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fr itsashulerA $4 million payment to Swain County for the so-called Road to Nowhere cash settlement may soon be freed of the bureaucratic purgatory where it’s been parked for more than two years.

Swain County leaders were relieved this month when the state gave them the go ahead to tap $382,000 in interest from the North Shore Road settlement trust fund.

The recent three-day trip to Washington, D.C., marks the fourth time Swain County representatives have visited the capital during the last couple years.

fr swainThe outlook for Swain County doesn’t look any better this year than it did the last three years in its quest to make good on the government’s stale promise of a cash settlement.

fr decorationdayIt 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.

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 In 2011, the payment was rescinded after being caught up in an across-the-board clamp down on earmarks.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.


Park service hang-up

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.


Not surprised

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.

“It’s like déjà vu all over again,” quipped the legendary Yogi Berra after watching Yankee greats Mickey Mantle and Roger Maris hit back-to-back homers so often it became almost commonplace.

That’s the sentiment many in Swain County are feeling after the most recent twist in the long and tortuous North Shore Road battle. Another broken promise, like déjà vu all over again. But for those who have been involved in this fight, there is nothing funny about the federal government holding up payments it promised to residents in lieu of rebuilding the road. In fact, it’s imperative that this current impasse get settled, and quickly.

The North Shore Road saga is littered with bruised feelings and broken agreements. The $52 million cash settlement was agreed to in a 2010 memorandum of understanding that was signed at Swain County High School in a ceremony attended by 200 people. The payments were intended to resolve the decades-old dispute between Swain County and the federal government over a road flooded during the construction of Fontana Lake back in the 1940s. The government at that time promised to rebuild the road but never did.

But it wasn’t just the broken promise to build the road that has contributed to the emotional turmoil suffered by many in Swain County. Throughout the 1950s, 1960s, 1970s and 1980s, senators and congressmen from North Carolina lined up on different sides of the issues, cajoling presidents and cabinet secretaries to either build the road or compensate Swain citizens for their loss. Many visited the area, promising to do what they could in Washington. It has been a decades-long seesaw, with momentum swinging wildly with the political winds.

Through all of this, it has been Swain County residents who suffered. Families have been divided and friendships strained. That’s why the 2010 memorandum of understanding was so important, because no matter what side of the issue one believed in — build the road or provide just compensation — there was finally an end in sight.

Now federal bureaucrats, hopefully just temporarily, are foiling that agreement. The short description of the current imbroglio goes something like this: an initial $12. 8 million payment was made in 2010. The 2011 payment of $4 million was lost to budget cutting. This year’s $4 million was included in the Park Service’s budget, but because there was not line-item description in the budget directing NPS bureaucrats to send the money to Swain, it can’t be released, they say.

We’ll call bull on that. The agreement has been signed, and Park Service bureaucrats should not be able to hold up payment on what is owed to Swain County. If Rep. Heath Shuler, D-Waynesville — who happens to be a Swain County native — can’t get this fixed pretty quick, then we’ll have to agree with those who have long insisted the feds had no intention of holding up their end of this deal. We hope the naysayers are mistaken.

(Scott McLeod can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..)

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.

The National Park Service is refusing to let go of a $4 million payment Swain County is due as part of the cash settlement over the North Shore Road.

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.

Swain has had little luck getting the government to make good on the pledge, however.

Swain didn’t get the money in 2011 after Congress clamped down on earmarks. This year, the money was supposedly included in the National Park Service’s construction budget by both the President and Congress, but the park service isn’t releasing the money.

“It is currently sitting in the National Park Service’s account,” said Whitney Mitchell, spokesperson for Congressman Heath Shuler, D-Waynesville. “It is unclear why the National Park Service has delayed transferring the $4 million payment out of their budget into the Swain County trust fund.”

The National Park Service claims it doesn’t have proper authorization to make the payment.

Simply including the money in its budget isn’t enough. The park service claims it needs specific authorization — spelling out that $4 million should be handed over to Swain County — included as part of the budget bill that was passed by Congress last December.

SEE ALSO: Swain uses money from first North Shore Road payment on special projects

“While the funding was included in the final bill, the necessary language was specifically excluded,” said Jeffrey Olson, a spokesperson for the National Park Service in Washington, D.C.

Without that language, it won’t turn over the money, Olson said.

“Everybody agrees the $4 million for Swain County was passed,” said Leonard Winchester, a Swain County resident who has been working on behalf of the cash settlement for years. “Why this money can’t be turned loose because someone at Department of Interior said they didn’t have the proper authorization, I don’t know.”

Shuler’s office, meanwhile, claims the money included in the budget carries clear instructions to be handed over to Swain County.

Olson was unable to address the apparent stalemate, simply reiterating that the park service lacked authorization to release the money.

“That is the end of the question for us,” Olson said. “If a member of Congress says ‘Yes it is,’ and we say, ‘We don’t have it,’ that’s as far as I can take it. It either shows up in the language of the appropriation bill or it is not there.”

