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A comprehensive economic development strategy would go a long way toward solving the quagmire that is holding back progress on the Jackson County Economic Development Commission, the EDC board decided this week.

“This is probably the most important issue,” said Joe Cline, the chairman of the EDC. “If we wait until the economy starts turning back around and everybody has done the groundwork and are ready to go, they will be miles ahead of us. We won’t be on a level playing field.”

The EDC has been preoccupied for much of the past year with what its role is. The county, which provides most of the funding for the EDC and employs its director, has provided little direction on what the nine-member volunteer board should be doing. The body is also caught in a power struggle between the county and towns.

It is further plagued by lingering controversy over alleged financial mismanagement dating back several years that remains unresolved. Meanwhile, the EDC director has just resigned, leaving the entity even more rudderless.

Bringing in a consultant and assembling a task force of stakeholders to forge a new direction could be the answer to the problems, Cline said.

“I agree there should be some kind of strategy on the table,” said Cecil Groves, president of the Southwestern Community College and an EDC member. “I think it will take someone out the region, outside the immediate family, to come in and look at this and give some objective approach to get people together and unified in a direction they are comfortable with.”

Cline said the question is how much such a study would cost and who would put up the money. The outgoing EDC director estimated a good one would cost $200,000.

“You almost can’t afford not to do it. It is something that is definitely needed,” Cline said. “But that is a lot of money.”

County leaders have expressed interest in taking a step back and developing a comprehensive economic development strategy under the guidance of a consultant. The EDC has money sitting in its coffers, which has accumulated over several years. The county would have to approve spending the money, however.

EDC members came to a consensus that Cline should approach county leaders to gauge interest and their level of financial support.

 

Elusive audits

Meanwhile, the EDC continues to struggle with how it can complete back audits from the years 2001 through 2005 when records from that period are incomplete.

Larry Morris, an EDC member from Cashiers, said the issue is like an albatross around the board’s neck. Yet since the county, not the EDC, is in control of whatever records do exist there is nothing the board can do but wait.

“I hope they can work in all due haste to resolve this. It seems to be a continuing issue that has lingered on for some time for whatever reason,” said Morris.

“There probably has been some feet dragging somewhat, but it has not been by this body,” Cline said. “I don’t even know where the records are for the years we are talking about. I don’t know who has custody of those at the moment. I agree it has been a frustrating, agonizing process.”

During the period in question, EDC records were kept at the office and home of the EDC chairman Tom McClure, who works in development at WCU. He acted as the body’s de facto director, although he was technically a volunteer. When the county grew concerned over a lack of financial oversight, it sent sheriff’s deputies to seize the records from McClure. Despite operating largely on county funds, the county technically had no authority to seize the records since the EDC was a standalone body, and it had to give them back again. But along the way, some disappeared.

“Those records just went missing. They got gone. There is no good explanation for it,” said Jay Coward, an attorney and member of the EDC.

Cline said the EDC has asked the district attorney and sheriff’s office to figure out if wrongdoing occurred.

“If there was anything done wrong, I don’t care whose doorstep it falls on, it needs to fall,” Cline said.

But no one has been willing to investigate, Cline said.

Cline said the only thing the board can do is make sure history is not repeated by making sure there is proper oversight, something that was lacking back then.

“The county and elected officials should have kept a closer check and eye on what’s going on,” Cline said. “If you are elected to take care of the taxpayers money and you allocated it, then you ought to at least know how those funds are being used. I think all of them share equal responsibility.

“It appears to me that everybody sat back until it got to a certain point and said ‘Wait a minute.’ Everybody tried to get in front of it and close the door to the barn after the cow got out,” Cline said. “Quite honestly, I don’t know if you will ever get totally to the bottom of it.”

Old records of the Jackson County Economic Development Commission are likely too spotty to complete missing audits from the years 2001 through 2005, although the county and EDC board say they will continue their quest to do so.

“The citizens deserve as much answers as can be provided. I don’t know how much can be provided, but I think everybody is committed to providing as much as they can,” said EDC Chairman Joe Cline. However, “It may be tough to pull the records together.”

Meanwhile, a watchdog group called Jackson County Citizens Action Group continues to dog the county and the members of the EDC, accusing them of a financial cover-up and lack of diligence in safeguarding public funds. Indeed, the entity had a pall cast over it when Jackson County leaders withdrew from the body four years ago and seized its records, citing concerns over financial management of tax dollars.

