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When the Med-West venture was coined two years ago, the premise was an easy sell. Together the hospitals would be stronger than going it alone.

Both Harris and Haywood hospitals had witnessed a troubling loss of patients to Mission — a loss so troubling in fact neither hospital could afford to continue as it was. They faced a cold, hard reality: turn the course, and fast, or they would be faced with financial insolvency.

Indeed, both hospitals hoped the MedWest joint venture would shore up the erosion of patients to Mission. Both, however, seemed to have different ideas of how that would play out on the ground.

Was there enough business for both to stay the size they were, or would one ultimately evolve into the big kid on the block under the MedWest umbrella — and if so, who?

Before the merger, and even now, Haywood and Harris competed very little. Fewer than 5 percent of patients from Jackson migrated to neighboring Haywood or vice-versa.

But with the future of their medical community on the line, 1 percent here and there suddenly seemed to matter quite a lot.

While the call by some Jackson doctors to withdraw from MedWest seems like a shot across the bow to their neighbors in Haywood, Jackson doctors said they didn’t intend it that way. They aren’t questioning the quality or caliber of health care at Haywood’s hospital or by Haywood doctors. Instead, it seems desperation amidst a shifting health care landscape has seized the day.

Next week: Read more about the specific concerns raised by Jackson doctors, an analysis of hospital market share, a snap shot of finances, and philosophical view points on the MedWest venture.

 

Four long-time physicians in Jackson County are leaving C.J. Harris hospital after becoming disenchanted with the direction of MedWest — and even more so with Carolinas HealthCare System, a giant network of 34 hospitals that MedWest is affiliated with.

Dr. Bob Adams, a hospitalist who is leaving Harris after 36 years, fears Carolinas plans to build up Haywood as a flagship to compete with Mission. He didn’t like where that would lead.

“Harris devolves and Haywood grows,” Adams postulated. “They are playing the corporate practice of medicine. I don’t want to be a pawn in somebody else’s power struggle and be used as a widget in a big business’ plan for their benefit.”

The president of Harris, Steve Heatherly, laments the loss of the four doctors — and the circumstances.

“It is unusual in the history of this organization to have physicians leave because they were not satisfied with the strategic direction,” Heatherly said.

Making matters worse, another seven doctors in the Jackson-Swain medical community have either already left or plan to leave — for a total loss of 11.

“It is unusual to have that level of turn over,” Heatherly said, even though only four of the 11 actually chalk up their departure to “dissatisfaction with the hospital.”

Lessening the blow somewhat, seven new doctors are moving to Jackson and Swain in coming months. They had already been recruited and were intended to bolster the physician ranks.

Now, however, the hospital will see a net loss instead of gain and a gap in a few key specialties.

Dozens of doctors, of course, aren’t going anywhere.

“We must not forget that we still have an extremely skilled and dedicated medical staff of nearly 230 physicians who are choosing to stay in our communities and work in our hospitals to take care of our patients,” Dr. Robin Matthews, an ob-gyn in Haywood County who chairs the Physician Leadership Council of MedWest.

Many of the 2,000 employees of MedWest have rallied to their hospitals’ defense during the past week.

“The hard decision is to stay here and fight for this place to succeed,” said Dr. Casey Prenger, the medical director of the hospitalist group at Harris. “We believe in our hospital and our community, and it is our privilege and honor to take care of you.”

There are huge challenges, however, facing Heatherly and MedWest: hold MedWest together, turn the corner financially, recapture market share from Mission, quell the doctor uprising, and recruit new doctors to fill the holes.

 

Resolving to make a stand

For the group of Jackson County doctors who went public with their concerns last week, the decision wasn’t an easy one nor was it taken lightly.

“They aren’t trying to hurt anything. They are trying to fix something,” said Dr. Gilbert Robinson, an anesthesiologist at Harris for 10 years.

Even those who spoke out aren’t certain now was the right time, or if it will do any good.

But, the ball was in Adams’ court. When he decided to go public, the core group who had been fighting alongside him during the past year to bring about change internally weren’t going to leave him on a limb by himself, so they reached out and grabbed on as well.

“I decided I wanted to let the community know what was happening to their hospital. The only thing that is going to change is if the community starts standing up for itself to Carolinas and the WestCare board,” said Dr. Waverly Green, a pulmonologist at Harris who is leaving as well.

Adams hopes the issues he raised aren’t construed as a parting shot or chalked up to sour grapes.

“They are portraying those of us who had concerns and discomfort about where we are as being disgruntled and outliers,” Adams said.

But in fact, hospital administration has gone out of its way to praise Adams and the others who are leaving.

“It is regrettable. They will be missed in this community. They are outstanding physicians who have provided years of service to this community,” Heatherly said.

Even doctors in neighboring Haywood, who rightfully have reason to be miffed by Adams’ shot across the bow at MedWest-Haywood, have been complimentary.

“He is a great doctor and wonderful human being. I just happen to disagree with them completely,” said Dr. Marvin Brauer, chief of staff at MedWest-Haywood and a hospitalist like Adams.

While Adams will soon be gone, others who support him will still practice at Harris and will continue carrying the torch to fix perceived problems.

SEE ALSO: Doctors take a stand out of fear for Medwest-Harris' future

Some of them are even on Harris’ payroll. Technically, the entity they are speaking out against writes their paychecks, putting them in an uncomfortable position at best, a vulnerable one at worst. Normally, few doctors would be willing to take a career gamble like that.

The difference at Harris likely comes down to their new president, Steve Heatherly. Heatherly has been with Harris since the 1990s, part of that time as a physician liaison and serving in a variety of vice president roles and as chief operating officer.

In hopes of quelling dissension among Jackson doctors, Heatherly was promoted two months ago as the president of Harris. It gave Jackson doctors one of their own at the helm — rather than the previous hierarchy where they answered to a single CEO for the entire MedWest venture, Mike Poore, who they were acutely aware hailed from Haywood and still had his base office there.

Jackson doctors have hope that Heatherly will help right the ship.

“I believe Steve is at the place he needs to be to help turn WestCare around, due to his experience and background and skill set. I don’t know of anyone else that would be better at this point in time,” said Bob Carpenter, a former MedWest board member from Sylva who resigned in January over the same issues troubling the doctors.

