K-4 school on hold due to economy

Due to the national economic downturn the Macon County commissioners have decided not to fund the construction of a new $15 million K-4 school at this time.

County Manager Jack Horton said it appears there is no way the county can incur that level of debt without imposing a property tax increase, which, he said, is out of the question during hard times.

Horton acknowledged that the county has not abandoned the idea of building the school but has simply put it on hold.

The commissioners made the decision on Saturday while reviewing budget figures during their annual retreat.

The new K-4 school was proposed to relieve overcrowding at Cowee, Iotla and Cullasaja schools.

Now that the new school is on hold, “We’ll just carry on as we are now,” said Macon County Schools Director of Auxiliary Services Terry Bell.

Bell didn’t argue with the commissioners’ decision.

“They are in a position better than I to know the current conditions,” Bell said. “If they looked at everything and decided it wasn’t in the best interest, who am I to disagree with them?”

The school being put on hold is not unexpected, said Bell.

“That doesn’t come as a great surprise,” Bell said.

Bell said he wasn’t aware that the commissioners had decided to put the school on hold until The Smoky Mountain News contacted him.

“I have received no official notification on it yet,” said Bell.

Superintendent Dan Brigman was at an orientation in Raleigh with the new school board members on Monday, Bell said. Bell said he planned to meet with Brigman on Wednesday.

The county has already spent about $900,000 on the new school for architectural and engineering plans. County commissioners hope they won’t have to spend more money on architecture and engineering once the school construction does go forward.

Macon County is facing an almost $1.4 million budget shortfall this fiscal year because of the recession.

County commissioners discussed an array of budget cuts to keep the county in the black during their annual retreat at Southwestern Community College’s Macon campus Saturday.

The county’s finance department came up with a list of possible budget cuts, but the recommendations only totaled $583,264, still leaving an $815,336 shortfall. That left the county commissioners with a lot of tough choices to make about where to come up with the rest of the cuts.

The commissioners directed the county manager and finance office to return to the drawing board to find more cuts.

None of the cuts so far include layoffs or salary reductions. But County Commissioner Bob Simpson said if the county can’t find other areas to cut, it could mean layoffs.

Scaling back employee hours is a second resort to meeting the shortfall, as is pulling money out of the county’s reserves. And a third resort is across-the-board-cuts to all county departments including the school system.

Commissioner Brian McClellan said he does not think layoffs will be necessary to cover the remaining shortfall. Dipping into the county’s reserves to cover the shortfall is also a bad idea, said McClellan, adding that if the coming year is equally bad it will be good to have that savings in place.

To avoid layoffs, Commissioner Jim Davis said he would favor cutting retirement benefits, teacher supplements and pay raises. But he doesn’t think those moves will be necessary this year. However, for the coming budget year starting in July, “Everything will be on the table,” Davis said.

Postponing the remodeling of the old library for a new senior center and putting emergency medical services in the current senior center could be delayed to save funds. The project is expected to cost around $878,000.

But the commissioners said the project is crucial to help the senior center and EMS, and decided to move it forward.

Ideally, county commissioners could trim $1.4 million from the county’s budget without altering the level of service to citizens, County Commission Chairman Ronnie Beale said. But whether such a goal is realistic remains to be seen.

Commissioner Bobby Kuppers suggested that each department head be given an opportunity to suggest ways to cut their budgets by 2 percent, rather than the commissioners deciding for them.

The county also has about $245,000 in contingency funds built into the budget every year that could possibly be used to cover the shortfall. Beale said contingency funds are set aside in case projects go over budget.

Less revenue

The $1.4 million projected shortfall primarily comes from the county collecting less in taxes and fees. Building permit fees are down because construction is down.

The county is bracing for a $100,000 shortfall in sales tax revenue, and the interest on the county’s investments will likely be $350,000 less than expected.

Putting the shortfall in perspective, County Manager Jack Horton said it isn’t that bad given the county has a $47 million budget.

Construction in the county was down significantly in 2008. Typically the county adds about $150 million to $200 million to its property tax base through new construction, but in 2008 it only added about $100 million, according to Horton.

Fewer vehicles being purchased is also hurting the county’s sales tax collections and personal property taxes.

Horton said the state is facing a $3 billion shortfall, putting it in a far worse situation than Macon County.

However, Horton cautioned that when the state gets in a bind it passes some expenses down to the counties.

The county also has a lot of debt to pay down. It has to pay for $4.3 million in debt this fiscal year; $5.1 million in 2009-2010; $4.9 million for 2010-2011; and $4.8 million in 2011-2012.