However, today’s members of the EDC are nearly all new, and they are ready to move on.

While it was actually a violation of state statute for the entity not to perform audits, the all-volunteer board didn’t realize it was supposed to be conducting them until the past couple of years.

“There is obviously some mismanagement and expenditure of small amounts that are not accounted for, but the large sums are fully accounted for,” County Manager Ken Westmoreland said of the missing audit years. “We are talking about nickels and dimes.”

Tom McClure, the director of Partnership Development for WCU’s Millenial Initiative, acted as a de facto director of the EDC during the time period. He kept many of the EDC records in his office and largely ran the entity’s financial affairs and managed its business on a daily basis, even though he was only the volunteer chairman of the board and not a paid director.

The past controversy that most haunts the EDC is the revolving loan fund, even though the revolving loan fund was under the auspice of the county and a nonprofit arm of the EDC called the Jackson Development Corporation. Defaults on revolving loans are actually what prompted the county to withdraw from the EDC four years ago and to pull a somewhat hostile takeover of the JDC’s assets and liabilities.

“Not only were some of these loans in default, but many times in the majority of the cases, the loans were not adequately collateralized,” Westmoreland said.

The loans helped prop up small industries and in turn support job creation. While several loans are still behind, all but one is still making payments, according to County Finance Director Darlene Fox.

This has not satisfied critics, who have attempted to trace the path of public dollars from the county, to the EDC, then to the JDC and finally into the hands of private businesses who have failed to keep up with payments. The JDC was dissolved and assumed by the county, so complaints from the public over the defunct entity’s dealings have landed on the EDC board.

The Jackson County Citizens Action Group has railed against both county leaders and the EDC, asking for answers for nearly two years, requesting public records, compiling their own outlines of events, and making pointed presentations on the issue during public meetings.

Marie Leatherwood, a longtime critic of the EDC, called the entity a “dark hole using taxpayer money with no accountability.”

“The tainted history of the EDC and their equally tainted defunct bankrupt property buying arm know as the JDC has totally undermined any confidence in these entities,” Leatherwood told EDC members at their last meeting.

Cline said that people should understand the current EDC members have nothing to do with the past dealings of a dissolved entity.

“I know the JDC is no longer in existence, but really you are complaining to the wrong people,” Cline said.

Most of the nine EDC members have come on board only in the past year, however, and only two were actually on board four years ago.

One of the new members, Dick Sterka of Sylva, said it was difficult to continually be held accountable for what happened before his time.

“I think everybody is ready to throw their hands in if we are going to be abused like this,” Sterka said following 25 minutes of public criticism at their last meeting by two individuals. “Our hands are tied.”

When Sterka was appointed to the EDC, he thought the controversies of the past were behind them. New bylaws were created and mostly new members were appointed, leading Sterka to believe they had started over from scratch.

“That’s what we thought we did,” Sterka said.

But the EDC was never formally disbanded, so today’s entity inherited the liabilities — both real and perceived — of the old board.

It’s one reason that Dorothea Megow-Dowling, the EDC director up until last week, suggests dissolving the EDC and creating a new one.

“My view as an outsider is that really has to be put to bed before anybody can move forward in any way,” said Dowling, who resigned this month after less than a year on the job. “Information will minimize the conspiracy stuff that goes on.”

That said, Dowling doesn’t think the past should be wallowed in. EDC Board Member Chris Matheson agreed.

“I think what we need to look at is what has gone right and what can we do to make the EDC run like it needs to run. There are so many people wanting to point fingers to the past. I think it counterproductive,” Matheson said.

That said, Matheson understands that members in the community are still confused about what transpired during the EDC upheaval.

“I respect their concerns and their desire to have answers,” Matheson said. “There was so much confusion it was difficult for me to get it straight myself.”

Jackson County’s economic development director Dorothea Megow-Dowling had been on the job for less than a year when she announced her resignation last week.

She came from a long career in economic development and specialized in strategy and planning processes.

“It is going to be unfortunate to see her leave,” Joe Cline, the chairman of the economic development commission told fellow members of the EDC at their last meeting. “The county and this board owes her a debt of gratitude for the work she has put in it has been tireless to say the least.”

More board members expressed regret after the meeting.

“She was fantastic,” said Dick Sterka, an EDC member appointed by Sylva.