Even Adams agreed.

“I think the WestCare board and Steve Heatherly are doing their best to work with medical staff now,” Adams said.

Many doctors — even those who are in near lockstep with Adams’ pointed assessment of the MedWest landscape — wish he had given Heatherly more time to fix things before going public.

Dr. Randy Savell, a gastroenterologist doctor at Harris, said Heatherly faces a difficult future.

“He is between a rock and a hard place,” Savell said.

Heatherly’s boss is technically Carolinas, and he answers to them daily. But, he must also answer to the hospital board of directors, all the while winning the good graces of nurses and doctors by proving he will address their concerns.

 

The road ahead

Heatherly doesn’t downplay the reality that a hospital lives and dies by its doctors. If the doctors are good, people will get their health care locally.

“That leads to more volume through the hospital, which helps solve the business dilemma,” Heatherly said.

That business dilemma — dire financial straits for both Harris and Haywood — looms large in the debate.

Harris has lost more than 10 percent of its in-patient business to Mission Hospital during the past five years.

As a result, Harris is struggling financially and has been losing money for at least three years. It’s now in its third round of layoffs in four years.

“Our hospitals must confront the fundamental business reality that expenses cannot continue to be greater than revenue,” Heatherly said.

If the financial picture was rosier, the paranoia among Jackson doctors that Carolinas is trying to siphon its patients off to Haywood could simply melt away.

For now, Heatherly is stuck in a Catch 22. Rather than shrink, Harris must find a way to regain the market share lost to Mission.

“No organization can cut its way to prosperity, especially not a hospital, where quality patient care is our business. ‘Thrive-ability’ will happen when more patients come through our doors to see our brilliant doctors and caring staff,” Heatherly said.

Harris’ financial problems are largely because it lost several doctors back in 2006 and 2007, Heatherly said. When patients needed a doctor’s appointment, they were forced to look elsewhere and ended up walking right into the open, waiting arms of Mission in Asheville.

Heatherly, who started at Harris in the 1990s, had taken a hiatus for a few years to work for a physician management firm. When he came back to Harris in ?, job No. 1 was recruiting physicians to fill the void.

“The organization was having trouble recruiting physicians to replenish the supply to the local community, and it created a constrained access,” Heatherly said.

In 2008 and 2009, WestCare brought in 10 new doctors. It also bought out several private practices in order to put existing doctors on the hospital’s payroll — reflective of a national trend by doctors who increasingly prefer to work directly for a hospital rather than run their own private practices.

Those moves came at a financial cost, but Heatherly said the influx of doctors stopped the bleeding of market share. Unfortunately, it hasn’t come back up yet either.

“Now that we’ve had success in rebuilding our medical staff, we need more patients from our local communities using our local hospitals. Only then can we expect more positive financial results,” Heatherly said.

Heatherly’s belief in doctors as a core business strategy for the hospital seems genuine. He stresses it even when discussing other topics, like when the long-awaited renovations to Harris’ emergency room will be re-started.

“As we move forward, we have to assess that we have the right medical staff in place to offer ongoing appropriate access to care, and then those opportunities to evaluate facility expansion will be driven by the ability to generate sustained financial results,” Heatherly said.

Heatherly was speaking off the cuff, not reading from a prepared statement. But, his hospital administrator’s version of Alan Greenspan’s famous Greenspeak can be boiled down this way: doctors must be shored up first, which will bring back patients, which will bring back money.

Large, walk-in beer coolers are ready and waiting to be stocked at Dwight and Jamie Winchester’s Catamount Travel Center, a gas station directly across the street from the entrance to the Cherokee Indian Reservation on U.S. 441.

They’ve been there for eight years in anticipation that one day alcoholic beverages could be sold countywide in Jackson. The day of reckoning has finally come, with Jackson voters poised to decide on countywide alcohol sales in the May primary election.

And the financial stakes for the sale of alcoholic beverages by the Winchesters and others in the Gateway community along U.S. 441 just got a lot higher after Cherokee voters overwhelming decided this month to keep the reservation dry except for the casino.

Winchester’s gas station is literally the first and closest stop for potential beer buyers from Cherokee, literally a stone’s throw from the reservation boundary line.

Winchester is keenly positioned to capture the business of anyone in Cherokee looking for beer, saving them what would otherwise be 15-minute drive west to Bryson City or a bit more than that east to Sylva.

“We don’t have to have beer to be successful,” said Dwight Winchester, gesturing at his bustling store, mid-morning on a workday. “But we do, of course, want it.”

Winchester said there has been a lot of land speculation along U.S. 441 in anticipation of a “yes” vote to alcohol sales. Winchester said that he expects plenty of company in coming days, in the form of other businesses setting up to sell alcoholic beverages, if the vote indeed passes.

The Winchesters currently employee 42 people, and they expect to add two or three more workers if alcohol sales are allowed.

Winchester, though he clearly and unabashedly hopes the referendum does go through, is concerned about perceptions of his business on the nearby Cherokee Reservation when he begins selling alcoholic beverages.

“I have great respect for the folks and the pastors who feel so strongly against it,” said Winchester.

The Bryson City native added that he’s struggling with how exactly to broach the matter with those Cherokee residents who just voted “no” so clearly — more than 66 percent specifically voted against the sale of beer and wine at gas stations and grocery stores — firmly and unequivocally.

“But, the economic increase is going to outweigh any negative you can come up with,” Winchester said.

Winchester said the beer companies clearly believe the sale of alcoholic beverages will pass in Jackson County because they’ve frequently been in his store to discuss the matter. Those sellers’ guesses are as good as any: there’s barely been any discussion of the matter publicly, for or against, in Jackson County since commissioners first decided on the vote last year. That, however, certainly wasn’t the case in Cherokee.

In the weeks leading up to the vote, groups for and against the sale of alcoholic beverages on the reservation were busy mailing out flyers, putting up signs and giving speeches to bolster their cases.

A recent study by Martin and McGill found that the tribe conservatively would have received up to $3.8 million in revenue via an ABC retail store within five years. The tribe’s version of sales tax was projected to pump a total of $1.7 million into Cherokee’s general fund from the addition of alcohol sales.