It appears a piece of property in Nantahala had something to do with Macon County pulling out of a fight against Duke Energy over the utility’s hydroelectric dams.

Macon County wants to renew a lease on the land — which is owned by Duke but used by the county for a recreation complex — but the fight over Duke re-licensing its dams was putting the two at odds in lease negotiations.

County Commissioner Bob Simpson said it is possible that Duke may have refused to lease the land if Macon County didn’t back down.

Now that the county has withdrawn from the fight, Duke may be “more amenable” to leasing the land, Macon County Commissioner Jim Davis said.

“We prefer to work in partnership with Duke rather than be in an adversarial role,” Davis said.

Macon County had joined forces with Jackson County and the town of Franklin several years ago in challenging Duke’s quest for new federal permits for a host of profitable hydroelectric dams. Duke is required to cough up environmental and recreational benefits in exchange for operating the dams, but many felt the region was getting shortchanged by Duke.

In the suit, Macon County was attempting to get “a lot of money” from Duke in return for the company using local rivers to generate electricity, according to Davis. Some think Macon County should have remained in the fight to get more money out of Duke.

It appears the land lease did, in fact, have something to do with the county withdrawing from the fight. According to the minutes from the Oct. 13 commissioners meeting, County Manager Jack Horton alluded that it may be best to withdraw from the fight since the county was negotiating renewing the lease.

The minutes state: “The manager advised the board they should consider if it is in the best interest of the county to continue with the intervention or withdraw. He added in the meantime this issue is putting the county at odds with the power company when it comes to negotiating property and extending leases for recreation purposes, i.e., Nantahala Recreation Park. The manager recommended the board study this situation before the Nov. 10 meeting.”

Horton could not be reached for comment as he was out of the office last week and Monday (Jan. 5).

Davis said Duke did not promise the county a good deal on a lease in return for withdrawing from the fight. Nor did Duke threaten to deny a lease if the county remained at odds.

“There was no quid pro quo on that issue,” said Davis.

For more than 20 years Duke has leased the property to the county, but the current lease is expired. The county continues to use the property anyway.

Duke and the county are in the process of negotiating a lease renewal.

Simpson said the county is considering building a gymnasium on the site but first wants a long-term lease in place to ensure the land will be available.

“We can’t do anything without a long-term lease,” Simpson said.

Duke Business Relations Manager Fred Alexander of Franklin said with Macon County withdrawn from the lawsuit it makes negotiating a lot easier.

In a statement about Macon County withdrawing from the fight Alexander said, “We certainly believe Macon made a good decision to get out of re-licensing at this stage.”

However, Alexander said he has “no doubt” that a lease agreement would still be worked out if the county were still in the fight.

Alexander added that the county and Duke are currently working on a “revised draft” of the lease agreement.

Davis said the county also dropped out of the suit because it didn’t look likely that it would win.

Alexander agreed that the Federal Energy Regulatory Commission turned down “every single request” Macon County made.

Is compensation due Macon County?

Some, like Franklin Town Alderman Verlin Curtis, think Macon County should be compensated in return for Duke utilizing the county’s waterways to generate millions of dollars worth of electricity.

Duke realizes “great profits” off using Macon County’s waterways and should pay the county back for their use, Curtis said.

If the county would have stayed in the lawsuit, it could have gotten Lake Emory dredged at Duke’s expense as well as received bank restoration along the Little Tennessee River, Curtis said.

Now Macon County “stands to get nothing,” said Curtis.

“Look at what Duke has done for the area — nothing,” said Curtis. “Look what they’ve taken.”

Alexander said Duke does not owe Macon County anything. Those who feel Duke is indebted to Macon County for using the waterways are “completely misinformed over the nature of re-licensing,” Alexander said.

He said the water Duke uses in Macon County is owned by the state and that residents have benefited from Duke providing “lower cost electricity.”

Some have been misinformed into believing that when a utility is re-licensed that it means there is a “pot of gold” available for the taking. He said this belief could have come from other utilities giving away large sums of money when they re-licensed.

For example, Progress Energy ponies up $325,000 a year for a single dam on the Pigeon River in Haywood County, with the money managed by the Pigeon River Trust Fund. The dam there isn’t nearly the size of the one at Nantahala Lake in Macon County.

Also, Alcoa, a Tennessee power company, agreed to provide an environmental trust fund of $125,000 annually as mitigation for four dams — Cheoah and Santeetlah lakes in North Carolina and two lakes in Tennessee. Like the Pigeon River Fund, Alcoa’s payments are doled out by a board comprised of community members. The fund is in addition to a 5,000-acre conservation easement.