Sterka’s company, Diversified Expo, helps works the trade show circuit, whether it’s hosting the shows or helping companies attend them. Given the circles Sterka runs in, he interacts with businesses regularly that may be interested in moving to a new area or expanding their operation, and as a result, he constantly fed Dowling tips on companies that would be worth courting.

“She was very active. Give her a lead and she was like a bulldog. I hate to lose her,” Sterka said.

Larry Morris, an EDC member appointed by the county, said Dowling excelled in strategy, which had ideally been the next leap the EDC would have been making.

“I was real pleased,” Morris said. “I thought we were making headway in the direction we needed to go. It is really unfortunate.”

Dowling says she has plans to move back to her home region of Michigan.

Jackson County’s Economic Development Commission has again been thrust into turmoil, a near constant state of affairs for the entity in recent years.

The county’s economic development director announced her resignation last week, and along with it, offered her views on what the county should do to kickstart a new day for its economic development efforts. Most notable on the list is to dissolve the economic development commission.

The resignation comes on heels of a somewhat contentious EDC meeting last month, where the mayors of Sylva and Dillsboro charged the county with stripping the EDC board of its power and relegating it to a mere advisory role.

Meanwhile, the EDC members say they can’t figure out exactly what they are supposed to be doing. The board has been preoccupied with their structure — namely whether they have any real authority or are simply an advisory board to county leaders.

The quandary over their role has dominated discussion at their meetings in recent months, distracting them from their ultimate mission of advancing economic development, EDC members say.

The EDC board is a joint venture between Jackson County and the four towns in the county: Sylva, Dillsboro, Webster and Forest Hills. It was created in the late 1990s.

Alleged financial mismanagement by those at the helm and concerns over a lack of oversight for public funds at the disposal of an all-volunteer body led the county to withdraw from the EDC in 2005. The EDC continued to limp along without county participation for 18 months until the county eventually threw its hat back in the ring.

The board was reconstituted with a new set of bylaws, but not without a power struggle between the county and the towns over who would hold the most authority.

It appears the issue was never properly settled and continues to pose problems — thus the still-festering issue over the board’s role and authority today.

Dorothea Megow-Dowling, the EDC director, 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.

“Things move on best when there is a very clear cut from a past situation that has been difficult,” Dowling said. “I don’t think that cut was perceived as adequate.”

Of the nine members on the EDC board, the majority have come on within the past year. Only three on the board were there during the past turmoils.

Yet the entity has been unable to shake itself of old baggage in the public light. In addition, it inherited a structure that isn’t working, Dowling said.

Dowling sees another fatal flaw: the lack of a comprehensive economic development strategy. Setting up an EDC structure, appointing members and hiring a director before a clear mission is defined is a backwards approach, Dowling said.

“I believe it would be very effective to let this current structure go and establish a steering committee to oversee an economic development planning process,” Dowling said. “My recommendation is to start with the task, scope the task, then put in place the best teams and resources you can to accomplish the objectives you’ve set. My recommendation is and has been dissolution of the EDC.”

Disbanding the EDC is not an easy proposition, however. It is not solely up to the county, or even to the EDC board members themselves. As so-called forming entities, all four towns in the county have a say on whether the existing structure remains in tact.

“We are stuck with it unless there is some willingness on the part of municipalities to do something different,” County Manager Ken Westmoreland said.

There was a failed attempt to dissolve the EDC board two-and-a-half years ago rather than reconstitute it. It was voted on by elected officials from the county and all four towns and failed by a vote of 15 to 13.

Dowling’s resignation has caused all the old tensions still lurking below the surface to emerge, Westmoreland said.

Joe Cline, chairman of the EDC, is reluctant for EDC members to wade into the fray over whether the board should be dissolved.

“I feel like that rests with the local elected officials,” Cline said. “It is up to the stakeholders and the people who put it together to decide.”

Cline acknowledged that some EDC members would like to weigh in. At the meeting last week, however, he suggested holding off unless the board is asked for its opinion.

“To me it is a moot point. One way or the other we could all be removed tomorrow,” Cline said at the meeting.

The board may be not be able to speak with a unified voice, however. Some members want to assert more authority and hold the decision-making power, while others are fine in an advisory role.

“The advisory board I think is the way we need to go,” said Larry Morris, an EDC member who owns a kitchen and bath cabinetry dealership in Cashiers.

 

What next?

At this point, the county will not rush to replace Dowling, Westmoreland said.

“I think we are going to take some time before we try to re-employ someone in this position to analyze some of these questions,” Westmoreland said. “I think we do need as a community and as a county to come to some general consensus as to what we are going to focus on.”