Winchester’s Catamount Travel Center is a combination gas station and Huddle House. The Winchesters have an identical business in Cullowhee, too, another potential hotspot for the sale of alcoholic beverages with the captive Western Carolina University population. The Gateway business was built in 2004, the one in Cullowhee in 2001. When both were built large beer walk-in coolers were included in each.

To say they are now perfectly positioned to benefit financially from the sale of alcoholic beverages is to indulge somewhat in understatement.

If it passes, Jackson would be one of only three counties in WNC with countywide alcohol sales. Henderson County is holding a referendum on countywide alcohol in May as well.

The majority of voters in Jackson County support countywide alcohol sales, at least according to a Western Carolina University Public Policy Institute/The Smoky Mountain News poll conducted to two years ago. It revealed that 56 percent of registered voters would support legalizing countywide alcohol in Jackson County compared to 39 percent who would be opposed. The poll surveyed nearly 600 registered Jackson County voters.

Jamie Winchester said she is uncertain how quickly the couple’s stores would be able to sell alcohol if the measure passes May 8. She has been undergoing a self-taught crash course in North Carolina alcohol sales to, in part, try to determine just that.

Dwight Winchester said if the vote is “no” that’s OK with the couple, too.

“We’re not going to go anywhere regardless,” he said.

A group of Jackson County doctors say they want out of the two-year-old partnership with the hospital in Haywood County and instead would like to look toward Mission Hospital in Asheville as a future partner.

There have been murmurings for months that Jackson County doctors are dissatisfied with the pseudo-merger with the hospital in neighboring Haywood and might want out. But this week marked the first time a group of doctors went public.

“There is a common element of frustration with day-to-day operations, and concern about the financial viability of the hospitals,” said Bob Adams, the chief hospitalist at MedWest-Harris hospital.

Adams, backed by six other doctors, appeared at the Jackson County commissioners meeting Monday to get his message out.

Though the doctors say they ardently support Harris hospital, they are dissatisfied with the MedWest joint venture that united Haywood Regional, Harris and Swain County hospitals under a single umbrella. At the same time, the new MedWest entity signed on with Carolinas HealthCare, a network of 34 hospitals based in Charlotte.

Many doctors in Jackson and Swain now say that was a mistake — and that they don’t trust Carolinas or their own board of directors.

“MedWest is failing and needs to be dissolved. Carolinas is not an acceptable partner,” Adams said. “Mission is the only partner acceptable to the communities west of Balsam.”

Some doctors in Jackson County believe Harris has not fared well in the MedWest joint venture.

Harris is struggling financially. It has seen an outmigration of patients. Doctors, too, are leaving.

Adams said he is one of eight physicians leaving Jackson and Swain counties in coming months. The community already faces a doctor shortage, a factor partly to blame for the loss of market share in recent years.

Doctors in Jackson County also feel that the Haywood hospital is being groomed to become the flagship of the MedWest venture. They fear patients once cared for locally at Harris will be gradually siphoned to Haywood. They also feel Haywood has gotten a greater share of resources. A long-promised new emergency room remains on the back burner in Jackson — meanwhile Haywood used up MedWest’s borrowing ability by taking out a $10 million line of credit to stem a cash flow shortage.

Whether real or perceived, the Jackson medical community has long prided itself on its reputation and didn’t take kindly to the thought of their beloved local institution declining. That, along with a strong independent streak, has doctors questioning the corporate relationship they now find themselves in as culturally incompatible.

“It is clear to me that the hospital that I joined 10 years ago no longer exists, and is unlikely to rise again from its current ashes,” said Dr. Waverly Green, who is leaving the community in a few months. “I am saddened that it has come to this, and ultimately, I think the community as a whole will be left paying the price.”

Adams and Green both blamed Carolinas HealthCare System as duplicitous in bringing about Harris’ plight.

Adams said he does not trust Carolinas to look out for the interests of their local Jackson County hospital.

They say Carolinas pushed Haywood and Jackson together to advance their own long terms interests — namely to mount a competitive front in WNC against Mission, Adams said

After corralling the trio of hospitals under MedWest, Carolinas then began setting the stage for Haywood to be the lead player with Harris and Swain in supporting roles.

“Carolinas wants everything to funnel past us to Haywood and stop them from going to Mission,” Green said.

“It was Haywood-centric all along,” agreed Bob Carpenter, a former board member for WestCare and MedWest.

Carpenter resigned in a show of solidarity with the medical community.

In particular, though, Carpenter believed the board had not been given ample time to consider signing off on $10 million loan documents that encumber the entire MedWest venture for money borrowed by Haywood. Carpenter said board members were called into an emergency meeting in January and asked to sign documents they had not even had a chance to read.

“They said we had to do it to save the MedWest system,” Carpenter said.

Haywood allegedly didn’t have the funds to make payroll and needed the credit immediately.

The Jackson County medical community appealed to the management of MedWest and Carolinas as well as the hospital board of directors several times during the past six months to no avail.

“I realized we were being shut out,” Green said.

Adams has worked at Harris for 36 years and does not take lightly the decision to come forward with his views.

“Some people thought it may do more harm than good and may be more destructive,” Adams said. “A group of the physicians believe the information needs to be made public and our whole intent is to allow the community to make a decision to look further into what is going on and make their own decisions.”

One thing is for certain. Whichever of two Democrats Jackson County voters pick in the May 8 primary will be bringing a lot of governmental experience to the table in their bid for a seat on the Board of Commissioners. Stacy Buchanan is a former commissioner and board chairman; Vicki Greene recently retired as assistant director for Southwestern Commission. They are running for the seat currently held by Joe Cowan, who decided not to seek re-election.

The two might face competition in the general election, despite no candidates formally signing up to run during the official filing period. Local builder Cliff Gregg, who plans to run as an unaffiliated candidate, has until June to collect the signatures of 4 percent, or roughly 1,400 names, of Jackson County voters. If Gregg succeeds, he will compete with whichever Democrat clears the primary hurdle.

