Swain County Manager Tommy Dills at a Sept. 1 commission meeting proposed the county purchase 67 Lakeview Drive, colloquially known as the airport property, for nearly $3 million. No tax increase would be necessary, he said, to finance the transaction. Commissioners appeared unanimously onboard with Dills’ recommendation.
But the chosen route of payment — an installment contract from North Shore settlement fund interest — appears less sound given the fund’s consistently waning spending power and the prior finance officer’s failure to secure a surety bond, both of which could indicate debt servicing that risks the county’s long-term financial stability.
Explaining that “no other property currently available in Swain County offers the same combination of location, relief, size, and accessibility as this property,” Dills said he didn’t opt for a bond issue because $3 million “exceeds the amount that can be prudently raised from currently available appropriations, unappropriated fund balances and non-voted bonds within a two-thirds constitutional limitation.”
He went on to commend the county’s debt management practices.
Recent events and figures, however, might tell a different story. Swain County has met all benchmarks on its most recent annual audits except for fiscal year 2024-2025, when the report wasn’t completed until July 6, 2026, well after the Oct. 31, 2025, deadline. This was marked as a “significant deficiency” in internal control over financial reporting which, while less serious than a material weakness, is, according to the audit, “important enough to merit attention by those charged with governance.”
That said, this tardy delivery was in part because of “early retirement of key audit staff,” a factor outside the control of county officials. Completing GASB No. 101, compensated absences, was cited as a second reason.
Compliance has little to do with another worrying data point within the audit — North Shore settlement status. The $52 million initial balance is restricted, its movement dependent upon two-thirds of voter approval via a ballot referendum.
Former finance officer Cally Elliot, in the fiscal year ending June 30, 2025, moved $5 million in interest that, though unrestricted, carries its own prerequisite.
The N.C. General Assembly in 2019 updated the statute governing the balance, noting that “the State Treasurer shall disburse to Swain County amounts requested by the Swain County Board of Commissioners pursuant to a majority vote of that body.”
County commissioners do not appear to have expressed interest in nor voted on a $5 million transfer. Furthermore, the introduction to the original statute states that the settlement “be preserved and insulated from improvident expenditure.”
The fund’s balance has hovered for years around $52 million but has lost significant purchasing power. Had it kept up with inflation , it would have over $69 million.
Revenue is dependent on non-fixed state treasury interest rates and general fund transfers. Although the county has no control over the former, it dictates the latter.
A 2025-2026 expense and revenue report provided to The Smoky Mountain News in July also tacked on a $5 million transfer. The line item was solely labeled “Transfer from North Shore,” so it’s unclear if this was from the fund’s principal or interest. If a product of the latter, the 2024-25 and 2025-26 reports must have mistakenly documented the same transaction, since by mid-2025, interest accounted for only $656,912. And if what looks like $10 million across two annual budgets was actually $5 million within a single cycle, Swain County’s deficit would be greater than previously anticipated.
The alternative would mean $5 million in principal was transferred without a required referendum.
The table below shows spending and revenue totals from FY 2017-2018, when Swain received the entire principal, and FY 2024-2025, the most recent audit. Since the second $5 million transfer occurred in 2025-2026, only one is listed.
Swain County also has two year-over-year non-general obligation debt requirements — county and school system — with 2025-26 fiscal year principal and interest payments totaling $869,658.87. Because so much money is on the line, county finance officers must obtain true accounting and faithful performance bonds to guarantee ethical behavior and protect government funds. According to UNC School of Government’s Coates and Canons blog, bonds are reviewed on the first Monday in December on an annual basis. Bond amounts range from $50,000 to $1 million, and in Swain County, the finance officer is bonded for the $1 million maximum. Typically, there are several reasons why a surety will decline to issue a bond, most related to risk calculations. Criminal history, credit history and faithfulness to financial office duties are among factors informing this decision. Coates and Canons notes, “If the bond is not properly secured or renewed, the office is considered vacant by operation of law.”
That’s exactly what happened upon the adjournment of an hour-long closed session Sept. 1. Commission Chair Jay Kirkland declared the office vacant and announced the appointment of Karen Dosker as interim finance officer.
The county must submit its plan to buy the airport property to the state’s Local Government Commission for approval. But even LGC authorization doesn’t guarantee a purchase, and its financing, is fiscally prudent.