlement the federal government pledged to pay Swain County — a deal intended to finally compensate the county for a road that was flooded when Fontana Lake was built in the 1940s.
Swain County’s uphill battle to get the federal government to make good on its promise of a $52 million cash settlement may have just gotten tougher.
The federal government is supposed to pay Swain County $4 million a year over the next decade — a deal intended to finally compensate the county for a road that was flooded when Fontana Lake was built in the 1940s. But after an initial down payment of $12.8 million in 2010, Swain hasn’t seen a penny since.
And now, with the federal budget process barely out of the starting gate for 2013, Swain is already starting from behind. Its promised $4 million was left out of President Obama’s budget for next year.
Congressman Heath Shuler, D-Waynesville, said he is baffled at how or why the $4 million cash settlement appropriation was left of out of the Presidential budget, pledging to press the White House until resolved.
“White House officials acknowledge that the omission of North Shore Road funding in the 2013 budget is problematic and have pledged to work with us to deliver the funding as promised,” Shuler said in a statement.
Shuler has twice gotten the annual $4 million payment appropriated for Swain County as part of the National Park Service budget — but both times it failed to actually reach Swain County. In 2011, the payment was rescinded after being caught up in an across-the-board clamp down on earmarks. So far in 2012, the National Park Service is refusing to release it, citing bureaucratic procedures that it wants followed.
For 2013, the payment could still make it in Congress’ budget even though it didn’t show up in the president’s. The president’s office has signed on in theory to support the funding even though it was somehow left out of its own budget document.
“I have been working closely with the administration to resolve this issue swiftly as well as release the $4 million in already-appropriated fiscal year 2012 funding currently sitting in the National Park Service’s account,” Shuler said.
But, Shuler is a lame duck now, having announced his retirement at the end of this year.
Shuler was perhaps one of the best advocates for the cash settlement Swain could hope for — at least in his willingness to expend political capital trying to land the appropriations each year. Growing up in Swain County, Shuler was unavoidably immersed in the raging battle over the road that hung over the county like a black cloud for so many decades.
Now, it will be up to his predecessor to carry the torch for Swain or not.
The Democrat running for Shuler’s seat, Hayden Rogers, said he supports the cash settlement and would fight for the annual appropriations as Shuler has.
“If elected, I will work to ensure that the remaining funding owed to Swain County is delivered as promised,” Rogers said in a written statement.
Rogers, who grew up in neighboring Graham County, served for six years as Shuler’s chief of staff, and is likely well versed in the political maneuvering behind the cash settlement appropriations.
The leading Republican candidate for Shuler’s seat, Mark Meadows, said it is a sad state of affairs indeed.
“We have an obligation we agreed to many, many, many years ago that wasn’t fulfilled and so we did another agreement and now we are not fulfilling that. At some point, we have to be good to our word,” Meadows said.
But, Meadows questioned how genuine it was for Shuler to lead Swain County to believe that he could land these appropriations each year in the first place.
“A current Congress can’t really obligate a future Congress to appropriations and therein lies the problem with the agreement,” Meadows said.
Meadows said it is unfortunate the cash settlement has fallen victim to the earmark ban, even though in principle the ban on earmarks was necessary to rein in federal spending and pork. But, it begs the question how Rogers plans to carry the torch.
“For Hayden (Rogers) to say he is going to continue to fight for that when we have an earmark ban, that is problematic,” Meadows said. “It is like saying ‘I’ll do my very best.’”
Meadows said Rogers, as Shuler’s right hand man, had his chance and didn’t perform. At this point, a strategy of meting out annual line item appropriations will continue to be difficult. A better strategy may be to get a larger, one-time budget allocation.
Meadows still faces a special primary election run-off July 17 against fellow Republican Vance Patterson to decide who will ultimately advance to face Rogers in November.
Shuler and Swain County leaders hold out hope they can convince the National Park Service to release the $4 million that was appropriated in 2012 budget. Specifically, it was included in the National Park Service’s construction budget, a total of some $159 million.
But, the park service claims it needs specific authorization — special language spelling out that $4 million should be handed over to Swain County.
When it comes to the rest of the $154 million construction budget, the passage of the appropriations bill itself counts as authorization, according to Jeffrey Olson, a spokesperson for the park service in D.C.