 

Vicki Greene, 61, retired assistant director Southwestern Commission

Greene has one son and noted that it’s important to some people in Jackson County that she’s Maude Bryson’s daughter. Her mother worked at the old A&P grocery store, Greene said, and functioned “as a one-woman Chamber of Commerce.” Greene attended the University of North Carolina at Greensboro as a Reynolds Scholar. She holds a master’s in public administration program from UNC, a certificate in county administration from the School of Government at UNC and has taken a variety of courses in economic development and financing.

Where do you stand on land-use planning?

Greene said that she favors land-use planning and that she spoke in favor of and still supports Jackson County’s mountain hillside ordinance and its subdivision regulations.

“The board is looking at fine-tuning the subdivision regulations as far as having a hierarchy of standards for roads based on the number of lots in a development,” she said. “And, I think that’s a positive thing to do.”

Greene said she believes the conservative-dominated board is appropriately responding by evaluating the existing regulations. She emphasized her belief in the need to continue planning efforts in the Whittier and Cashiers areas and said she also thinks that the county needs to become directly involved in community planning in the Cullowhee area. Cullowhee, she pointed out, is the fastest-growing township in Jackson County, growth that most believe will increase more rapidly if an alcohol referendum passes during the primary.

“It would be an exciting time to have an entity such as the county to take a leadership role in developing a plan,” Greene said.

What are your plans for economic development?

“I think Jackson County has been unique in southwestern North Carolina in terms of having no or an ineffective economic development effort,” Greene said.

Jackson County’s economic development commission came under fire and was ultimately dissolved, during her opponent’s tenure on the board amid questions about $1.2 million in unpaid business loans and generally questionable lending practices. The economic development arm back then was an independent body outside the county’s direct control.

Greene said that Jackson County needed to follow the lead of neighboring counties like Haywood and Macon and hire an experienced economic development director.

“A lot boils down to having a director with the connections who can put Jackson County at the forefront” for when the recession ends, Greene said, adding that the county needs to work on a comprehensive strategy that considers health care, training, tourism and building the necessary infrastructure.

She’s running because…

“I have a commitment to make this the best possible Jackson County that it can be,” Greene said.

Greene noted that she has served for more than three decades as a technical resource for local governments on retreats, grant applications, workforce development funding and more.

“I’ve worked with Democrat and Republican boards for 36 years and have developed strong lines of communications with them all,” Greene said, adding that Mountain Mediations one year named her peacemaker of the year.

 

Stacy Buchanan, 49, district vice president America’s Home Place

Buchanan is married and has two children. He has a bachelor’s in business administration, two associate’s degrees in personnel administration and recreation administration, a master’s in public administration and certification in business and marketing education. He is an Air Force veteran who taught in the Jackson County Schools and who served from 1998-2005 on the Board of Commissioners, including as chairman. Buchanan resigned in the middle of his term in March 2005. Buchanan, at the time, cited his acceptance of a position as assistant head football coach and co-offensive coordinator at Smoky Mountain High School and an inability to split time between his school and public service career.

Where do you stand on land-use planning?

“I’m very much pro-land planning,” Buchanan said. “I support the ordinances we have in place, and I’m glad to see those were adopted.”

He said he does not oppose the revisiting of those ordinances now taking place under the new Board of Commissioners.

“I’m never opposed to seeing change; they constantly need to be updated,” Buchanan said. “You need to see the impacts they had positive or negative, and whether you need to tweak them. I see tweaking as making the language easier to understand and easier to follow.”

Buchanan said tweaking does not, in his book, mean diluting or watering down the ordinances, however.

“We need to protect the beautiful natural resources that God has given us. We need to be good stewards of the land,” he said.

What are your plans for economic development?

Buchanan noted he’d been part of developing a 15-year strategic plan for Jackson County that emphasized facility development. He said that he’d take the same approach to economic development and help construct a 15-year plan “that people will buy into” to guide the county’s efforts.

“I don’t think we’re being proactive enough going after companies that are looking to come back to the U.S. that went overseas,” Buchanan said, adding that Jackson needs to understand and market its assets. “We need to be able to ask these companies, ‘Why not Jackson County?’ I’ll match Jackson County up with any county.”

Buchanan was board chairman when a brouhaha erupted that ultimately resulted in the county’s economic development commission being dissolved, partly because of lack of results. At the time, the economic development arm was not under the county’s direct oversight or accountability. Just weeks before resigning, Buchanan called for a “restructuring” of that board, which had run afoul of commissioners amid questions about unpaid business loans and generally questionable lending practices.

“I believe in an EDC but not the way that we had it,” he said, advocating for a “paid professional” with a proven track record to head economic development efforts for Jackson County. And that professional, Buchanan said, needs to be “backed up by a board with experience.”

He’s running because…

Buchanan emphasized again that he believes Jackson County needs to develop a strategic plan for the next 15 years, and he said that he’s the man who can help the county reach that goal.

“To know where you’re going you’ve got to understand where you’ve been,” Buchanan said, pointing to the facilities plan developed under his prior tenure as where he’s been. “It’s coming to fruition now,” he said, adding that the facilities plan laid a critical groundwork for Jackson County’s economic future.

“Now we need a plan going forward so that we don’t miss opportunities,” Buchanan said.

With its obvious Cuban influences — the combination of guava and cream cheese, or even mango and cream cheese  — Mindy’s Bakery in Sylva is clearly not your typical mountain bakery.

But that’s not all that sets this small bakery apart: the five family members directly involved have graduated from or are currently enrolled at Western Carolina University. This family, who lives in Waynesville, is literally working its way through school one pastry at a time.

Raul and Mindy Guillama are the patriarch and matriarch of this family. They have three sons, Raul, Andre and Sebastian, who jumpstarted the family’s WCU train.

Andre and Sebastian have both graduated from WCU with degrees in construction management and finance, respectively. Young Raul is getting a degree in marketing, his father is getting an accounting degree and his mother is getting one in psychology.

“The three of us were going, and they said ‘we have a lot of free time so we might as well go to school, too,’” young Raul said.

“And accounting is something you can use in any business,” his father added. “I can do my own accounting and taxes.”

Seventy-year-old Raul is an engineer by training.

“I’m doing my share of contributing to the social security working force,” Raul said, only partly in jest.