If an economic development director is preoccupied chasing every elusive job on the block, the county can’t focus its resources on the prospect that are the most probable fit.

“It may be three, four, five, half a dozen things that we can do best, that works with the environment and our labor market and infrastructure,” Westmoreland said. “We can’t just continue to go negotiate with everyone about everything.”

County Commissioner Tom Massie agreed. Massie likes the idea of taking a time-out to create a comprehensive economic development strategy before deciding on a new director or a possible new structure for the EDC board.

“We need to go through a planning process where we bring everyone interested in economic development to the table,” Massie said. “We have to get them all on the same page of the hymn book.”

Massie had hoped that the county could initiate such a process sooner rather than later, and believed Dowling’s skill set was well-suited to move the process forward.

“It is just a shame everything is caught up in this nitpicking,” Massie said. “It has been a source of frustration.”

Westmoreland isn’t sure the existing EDC board is the right vehicle to create a strategic plan. Westmoreland instead favors a special task force or blue ribbon committee to embark on a comprehensive strategy, guided by a professional consultant or facilitator.

“I think that would serve a very useful purpose to explore our strengths and weakness and what we are trying to pursue,” Westmoreland said.

A special task force should be crafted to include those with something to contribute to the discussion of economic development. The same approach should ideally be used when making appoints to the EDC itself, Westmoreland said.

“Those appointments need to have some expertise to assist in working with business prospects,” Westmoreland said. “Just appointing general citizenry with an interest in economic development won’t satisfy that need.”

 

Cart before the horse

Dowling said it would be wise to have an economic development strategy in place before bringing in another director.

“This goes to the crux of the matter that really needs resolution. What person do you want in place for the county and what do you want that person to be doing?” Dowling said.

A strategy should also be in place before a board is created, Dowling said. Instead, the board’s structure was inherited and appointments made to fill the seats before a task was decided on.

Since Larry Morris came on the EDC several months ago, he has seen the issue of the EDC’s role and its structure dominate their agenda.

“A lot of time is taken up by trying to determine what is our role,” Morris said. “We are struggling to define how best we can serve.”

Others shared his characterization of the meetings.

“The discussion tends to revolve around the function of the EDC rather than around the tasks required to help economic development progress,” Dowling said. “When that occurs again and again, for me, I make an observation that there is something not working well structurally. There is frustration all around.”

Morris would rather spend his time working for economic development, but thinks they need a comprehensive strategy and approach, which doesn’t exist now.

“Should we be focusing on studies and research, infrastructure growth, or sitting back and waiting until a prospective business makes an inquiry about moving here?” Morris said.

That’s the issue Morris would like feedback on from the county and towns.

“It is pointless for use to think in one direction if the people we are accountable to are thinking in a different direction,” Morris said.

 

Structural makeup

The EDC board is a joint entity comprised of appointees from each of the towns and the county. But Dowling reports directly to the county manager — not the EDC board. That has bothered some on the EDC board, and the mayors of Sylva and Dillsboro.

Cline countered accusations that the issue is one of a power struggle. “It shouldn’t be an issue of a power struggle,” Cline said.

He said the EDC members merely need clarity.

“There is confusion there with it being a county employee but working for the EDC board,” Cline said. “How can you serve two masters? We all need to be on the same page, but at the end of the day, there can really only be one boss.”

Cline said it has to be one or the other.

“Does the county and municipalities want us to be an advisory board or a totally independent board?” Cline said. “Right now we are operating with one foot in each.”

As a result, the board has been preoccupied with what its role is, Cline said.

The EDC members have drafted a list of questions they want the towns and the county to answer, primarily dealing with what their role is but also what types of economic development projects they should be undertaking. The plan is to present the list of questions in the run-up to a joint meeting held each quarter between all the town boards and the county.

“Our position is we just want to be told by the people that formed this what they want,” Cline said.

It is unclear why the issue has come to a head again. The job description for the economic development director was hashed out during a lengthy round of meetings between the county and towns two-and-a-half years ago and included a clause that gives the county manager hiring and firing authority over the director rather than the board.

Jackson County antes up most of the money for economic development. While the county puts in $105,000. Each town puts in just $1 for each resident, amounting to a few hundred for Dillsboro, Webster and Forest Hills, and $2,500 for Sylva.

The county ultimately shoulders the financial burden of economic development, and therefore argued at the time the economic development director should be a county employee under county control.