But Alexander said Duke did not want to hand out cash for a “small group” to spend as it wanted years later, but would rather go ahead and fix certain issues.

Duke has proposed a host of small perks for Macon County, like adding more campsites, lighting, parking, a toilet and a handicap-accessible pier at Nantahala Lake. Also on the list are a wildlife-viewing platform and boat launches. The biggest ticket item, however, is $40,000 for water and soil conservation, but it can only be spent on “Duke approved initiatives.”

Macon County didn’t get everything it wanted. The county had asked for $700,000 upfront, then an annual payment based on how much electricity Duke generated off its hydro operations within the county. Macon also sought payments of $150,000 annually for sediment and erosion control initiatives — rather than a single payment of $40,000 as Duke has proposed.

Jackson County, Franklin continue the fight

Jackson County and Franklin are continuing in the fight against Duke’ re-licensing despite the fact that rulings have consistently been in favor of Duke.

Currently Jackson County and Franklin are awaiting the rescheduling of an administrative hearing in the case. That hearing will take place in Jackson County District Court.

Some, like Jackson County Commissioner Tom Massie, advocate Jackson County throw in the towel and stop spending money on legal fees. Jackson County is fighting Duke to prevent demolition of the Dillsboro dam and also hopes to get monetary payments from Duke.

By Jennifer Garlesky • Staff Writer

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As Macon County officials move forward with plans to build two new schools, community schools in Cowee, Iotla and Cullasaja could close their doors forever.

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Macon County residents will have the opportunity to weigh in on amendments to the county’s flood damage prevention and watershed ordinances at a public hearing on Feb. 11.

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Macon County welcomed its new County Manger Jack Horton back to Western North Carolina earlier this month. Horton, 57, returned to Macon County to fill the county manager position after the retirement of former manager Sam Greenwood. This is Horton’s second stint in the Macon County manager’ seat, having held the same job from 1985-1991. In a recent interview with The Smoky Mountain News, Horton discussed some of the issues the county is facing.

Smoky Mountain News: What’s it like to be back in this part of Western North Carolina?

Horton: It’s great to be back in Western North Carolina. This is probably — of all the places you could live in the world — the most beautiful place that I know of. And that’s just the scenery. The people here are great too. Over the past almost 30 years that I’ve worked in public administration most of it comes from the western part of the state.

SMN: Macon County has changed a lot since you were here last. One of the big issues the county is dealing with is growth?

Horton: Macon County has changed a lot. The population has grown and a lot of people have moved in here to retire or to raise their families, and the population continues to grow. I think what we will see in Macon County probably will be somewhat of an example of what lies in store for all of Western North Carolina when it comes to growth and natural resources.

SMN: County commissioners have begun talking about finding a second water supply for the county? How do you feel about this issue?

Horton: One of the things that we really have to have and that is getting more and more precious everyday is a good, clean, stable water supply. I think we are going to see over the next 20 years that water is going to be critical, and if you are going to have any type of growth, development or a sustainable economy, you’ve got to have a good water supply. It’s critical not only for the economy but also for environmental reasons.

We’ve been blessed in this part of the state for a long time with an abundance of pure and natural water. We have so much available property around here and a good watershed area I think some of the leaders of the past have been very visionary in their efforts to create and maintain water supplies. One of the projects that people point to on this topic is the water project in Waynesville that happened in the 1970s. That has really paid dividends, and I think that every municipality in this region — and throughout the state, for that matter — has got to take a look at their water supply and how they are going to meet the needs of their county and to meet the needs of their economy.

SMN: Macon County just formed an occupancy tax committee to redistribute the county’s lodging tax. The committee members are eager for you to come on board and are looking forward to your ideas. How do you see the county allocating its occupancy tax?

Horton: I was in Macon County when the occupancy tax was instituted back in the late 1980s, and at that time it was decided that the best way to administer that money was to promote travel and tourism through the Greater Franklin Area and the Highlands Chamber of Commerce because they had two different types of clientele that they were trying to reach through travel and tourism.

I haven’t seen the report or talked to anyone yet that has been on the committee about the changes in the occupancy tax and the creation of a TDA. I can’t really comment on it because I don’t know anything about it.

But I am familiar with the TDA. We had a TDA in Haywood County. In Caldwell County the chamber of commerce partnered with the economic and development commission and promoted tourism and travel. I’ve seen chambers of commerce handle the occupancy tax, I’ve seen TDA’s handle the occupancy tax and I’ve seen a combination of both, so I don’t have any predisposed position on it. I’d like to see what the folks here have to say about it.