Mindy, 50, the mother, explained that both she and her husband were born in Cuba. She came to America on the first Freedom Flight from Cuba to Miami that brought exiles to this country. Her husband was already in America as a young student when Fidel Castro took over. His family joined him in the U.S. in flight from the ensuing oppression.

“He has a brother-in-law whose father was killed in his arms,” Mindy said. “We are a family that came to this country because we had to — it was either communism or freedom.”

That said, the family loves America and what it has given them in return, Mindy said. The Guillama family ended up in Western North Carolina about eight years ago following years of vacationing in this region.

These days, they live together, work together and go to school together.

Husband and wife are taking a psychology class together. Raul the older and Raul the younger are in calculus together. They both said that each is doing equally well, and they choose to sit side by side in the class.

Baking is in the family blood. Their daughter, Mindy, who lives in New York, is also a baker and worked with them in the past.

Mindy’s Bakery specializes in wedding and special occasion cakes, as well as tropical desserts such as flan, coconut cakes, and the Cuban “pastelito” pastries.

“I got the éclairs and took them to work one day and everybody just loved them,” said customer Diane Winstead who was at the bakery one morning this week picking up another order of éclairs for an office party. “It just all looks so fresh.”

A task force studying whether Jackson County should revamp its approach to luring tourists began laying the groundwork last week to merge its two separate tourism agencies into one.

In coming months, the task force will wrestle with the best make-up and structure for a single countywide tourism development authority, which will control roughly $440,000 generated by a 3-percent tax on overnight lodging.

Jackson County currently has one tourism agency representing the Cashiers area and one tourism agency representing Jackson County as a whole. Supporters of that concept have argued Cashiers needs its own tourism agency — with control of its own dollars — to cater to its own unique tourism needs. Opponents have argued that having two groups is a waste of money and resources and is less effective.

Clifford Meads, manager of High Hampton Inn in Cashiers, suggested a makeup for the new entity that guarantees Cashiers a nearly equal number of seats on the board.

Meads tendered a proposal calling for an 11-member board, with five seats designated for tourism representatives from the Cashiers area. Specifically, he suggested six representatives from lodging businesses, three of which would hail from Cashiers; one tourism-related business representative from Cashiers and one from Sylva; one chamber of commerce representative from Cashiers and one from Sylva; plus a county commissioner designee. A chair would be selected from within the group.

The proposal received nods of general agreement from other task force members, though the exact makeup is clearly a long way from being decided.

Robert Jumper, manager of Travel and Tourism for Cherokee and chairman of the Jackson County Travel and Tourism Authority, emphasized that he believes it critically important that the chamber directors be on the future tourism development authority board, too. They currently serve on the Cashiers and Jackson County boards that are in existence.

“From my perspective, I saw a huge value in having the executive directors there to give us the staff perspective,” Jumper said. “In some capacity there needs to be that input.”

For now, Jackson County most likely will temporarily merge its two tourism agencies into one. There is a sense of urgency following revelations that Jackson County is out of compliance with a state law mandating that a single entity oversee room tax expenditures. Moving forward with a temporary merger for now will give county leaders until next year to hammer out the specific makeup of a permanent, future tourism development authority for the county, County Commission Chairman Jack Debnam said.

While a task force comprised primarily of lodging owners has been appointed to make recommendations, county commissioners ultimately have the final say. A vote on combining the two tourism boards into an interim tourism development authority is likely to take place at the county commissioners’ meeting Monday.

Attorney Jay Coward said, like Debnam, he believed that the county needed to come into compliance with state law quickly and continue hammering out actual details about the new board.

“I think what y’all are doing is exactly what you ought to be doing,” he assured task force members in their discussions at last week’s meeting.

 

Look to the east?

Having to balance competing geographic interests isn’t unique to Jackson County. Haywood County, for example, had an ongoing tug of war over tourism dollars between Waynesville and Maggie Valley for years. To resolve these differences, the tourism board there was expanded from nine to 12 members about four years ago.

The board is representative of various geographic areas in the county.

Additionally, a portion of tourism tax dollars are earmarked to individual communities to spend as they see fit, yet another effort aimed at ending the tug of war and turf battles over the room tax money. Of the county’s 4 percent room tax, 1 percent is earmarked for special tourism initiatives in the different geographic areas of the county.

The special pot of money is divvied up among the county’s five “zip code” communities based on where it was collected, said Lynn Collins, executive director of the Haywood County Tourism Development Authority. The TDA collects and administers the money, but each community has a subcommittee that accepts and review applications for dollars. The subcommittees make recommendations to the full TDA, which pretty much rubberstamps them, Collins said

“It seems to be working well,” she said, adding that the communities have “flexibility” to spend on things they feel are important and can pinpoint “what’s most needed as is related to tourism. It’s kind of like a grant program,” Collins said in explanation.

Meads said he believes the mandate for a single tourism development authority could be a good thing for Jackson County because “it forces us to come to agreement” on various tourism-related issues.

“We can craft something for ourselves” and not be “pigeon-holed” with another county’s format, Meads added.

As in Haywood County, composition of the new board in Jackson County will be key.

 

How we got here from there

Jackson County for months has been struggling to sort out how best to spend its room tax dollars, and how to best balance competing geographic interests in the county.

Jackson County currently has one tourism agency representing the Cashiers area and one tourism agency representing Jackson County as a whole. The members oversee the annual 3 percent room tax money collected from the lodging industry. The amount isn’t small potatoes: each year about $440,000 is collected, which is pumped back in to tourism promotion.

Seventy-five percent of the room tax generated in the Cashiers area currently goes back to that community’s tourism group to spend on its own marketing. Supporters of that concept have argued Cashiers needs its own tourism agency — with control of its own dollars — to cater to its own unique tourism needs. Opponents have argued that having two groups is a waste of money and resources.

Whether to merge the county’s two tourism groups into a single countywide entity has been a source of ongoing controversy since last year. The debate essentially ended earlier this month, however, when the county discovered that its current structure doesn’t comply with state law.

The county, by seeking an increase in its room tax rate from 3 to 6 percent last year from the General Assembly, triggered the mandate to form a single tourism development authority. The state has sought uniformity in how tourism boards operate, a requirement that is imposed whenever counties come to the state seeking a tax increase as Jackson did.