“It was never our intention that the only job responsibility for the economic development director was to staff the EDC,” Massie said.

Cline, however, points out that the job description for the EDC director, says he or she will report both to the county manager and the chairman of the EDC board.

“There is no dispute it is a county employee and a county position,” Cline said. “Everybody understood it was a county employee and the hiring and firing of that position would rest with the county manager. But it was also stated they would work for the EDC.”

Whatever the case, the actual role of the EDC remains a source of confusion not only for those on it, but some town leaders, Dowling said, and therefore needs fixing.

“Obviously, it was not clear in their minds. Obviously, everybody did not have the same understanding,” Dowling said.

Westmoreland doesn’t see anything wrong with the EDC serving in a formal advisory role, just as the planning board or any number of county boards are advisory in their capacity.

Massie said the question of whether the EDC should officially be dubbed an advisory-only body is one he can’t answer right now.

“That is a role that will have to be determined at some point in the future. I can’t preconceive what the outcome of that is going to be before we have those discussion,” Massie said.

Cline said regardless of how the seats at the table are divvied up, the EDC will represent the entire county fairly.

“You are not going to say for example if you don’t have a representative from Sylva that there won’t be any economic development in the town of Sylva,” Cline said.

Cline doesn’t think the debate over the board’s structure is a major hurdle.

“Everyone is committed to the economic development of the county and understanding what is the best way to do that,” Cline said.

 

Other focus

Some EDC board members complained at last month’s meeting that Dowling was doing the bidding of the county at the expense of their own board.

“I can understand perhaps why the EDC board feels somewhat neglected,” Westmoreland said. “We have consumed almost all of her time on several significant projects.”

But with good reason. Dowling’s calendar has been filled in recent months with courting several major employers with the prospect of bringing new jobs to the county. One is widely known already: an expansion of the Jackson Paper plant.

To land the jobs, the county promised incentives. While it is not a new tactic, it was for Jackson. Dowling had to craft the incentive deals and legal contracts from scratch.

Westmoreland said the minutia of orchestrating the state and county incentive packages is immense.

“You don’t just touch bases or two times you touch base dozens of times,” Westmoreland said.

Dowling has several similar ventures in play from companies that expressed an interest in setting up shop on the old Tucksegee Mills property and the Whittier Industrial park. Dowling did not brief the EDC board on the prospect employers she was working with, however.

Cline said she should have, since the EDC’s role is presumably to help facilitate new companies moving into the county.

“There was no point in us even meeting once a month with no information about what was even going on,” Cline said.

But Westmoreland said Dowling can’t disclose the prospective companies to the EDC board.

“These prospective business plans are very proprietary,” Westmoreland said.

There are too many people on it from too many different entities to ensure that word wouldn’t leak out, he said.

With most economic development boards in the region, the EDC director does disclose — in private sessions — the companies that are being courted.

Westmoreland said he would rather disclose the prospects to handpicked stakeholders, mainly just those in a position to bring resources to the table.

Dowling said she has also spent time in her initial months on the job meeting with stakeholders and prospective partners.

“I’ve laid some groundwork with people and organizations that might be able to work with the county,” Dowling said. “I am very pleased I have been able to help the county with the things I have become involved with,” Dowling said.

An $18,000 marketing study conducted for Jackson County by consultants from Texas fell short of what the firm promised, according to members of the Jackson County Economic Development Commission.

So the economic development commission is asking for its money back.

An overhaul of economic development strategy in Jackson County has temporarily stalled over who will be in charge.

By Sarah Kucharski • Staff Writer

If there’s one thing economic development officials agree on, it’s that there’s no one right way to do it.

By Sarah Kucharski

In January 2005, Jackson County Commissioners called in more than $1.2 million in loans issued to six local industries, suspended participation in the Economic Development Commission and launched an investigation of the commission’s financial records.

By Sarah Kucharski • Staff Writer

Two years have passed since the Jackson County Commissioners suspended their participation with the local Economic Development Commission, launched an internal investigation and audit of the EDC and EDC office and attempted to remove Tom McClure — the EDC Chairman, chairman of the county’s revolving loan committee and Chairman of the Jackson Airport Authority — from all county committees and appointments.

A proposed big box development featuring a Home Depot and Super Wal-Mart as anchor stores would bring a $45 million investment to the town of Waynesville, according to Haywood County Economic Development Director Mark Clasby.

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