SMN: The failure of the school bond referendum was very disappointing for the board of commissioners. How do you see the county financing projects like the 5-6 and k-4 schools?

Horton: The bond referendum for the schools was an opportunity to finance the school improvements through a bond issue. The board of county commissioners and the board of education have made the commitment toward new school facilities. We are looking at ways to finance these projects since the bond referendum failed. The need still exists for new school facilities. I think the county is continuing on with its commitment to fund the schools and I think the first action towards that goal is the acquisition of that property for the new 5-6 school. I anticipate that we will be working on ways to figure out a method of financing the school through alternative methods and try to maintain a reasonably low tax rate at the same time.

I think that’s one of the things most people are concerned with — what is it going to do to my property taxes? We’ll evaluate all those things and move forward with it. Macon County is not a large county but it’s a fairly prosperous county and the general consensus is that the county should be able to fund the critical needs of its schools.

SMN: There is some speculation that there may be an increase in property taxes in order to pay off the debt the county is incurring from the capital improvement projects?

Horton: There are several factors when you talk about property taxes. The county has got the lowest tax rate in the entire state right now — 24.5 cents per hundred dollars. The tax rate is extremely low and the reason it’s extremely low is that there’s been a lot of investment in the county. Real estate prices have risen because a lot of people want to live here and buy property.

The last re-evaluation saw that the county-wide tax base increase by 60 percent, and so the tax rate went down. I think that the board committed to having a revenue neutral tax base, and if we can hold that line I think we can certainly try and do it. You can affect the amount of taxing coming in by raising the tax rate or growing the tax base, and obviously the best choice is increasing the tax base. We’ll have to take a look and see if the tax base will increase enough to pay any debt service on schools before we look at increasing the tax rate.

SMN: Macon County has been in the forefront with confronting the mental health crisis. How do you see the county addressing this issue?

Horton: The state’s decision to reorganize mental health has created a lot of problems in this region that did not exist before. One of the primary issues is how to deal with people that are an involuntary commitment. It used to be that if somebody was committed involuntarily, they were evaluated and taken to a mental health center and within a few hours they were placed in some place or released. But the problem now is that the two- to three-hour wait has become a one- to two-day wait and is tying up law enforcement officers from all seven counties. The problem is that we don’t have enough population to justify getting the private sector involved to provide services for all the mental health needs.

Since the reorganization of mental health, it has taken away a lot of that provision of mental health services and we are hurting for enough professionals to deal with mental health issues in the region.

I think Macon County is really taking a lead to develop a local task force to try and address all the issues affecting mental health. I would expect that the task force — appointed at the Jan. 14 commissioner meeting — will come up with some really good recommendations.

SMN: What issues do you see the county addressing this year?

Horton: I guess it’s going to be the same issues that been facing them the last several years — the growth, the need for educational facilities, some land-use controls in order to preserve the environment and the quality of life. Also look at water, infrastructure and the transportation system — there is a myriad of issues that need to be addressed. I hope to not only look at this year’s plan of work, but maybe we can develop a plan of things we’d like to address over the next five years and work toward those because you have to take the time and put it on paper and commit it to a plan, otherwise people just talk about it and nothing ever gets done.

I think our focus has got to be on the future, on how we are going to be in the next 15 to 20 years. Our goal is to position Macon County to be a leader in the region in addressing these issues. We are going to concentrate on the future. We are going to address all those issues, and we are going to set up a work plan for this year and the next five years and hopefully look on down the road as far as we can to make sure that when we eventually leave that things are better than when we got here.

SMN: Commissioners have talked about forming a better relationship between the county and its municipalities? How do you feel about this issue?

Horton: I think we need to be transparent to the public eye. My goal is to be responsive to the public and to the media so that we get good information out. In order to do that the board has made a commitment to establish a good working relationship with municipalities in the county. That will be a top goal of mine, to work with Franklin and Highlands. We all serve the same people. Everybody in Highlands and Franklin are also in Macon County. Whatever happens inside city limits also affects those outside city limits, so we got to have a good working relationship with our municipal partners.

By Jennifer Garlesky • Staff Writer

After investigating the actions of the Macon County School Board for the past two months, officials at the North Carolina State Board of Elections have determined that the school district violated two campaign finance statutes.

By Jennifer Garlesky • Staff Writer

For more than 60 years, students have been learning at Cowee Elementary School. But with the rise in Macon County’s student population, county leaders are looking to build a new school to accommodate the county’s sudden influx of pupils.

A Franklin-based mining company has filed an appeal against the North Carolina Department of Environmental and Natural Resources decision denying a permit to operate a rock quarry in the Tuckasegee community in Jackson County.