Two months after the domestic violence agency REACH of Jackson County abruptly shut its doors in February, services to domestic violence victims continue to be handled by nonprofits in neighboring counties.

Jackson County commissioners would like to see a local entity fill that void and are likely to begin reviewing their options soon, with a discussion of the issue slated for a county meeting next week.

REACH of Jackson County’s board of directors shut down the agency in February amid questions of financial solvency and internal financial irregularities. REACH failed to remit payroll taxes for three quarters in 2011 to the Internal Revenue Services. Additionally, the organization was hemorrhaging financially. The board of directors fired the agency’s executive director and finance officer, and the seven remaining employees were laidoff.

Commissioner Doug Cody said that he believes Jackson County must move toward having its own agency in place to combat domestic violence and help victims.

“I think we do need a local entity that does what REACH did for us,” Cody said. “Macon County is taking up the slack right now. It’s unfortunate things worked out the way they did.”

Commissioner Mark Jones echoed Cody, calling the demise of REACH a “great disappointment,” and said that he, too, wants something in place soon on a local level.

“I think it is very important,” Jones said. “Our population is too large not to have a facility for servicing victims in immediate need.”

Commission Chairman Jack Debnam said the situation with REACH serves as a warning to people who serve on volunteer boards that they need to be cognizant of what’s happening with the respective agencies. That said, he’s looking toward another agency in Jackson County, too, to help victims of domestic violence.

“I’d like to see REACH back in Jackson County,” Debnam said. “Eventually we’re going to have to set something up. I think it needs a little different structure than last time.”

All calls are currently being handled by REACH of Macon County, which has been provided office space in the Jackson County Department of Social Services building. Ann VanHarlingen, executive director of REACH of Macon County, said there has been a continuity of services. The group is even offering life-skills classes and programming in Jackson County.

“It’s going to take some time for Jackson County (to decide what to do),” she said. “It’s up to the community to see how they want the work to go forward.”

VanHarlingen said starting a new agency up takes 18 months to two years on average, according to state statistics.

State grant funding previously earmarked for REACH of Jackson County has now been made available to REACH of Macon County, said Jackson County Manager Chuck Wooten. Since that agency is now providing the services to domestic violence victims, they can receive the funding previously allocated to REACH of Jackson, Wooten explained.

The root of the financial problems for REACH of Jackson County date to 2001 when REACH opened a $1.1-million transitional-housing complex for victims trying to escape abuse. The complex was a questionable financial venture from the get-go: The nine-apartment village could not actually generate the funds to pay the loans, much less keep pace with general repairs and upkeep. The loan amount owed was $840,074.

The REACH village went into foreclosure. Recently control of that housing complex shifted to Mountain Projects, a nonprofit that administers programs to benefit the needy and elderly in Haywood and Jackson counties.

The state is forcing Jackson County’s hand when it comes to forming a single entity to oversee how tourism tax dollars are spent.

Jackson County has two tourism agencies — one representing the Cashiers area and one for Jackson County as a whole — that oversee room tax money collected by the lodging industry. Whether to merge the two into a single countywide entity has been a source of controversy since last year, prompting the formation of a task force to study the issue.

That may be for naught, however, since the county recently learned its current structure is out of compliance with state law.

It seems the county inadvertently triggered the mandate when it sought an increase in its room tax rate from 3 to 6 percent last year. Doing so required a special bill in the General Assembly. That same bill also required Jackson County to form a single tourism development authority.

While the county has held off on enacting the room tax hike, the county nonetheless was obliged to follow through on changing the structure of its tourism boards, according to County Attorney Jay Coward.

Cashiers tourism leaders have resisted attempts to do away with their separate tourism arm, which gets 75 percent of the room tax generated in the Cashiers area to spend on its own marketing. They argue that Cashiers needs its own tourism agency — with its own funding stream — to cater to its own unique visitor demographic apart from the county as a whole.

Those who supported a merger believe it would be more effective, eliminating the duplication and competition that currently exists between the two entities and putting the money to wiser use under a single tourism strategy.

It would seem the argument is now moot.

County Commissioner Mark Jones, who represents the Cashiers area and voted against the original proposal, said he does not believe the community will resist a unified Tourism Development Authority after all.

“But it’s going to depend on what the state recommends and what the makeup would be,” Jones said. “(There must be) a fair representation from all over the county.”

A county-appointed advisory group made up primarily of lodging owners has been meeting every two weeks to discuss this very issue. Jones said they are within two meetings or so of returning to commissioners with recommendations about the formation of a new group.

“There’s no template,” Jones said about statewide tourism efforts. “We thought we’d find something out there to serve as a good template to guide us, but it’s not out there.”

Instead, Jones said, each county in North Carolina more or less creates how to best manage tourism-generated tax dollars.

That is precisely why the legislation triggered the formation of a new unified tourism board: the state has sought uniformity in how tourism boards operate, a requirement that is imposed whenever counties come to the state seeking a tax increase.

“I hope you don’t mind some friendly constructive criticism of the bill,” Coward wrote Trina Griffin this week, a staff attorney for the N.C. General Assembly. “I understand that the plan is to legislate on a case-by-case basis a consistent statewide system of tourism promotion. The obvious suggestion for a change to save other counties and towns from being confused by future bills would be to pass one statewide law.”

Coward, as of late Tuesday, had not received a reply from the state.

David Huskins, who heads a consulting group that is helping Jackson County develop an economic development plan and who’s worked with them on this issue, said there’s no question Jackson County must put a single tourism development authority in place.

Huskins said Asheville and Buncombe County were the first in the state to seek occupancy tax legislation from the state. By the mid 1980s, the trend of enacting a room tax had pushed into the western end of North Carolina. But oversight in some cases was loose because of the varying structures of different tourism boards overseeing the money that was raised.

“Over the years, some of the local governments were diverting funds outside of tourism – the tax was originally conceived for tourism promotion and marketing. But, a lot of local governments were saying if they needed a new ambulance, well tourists get hurt, too, and we have to provide services for them,” Huskins said.