But as for the $4 million cash settlement contained in that same construction budget, simply passing the appropriations bill doesn’t cut it, Olson said. For that one particular line item out of everything else in the $159 million construction budget, the park service wants special language passed by Congress saying they really meant for the money to be spent that way.
“As I see it this as a problem with Washington, D.C.,” Meadows said. “You have money both people acknowledge was probably put in there for Swain County, and now we can’t release it because it doesn’t have the proper authorization.”
The fate of the $4 million at this point isn’t clear. The park service can’t spend it on anything else. If the money isn’t turned over to Swain County, the park service would give it back unspent to the federal government’s treasury.
Meanwhile, those who never stopped fighting for the road — and were opposed to the idea of a cash settlement in lieu of building it — have been quick to chime in with an “I told you so.”
“I never thought we would get the money to start with,” said David Monteith, a Swain County commissioner who was for the road and against the cash settlement.
Monteith believes the cash settlement was a sell out. He wanted to keep fighting for the road, hoping that eventually one day it would get built. By signing the cash settlement, the county gave up its claim to the road in exchange for cash — but it is contingent on the federal budget process and comes with no guarantee.
“It’s ‘if and when’ they want to release the money. That’s pure stupid,” Monteith said.
Of course, there was a similar caveat in the original agreement by the federal government promising to rebuild the road it had flooded. The government promised to rebuild the road “if and when” Congress appropriated the money to do so. The nation was in the throes of WWII, so it seemed reasonable to give a war-embroiled nation a little wiggle room on building back a flooded road in remote Appalachia. Seventy years was obviously more wiggle room than the people of Swain County expected, however.
The latest double-cross by the National Park Service is par for the course, according to Mike Clampitt, a Swain County resident who also sided with the “build the road” camp.
“Again we have an empty broken promise to the people of Swain County by the federal government,” Clampitt said. “I am not surprised that there are these complications getting the money to the people of Swain County because of quote ‘red tape.’ It is insult to injury.”
Swain County leaders have been hoping Shuler could fix the hang up with the National Park Service. So far, they’ve not waded into the bureaucratic quagmire to demand that NPS release the money and instead let Shuler do the heavy lifting. Clampitt said they should be more proactive at this point.
While Swain County fights to secure the rest of the $52 million cash settlement its owed by the federal government for the North Shore Road, the $12.8 million already in the bank is generating hundreds of thousands in interest every year.
Since the initial payment of $12.8 million to Swain County in 2010, it has made nearly $1.5 million in interest.
The cash settlement money is held in a trust fund managed by the N.C. Treasury Department. Every year, the state remits a portion of the accumulated interest to the county. The principle itself is safeguarded, and can only be tapped if two-thirds of Swain’s registered voters agree to do so in a special vote, per the terms of the trust fund.
So far, Swain has gotten $150,000 of the interest generated on the account. Even though the actual interest earned on the fund is much higher, some has been reserved as a cushion, intended to safeguard the principle $12.8 million.
Should interest rates take a dive, or even post a lost, the cushion that has been held back should prevent an erosion of that principle sum from dipping below the $12.8 million.
The fund currently stands at just over $14 million, according to the state treasurer’s office. Now that a sizeable cushion has been built up, Swain can expect to see more interest flowing to it each year and less held back. This year, the county could expect as much as $500,000.
How to spend the money is ultimately up to the county commissioners. The current board of commissioners don’t want to merely dump the money into the county’s general budget, but instead want to see it go toward special projects, so the public can see the good the money is doing, according to County Manager Kevin King.
“They didn’t want to see any of the money going to the operational budget because it gets lost in the shuffle,” King said. “We want to be able to identify every penny that goes to every project.”
Likewise, the commissioners are hesitant to use the money for a big-ticket item, like a new school. Dedicating the money to that kind of recurring expense — such as annual debt payments on the same large construction project year in and year out — would tie up the cash settlement interest on a single project for the foreseeable future, King said. Instead, the county is interested in special projects that otherwise would be taxing, if not impossible, for the county to undertake.
So far, the county has spent its cash settlement interest money on public restrooms at a downtown riverside park in Bryson City, a series of historical monuments, a new trash truck and renovation of the historical county courthouse for a museum.
The commissioners have dedicated $50,000 so far for a cultural heritage museum being constructed inside the iconic Swain County courthouse, and have pledged another $100,000 from future interest payments.