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.