That interpretation diluted the intent of the room tax — namely to provide a stream of revenue to further tourism — and created such an outcry from the tourism industry, the General Assembly by the mid 1990s moved to set up uniform guidelines.

“If you want an increase, you come under the new guidelines,” Huskins said flatly.

Commissioners did not decide on when exactly to form their new tourism development authority. Chairman Jack Debnam indicated a required public hearing could be held as soon as the April 16 meeting. The advisory committee meets this Thursday. Coward is expected to detail more of his findings regarding the state legislation.

Historically, ballot measures on alcohol sales in Western North Carolina have been bitterly fought affairs, with pro and con forces battling it out publicly via billboards, church pulpits and through newspaper and radio advertising.

But, that’s not been the case in Jackson County, where voters go to the polls next month to decide on whether to allow countywide alcohol sales. If the referendum passes, Jackson would be one of only three counties in Western North Carolina with countywide alcohol sales, joining Buncombe and Clay. Henderson County is also holding a referendum on the issue in May.

In Jackson County both sides — if there are actually two sides — look set to head to the polls next month with nary a shot fired for or against the important vote.

“I think it’s a reflection of a different era and a different time,” said the Rev. Rich Peoples of Grace Community Church in Sylva.

Peoples said he believes that “churches frankly are fairly conflicted” on the issue. Most in this day and age, the preacher said, opt to leave the decisions about whether to drink alcoholic beverages — in moderation — to individual church members. And, the same is true concerning decisions about whether to vote for alcohol sales countywide, too, Peoples said.

 

Clear majority?

The majority of voters in Jackson County support countywide alcohol sales, according to a Western Carolina University Public Policy Institute/The Smoky Mountain News poll conducted to two years ago. It revealed that 56 percent of registered voters would support legalizing countywide alcohol in Jackson County compared to 39 percent who would be opposed. The poll surveyed nearly 600 registered Jackson County voters.

“My guess is that people want economic development and that people are concerned that it will help businesses thrive,” said Becky Kornegay, a Jackson County resident who works in Western Carolina University’s Hunter Library.

Like Peoples, Kornegay attributed the lack of obvious opposition to “it being just a different time — surely that battle already has been fought. You can buy beer now in Sylva.”

Gibbs Knotts, interim dean of Western Carolina University’s department of political science and public affairs, also pointed to the economy as one driving force for why there seems to be little to no public opposition.

“There may be concern about the positive economic impact” of a yes vote to the alcohol referendum, Knotts said, saying the lingering recession might have created more favor for the potential boost in tax revenues that widespread alcohol sales promise.

Knotts also pointed to Clay County as a possible bellwether of change to WNC’s traditionally fierce no-alcohol stance. Clay is one of the region’s smallest and most rural counties. Residents there in 2009 voted to allow alcohol sales countywide.

There is a possible wildcard in the May primary: Amendment One is also on the ballot. Knotts said that could skew the vote one way or another, depending on which camp — pro-same sex marriages or against-same sex marriages — succeeds in galvanizing voters. That’s presuming, of course, that those in favor of same sex marriages would be more liberal and therefore would vote in favor of countywide alcohol sales.

 

Some worry

Not everybody is pointblank in favor of countywide alcohol sales in Jackson County, however. Cullowhee business owner Robin Lang said she has heard opposition and added that she has mixed feelings about voting “yes” herself. That’s because, Lang said, she’s concerned there’s no overseeing body such as a planning board in Cullowhee to shepherd in the commercial growth that likely would follow such a vote.

While Cullowhee is not an official town, as home to WCU and the large student population, it is already Jackson County’s largest and fastest-growing community. Cullowhee grew 47 percent between 2000 and 2010, according to the latest U.S. Census. Cullowhee alone accounted for almost 24 percent of Jackson County’s total population of 40,271 people, despite lacking official town status and having no tangible business district.

Former Chancellor John Bardo floated a novel idea in 2010 to try to bring alcohol to the community. Bardo approached the tiny town of Forest Hills next door to WCU and suggested it legalize alcohol sales and then annex the university and its surrounds into its town limits — possibly opening the door for bar-like establishments that seem part and parcel of a vibrant college atmosphere. That idea has dissipated with Bardo’s retirement last July and with the very real prospect of countywide sales by referendum vote.

“There are people a little afraid of the alcohol vote,” Lang said, however, counting herself among that number. “There is a bigger picture. I was originally for it, but I’m more confused now about which way to vote.”

Whittier and the Gateway area of Jackson, which serves as an entrance to the Cherokee Indian Reservation, is the other community most likely to experience growth if alcohol sales are voted in countywide. Mark Rose, owner of GSM Thrift and Gift is all for the economic boost he believes alcohol sales would bring. His business is located between two service stations; Rose said customers looking for beer are turned away every day.

“People stop here for beer and we have to send them on back up the road to Sylva,” he said. “I tell them, go to Exit 81. That man at Exit 81 must be rich. All our tax dollars go there, and we need to try to keep them here. Everybody is struggling for money.”

 

Alcohol exceptions

While Jackson County is dry, alcohol sales have been permitted in Sylva in some form since 1967. Most recently, Sylva voters approved the sale of mixed drinks in restaurants in 2006, giving it the full compliment of beer, wine and liquor sales, whether in restaurants or to take home. Dillsboro has allowed the purchase beer and wine only in restaurants since 2005.

In Cashiers, numerous loopholes in the state ABC law allow several bars and clubs there to legally sell alcoholic beverages in ostensibly “dry” Jackson County, either by qualifying as a “members-only” club or a sports club if its has an on-site golf course or tennis courts.

There’s no clear winner in a complex and multifarious new system for ranking roads projects when it comes to the ongoing debate over Sylva’s main commercial drag.

In just-release road rankings, redesigning N.C. 107 out ranked the competing proposal to build a new highway bypass around it — but just barely.

The two dueling projects — redesigning N.C. 107 versus building a bypass to divert traffic from it — ranked second and third on a wish list of road building projects for the six western-most counties, with 45 and 44 points respectively.

The near tie means controversy is bound to continue over the best way to address perceived congestion on Sylva’s thoroughfare.