Specifically, the money for the cash settlement was included as part of the National Park Service’s construction budget, a total of some $159 million. That’s something even Olson agrees with.

But where he differs is whether the $4 million for the cash settlement needs its own authorization before it can be released.

Olson said everything else in the construction budget carried the necessary authorization. That authorization usually comes in the form of an itemized list of approved construction projects.

“When we have a construction budget, it often includes a list of projects. It is my understanding that list of projects is our authorization,” Olson said.

However, that itemized list doesn’t show up in the appropriation bill passed by Congress in December. The list was left out of the final bill.

“Where it went astray was they didn’t keep the list. It just devolved to a single number,” Winchester said. “Whatever wording the National Park Service thought ought to be there went away, and they ended up with a lump sum number for their construction budget.”

That begs the question: Can the National Park Service not spend any of the $159 million in its construction budget this fiscal year because it too lacks authorization due to the absence of the list? Or is Swain’s cash settlement is being held to a double standard?

Olson said the National Park Service doesn’t need specific authorization for the rest of its construction budget. When it comes to the rest of the $154 million construction budget, the passage of the appropriations bill itself counts as authorization even though the list was left out of the final budget bill, Olson said.

“There is no requirement that this list of construction projects be attached to the appropriations bill Congress passes and the President signs before we proceed with the projects,” Olson said.

But as for the $4 million cash settlement contained in that same construction budget? The park service wants Congress to pass specific language saying its OK to pay it out.

Apparently, even though the money was included in the park service construction budget, the park service isn’t willing to consider the cash settlement as “construction.”

Leonard points out that the cash settlement is a substitute for constructing the road itself, and so in a way, it is kind of construction — since it is “in lieu of” construction.

At one point, there was indeed an itemized park service construction list circulated in budget talks. The cash settlement was allegedly on the list. The list was even referenced in budget committee documents as the “go-to” list for what the National Park Service should spend its construction budget on.

“The amount provided will fully fund the NPS construction projects as prioritized by the Service pursuant to the Administration’s revised request list provided to the Committees on June 24, 2011,” according to a draft version of the National Park Service appropriation bill.

Olson didn’t want to talk about what type of authorization the National Park Service needs at this point to fix the situation.

“Those are conversations that happen between a congressman and the National Park Service,” Olson said. “We are not going to use your newspaper as a way to communicate with Swain County.”

However, that’s exactly the question that has stymied everyone working to secure the cash settlement.

“Somebody, somewhere, has to know if there is something missing, what it is,” Winchester said.

Winchester has followed the labyrinthian appropriations process through Congress. He even flew to D.C. in 2010 along with a delegation from Swain County to meet with Ken Salazar, the Secretary of the Department of the Interior, to remind him of the cash settlement promise.

Winchester said it is disappointing to fight so hard, to see the money included in the budget, but to come up empty-handed.


Insult to injury?

The cash settlement was intended to resolve a festering decades-old dispute between Swain County and the federal government over a road flooded during the construction of Fontana Lake back in the 1940s. At the time, the government promised to rebuild the road one day, but never did.

Nearly seven decades later, the government instead promised to make good on its broken promise by paying Swain the cash value of the road that was destroyed — a value pegged at $52 million.

The money was supposed to be appropriated by Congress to the tune of $4 million a year until the obligation was settled. But after an initial down payment of $12.8 million in 2010, Swain hasn’t seen a penny since.

The cash settlement was supposed to make right on the long-standing obligation to Swain County citizens. The federal government signed a memorandum of understanding amid great pomp and circumstance in 2010, a ceremony attended by some 200 people at Swain County High School, pledging to reimburse Swain County for the road.

If it’s authorization the park service wants in order to release the $4 million included in this year’s budget, how about that memorandum of understanding, signed by the Secretary of the Department of Interior Ken Salazar, promising to pay it? Winchester said that ought to be good enough.

“Each individual subsequent appropriation does not require a new additional authorization,” Winchester said. “These joint acts by the federal government and by Congress constitute the authorization, recognition, expectation and plan for future payments, if and when they are appropriated.”

Congressman Shuler has been a champion of the cash settlement. He grew up in Swain County and rode his football stardom there and at nearby Tennessee to his congressional seat in Washington.

Shuler had to lobby for the appropriation on two fronts. He worked closely with the Obama Administration to get the $4 million payment included in the National Park Service budget this year, Mitchell said.

He also had to shepherd the line item through Congress to make sure it remained intact during the budget process.

“Rep. Shuler worked closely with House leadership to ensure the $4 million annual payment the President promised and requested as part of the North Shore Road settlement was fully funded in the 2012 Appropriations bill,” Mitchell said.

Shuler is remaining optimistic.

“Rep. Shuler fully expects the National Park Service to fulfill the President’s request and uphold the federal government’s legally-binding obligation to Swain County by making the payment before the end of this year,” Mitchell said.

Mitchell pointed out that the government signed a “legally-binding” memorandum with Swain County.

Even with an ally in Shuler fighting for the cause, the cash settlement seems to have stalled out almost as soon as it was promised. Shuler is now serving his last year in office, however, having announced this winter he would not seek re-election.

Whether Shuler’s successor will fight with the same vigor for the settlement leaves the future of the payments in even greater limbo.

Shuler’s office says he will impress on whoever comes along after him to carry the torch.

“Our office will fully brief the incoming 11th District representative to ensure they have the information and resources they need to follow in Rep. Shuler’s footsteps and continue his leadership and hard-fought efforts on this front,” Mitchell said.

For now, Swain County leaders haven’t gotten actively involved in hunting down the $4 million that allegedly has their name on it somewhere in the National Park Service budget. Instead, they were counting on Shuler to fight that battle for them.

“The money is in the account ready to go but nobody is willing to sign the check,” Swain County Manager Kevin King said, proffering his version of the cash settlement’s status.

But Swain County commissioners might need to start rattling some cages.

“We might have to at some point in the future,” King said.


What is the North Shore Road?

The so-called “Road to Nowhere” is a source of bitter resentment for the people of Swain County. Before it was flooded, the road traveled for more than 30 miles from Bryson City to Tennessee. The route was dotted with homes, farms, schools, churches, cemeteries and general stores of numerous Appalachian settlements going back generations.

When Fontana dam was built in the 1940s, what wasn’t consumed by the rising water of Fontana Lake was folded into the Great Smoky Mountains National Park. Hundreds of people were forced to leave their homes forever.

The federal government promised in writing at the time to rebuild the road, but after pecking away at a dozen or so miles in the 1950s and 1960s, it was abandon due to the exorbitant costs and environmental hurdles of building the remaining 20 or so miles.

It became a symbol of Washington’s failure to keep promises to rural Appalachia. Swain County, after all, had paid to build the road in the first place — and had to keep paying off the construction debt for years after the road didn’t exist anymore.

A deep-seated distrust and disillusionment set in over the intervening decades.

After a decades-long battle to get it, the first interest payments on Swain County’s North Shore Road settlement are finally starting to trickle in.

Now to figure out what to do with it.

Of the $52 million payout, given to the county by the federal government as a consolation prize for a road that was promised in the 1940s but never built, $12.8 million is already in the bank. There’s another $4 million that’s promised this year — it’s in President Obama’s budget, anyway — although it could be a while until it finally makes its way into the county’s hands.

But after the long and arduous negotiations that led to the settlement, and speculation from all sides over what should be done with the money, there is, as yet, no plan for the interest that’s accruing on the settlement cash that’s already in the bank.

When an agreement was reached last summer, the idea of a steering committee peopled by community members was bandied about, with the intent of directing the county on the best use of the money.  County Manager Kevin King said it’s a concept that has been mentioned in the intervening year by a few commissioners and community members, but no one’s formally proposed it in the commissioners’ twice-monthly meetings, so the cash is still sitting there. No committee has been formed, either.

But, said King, there’s not much money to spend yet, anyway. He estimates the fund will make around $200,000 in interest this fiscal year, which will be paid out at the end of June.

“Of course right now, with the economy, it's not drawing a lot of money,” said King. “It'll take a while to increase to the point at where they could do something with it.”

The funds are held in trust for the county by the North Carolina Department of the Treasurer, with only the interest remitted to the county each year. This year the interest has averaged less than 2 percent.

“If it was making more interest, it would probably be further on the front burner,” said Leonard Winchester.

Winchester is the chair of a group called Citizens for the Economic Future of Swain County, and he’s been instrumental in getting the money secured for the county and wants to see citizen input on how it is spent.

“I am in favor of a committee doing it. It's just that there's not that much interest there to be dealt with and so it's not been a hot topic,” Winchester said.

Commissioner Robert White concurs. He’s one of the commissioners in favor of a citizens group.

“We haven't accrued enough yet, but I assure you what I would love to see would be a citizen committee to look at this particular situation,” said White.

His vision is that the money would be used for special projects in the county, things that could never be done otherwise.

“My vision for that North Shore money is once we get enough accumulated, I want to see things that are going to improve Swain County in whatever manner that it may take. You also really have to look and see about things that could really step the county up another level,” said White.

A small portion of the interest money has already been spent, going to erect five commemorative granite pedestals in front of the county’s administration building, one detailing the North Shore Road saga. The project cost around $20,000, with $7,500 covered by a National Heritage Area grant and the rest of the bill footed by the interest money.

Nothing bigger, however, has been proffered as a potential project.  King said he’s in no hurry to rush a decision on the funds, especially in this economy.

“At this point, we're just trying to let this grow,” said King. “And with the economy like it is, it's almost impossible to bank on any investments right now.”

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