The two projects are neck and neck in the ranking process, despite a strong message by local leaders that they overwhelming prefer to rework N.C. 107. A regional transportation committee comprised of leaders from the six western counties got to weigh in on the road ranking — and in doing so awarded reworking N.C. 107 the maximum number of points it could.

By contrast, the regional leaders awarded zero points to the concept of a bypass around N.C. 107.

The bypass was catapulted forward anyway, however, thanks to heavily weighted points injected into the ranking process by the N.C. Department of Transportation.

Sarah Graham, a transportation planner and community liaison for the Southwestern Planning Commission, sees the ranking process as a success for public input, even though the preference of local leaders was nearly outstripped by DOT’s own rankings.

“The conversation we have going on now is of improvements to the current road, compared to a few years ago when the conversation going on was whether or not we wanted a (bypass),” Graham said. “The community said we want to see what it would take to improve 107 before you build a new 107.”

Indeed, community input got the idea of reworking N.C. 107 put on the list in the first place, and then advanced it forward.

But, some Jackson County leaders are discouraged that their input into the ranking process, which showed a clear preference for reworking N.C. 107 over a bypass, got watered down after the state DOT was done with the list.

“It is frustrating to see that a project the county planning board and the county commissioners ranked very low to score so highly on the statewide ranking,” said Gerald Green, Jackson County planner. “It made the time the county commissioners and planning board put into reviewing the projects and ranking them seem to be wasted and it felt as though our input was given much consideration.”

 

Point jockeying

The road rankings were done under a new system launched last year that is supposed to be objective and data-driven. The DOT awards its points based on several predefined variables. The old process was considered subjective, determined in part simply by the preferences of politically appointed DOT board members.

Gov. Beverly Perdue ushered in the new system, as one of many state government reforms aimed at transparency and ending political corruption.

“It is a scientific approach that would remove so much of the politics involved in funding transportation and try to infuse the process with more science and more local input,” Graham said.

The ranking process can be a bit daunting to the novice, however.

The final list is a mish-mash of rankings by local leaders, the local DOT office and state DOT planners. Each has its own system for awarding points. Points are also weighted, so the points awarded by the state DOT office count for a greater share of the total than those awarded by local leaders.

The system is still relatively new, but local leaders on the regional transportation committee have already figured out a way to game the system and try make their points count more.

Since the DOT’s block of points are weighted more heavily, input by local leaders can only carry a project so far. The regional committee is given a block of 1,300 point to divvy up among its favorite road projects, with the caveat that it can’t award more than 100 of the points to a single project.

Last year, the regional transportation committee carefully spread their allotted bank of points among a long list of road projects, splitting hairs over how many points each project should get out of the total 1,300 they had to work with.

Their balancing act ended up being for naught once the DOT added its points to the mix, however. The preferences of local leaders were watered down once the DOT plunked its more valuable points into the mix.

So this year, the local leaders on the regional transportation task force decided to game the system. Instead of spreading their allotted points around to lots of different projects, they dedicated all their points to a handful of top projects and gave zero to the rest.

In the end, they got more bang for their points.

“They realized you have to work together to get your projects moved up the ladder,” Graham said. “They said, ‘let’s give 100 points, the most we can give, to our top projects and start pushing them up faster.’ If we are going to be given some say, we want it to mean the most.”

Graham said the transportation planning committees across the state have caught on to the strategy as well.

Convoluted? Perhaps.

But, public input actually had an influence in the state’s road project rankings, so Graham sees it as a success.

“If we had not put improvements to 107 on the list and given it 100 points, it would not have been on there at all,” Graham said.

The rankings are all well and good, but the question ultimately is which ones will get money.

“We don’t really know how much money is going to be applied,” said Joel Setzer, head of the DOT for the 10 western counties. “What everybody wants to know is what is going to get worked on. We don’t know that yet.”

Technically, building a bypass is further along in the planning process than reworking N.C. 107. The alternative of reworking N.C. 107 emerged only a few years ago, while the idea of a bypass dates back two decades and has been inching ahead, albeit slowly.

“It is already in the development stage,” Setzer said.

But, “there is very little work being done on it,” he added.

Now, it is unclear whether that work should be halted, and the money put toward reworking N.C. 107 instead.

“We can’t hopscotch around the priority list,” Setzer said. “Because of the rankings, we can’t continue to work on the planning of the 107 (bypass) without addressing this potential project to widen existing 107 because widening existing 107 ranked higher.”

 

Devil in the details

While Setzer refers to the project as “widening” 107, that’s not what local leaders who requested the project would call it. They want traffic flow improved, but in their book, that doesn’t necessarily mean a carte blanche widening.

In fact, that highlights a source of contention between the community and DOT over what exactly a “reworked” N.C. 107 would look like.

DOT did a cursory plan for reworking N.C. 107 that calls for wider lanes, more lanes, bigger intersections and medians. The new footprint would be so wide it would take out nearly every business lining the commercial thoroughfare.

Local leaders and the business community believed there had to be another option for reworking 107, however.

“They didn’t like what the DOT suggested,” Graham said. “They said we don’t want the study defined for us. We don’t like the way it was defined for us.”

So a task force of town and county leaders, along with local business owners, hopes to come up with a more tenable solution. It has been meeting for a few months.

“There wasn’t really a clear vision of what had to be done with 107,” said Chris Matheson, a Sylva town board member and business owner. “There’s a lot more to consider than how to get from the light at 107 to the high school quicker. We are finding out just how complicated it is.”

Opinions on the committee vary on the extent of the congestion — which will ultimately frame out much of a “fix” the road needs.

Randy Hooper, owner of Bryson’s Farm Supply, doesn’t think traffic is that bad judging by his own commute.

“I can leave here in the afternoon and be home in 15 minutes. Twenty years ago, I could do the same thing,” said Hooper. “It takes no longer to get back and forth to work now as it did 20 years ago.”

The goal of the task force is to speak with one voice on what the community wants a “reworked” 107 to look like.

“We need our community leaders to be backing a single vision. We hope the corridor study will create the community consensus so as we move this project up the funding ladder we can say, ‘This is our vision. Help us fund it,’” Graham said.

Setzer agreed consensus is currently lacking.

“We are polarized right now on what we think we need to do, as a community,” Setzer said.

Page 59 of 106

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