Swain auditor warns that drastic measures needed

An auditor for Swain County had a clear-cut message to pass on to commissioners this week: make drastic cutbacks in expenditures or hike property taxes.

“There’s nothing left,” Auditor Eric Bowman told commissioners at their meeting Monday (Oct. 5). “We can’t have another year like this year. I realize that’s not good news, but that’s just the reality of the situation.”

Bowman’s official summary states that the county should “strongly consider” a property tax increase. Swain has one of the lowest property tax rates in the region. The findings are a result of Bowman’s audit of Swain County’s budget for the 2008-2009 fiscal year, which ended June 30.

County Manager Kevin King would not comment on the budget crisis following the meeting. However, in an article last month, King said there would be no problem in turning the situation around.

“It is not as dire as everybody is painting,” King said then.

Bowman singled out the sheriff’s department and the health department in his report to the commissioners, recommending more oversight for both.

The health department is two months behind in billing Medicaid for nursing care provided to home-bound seniors, delaying reimbursements the county is due for the services being provided under the program.

Meanwhile, food costs at the jail escalated dramatically by 49 percent for no apparent reason. Bowman said he was unable to determine why there was such a jump in the cost of food, especially at a time when jail revenues fell sharply.

In fact, the jail faced some of the biggest drops in revenue, as did sales tax and construction-related inspection fees.

Bowman also alerted the commissioners that there was a misuse of the county credit card in the sheriff’s department for “several personal type items.”

Cut costs, don’t raise taxes

Despite Bowman’s recommendation, Commissioners Steve Moon and David Monteith said they would not support an increase in property taxes.

“We cannot continue to overspend,” said Moon. “We can take care of it by cutting expenses. Nobody wants to raise taxes.”

Moon agreed with the auditor that there must be better oversight and said pointing out the sheriff’s department’s role in increasing county expenses was “very, very relevant.” Moon added that elected officials are “not always qualified” and sometimes “spend way too much.” The position of sheriff is elected and carries no specific qualifications or resume other than approval by voters.

“Vote for him again, see what happens,” said Moon.

Sheriff Curtis Cochran could not be reached for comment.

Meanwhile, Monteith said there was no need to increase taxes to make up for the budget shortfall.

“I think we need to tighten our belt real tight,” said Monteith. “I will, under no circumstance, increase taxes. We don’t have to.”

Monteith said the loss in jail revenues was inextricably tied to neighboring counties that once paid Swain to house their overflow inmates — building jails of their own. In addition, Swain had made money housing federal inmates but those are now being sent to Buncombe County rather than Swain.

Monteith showed sympathy to the sheriff, stating that he “inherited” a jail that was bigger than necessary. Commissioners made the decision to overbuild the jail in hopes of housing inmates for neighboring counties prior to Cochran taking office. According to Monteith, the county should now explore what else could be done with that space to bring in some extra dollars.

The county has already cut half a million from its budget this year over last year. The county froze overtime and cut eight jobs: five in the sheriff’s office and jail and three from other departments. The cost saving measures went into effect with passage of the new budget July 1.

Realizing that wouldn’t be enough, however, commissioners last month announced a five-day furlough without pay for the county’s nearly 200 employees, netting $100,000 in savings. Another $100,000 came out of a capital reserve account used for school maintenance and construction.

Where the money went

Even though county revenues fell by $479,000, Swain spent $1.3 million more in 2008-2009 than the prior year, with the biggest increases racked up in the Sheriff’s department, the jail, and debt payments primarily related to the jail.

Some of the jail expenses dealt with a rise in food costs, but there was also additional staff approved by commissioners to operate the large jail.

The County’s total general fund balance decreased from $4.3 million to $2.8 million, while its unreserved general fund balance dropped drastically from 17.3 percent in 2008 to 6.6 percent last year.

The Local Government Commission recommends counties maintain a cushion of 8 percent of their annual budget — enough to cover one month’s operating expenses. Since Swain falls below that benchmark, the N.C. Department of Revenue will oversee the county’s budget until the situation is corrected.

King had said the county had to make up $1 million to get over the LGC fund balance mandate.

In working toward that goal, Bowman recommends reviewing food menus at the jail, handing over control of certain funds from the sheriff to the county finance director, and requiring two people, rather than just the jailer, to handle inmates’ money.

He also emphasized the need for all department heads to be educated on cutting costs.

Vida Cody, Swain County’s finance officer, said she was already working with Sheriff Curtis Cochran to cut expenses. According to Cody, Cochran has someone else handle meal purchases for the jail. Some of the other expenses in that department dealt with vehicle maintenance, an expense Cody said couldn’t be helped.

Cody said she also plans to meet with the health department’s finance personnel in the near future.

Despite no one directly raising any suspicion of a possible mishandling of county funds, Cody emphasized repeatedly that she follows county money closely, inviting the public to look at finance records to see for themselves.

“We watch every invoice that comes through,” Cody said.

Meanwhile, Mike Clampitt, chairman of the Swain County Republican party, criticized the county for imposing mandatory furloughs on county employees.

Rather than revolving furloughs, the county plans to shut down on certain days, one of them being Dec. 31. Clampitt challenged that choice since many people pay taxes and file property information with the register of deeds that day before year’s end.

“December is the worst month in hell to take somebody’s pay whether you’re rich or poor,” said Clampitt. “Most people celebrate Christmas with family and friends. They like to have a meal. It’s the only time of the year they get together.”

Clampitt said he could count on one hand the number of commissioner’s meetings he’s missed and could see clearly where the problem with the budget lay.

“You spent money hand over first for the last three years,” said Clampitt. “There’s no two ways about it.”

Amid tough times, DSS director denied raise

After much deliberation, Swain County commissioners voted 3-2 against an $8,800 pay raise for the Department of Social Services director in the face of a severe budget shortfall.

Director Tammy Cagle asked for the raise to be compensated for additional work she must now undertake to create a child support enforcement division for the county. The state shut down regional offices that formerly handled child support enforcement due to its own budget woes.

“It’s going to be a hardship,” said Cagle. “I have to learn the whole program myself because we have never had child support in our office.”

A plan for the program must be in place in 28 counties across the state, including in Swain, Macon, and Cherokee counties, by Jan. 1.

Cagle and County Manager Kevin King agreed that it would be cheaper to do the work in-house rather than contract it out.

The county would eventually have to hire two employees to handle the new division. Each one would have 66 percent of their salaries funded by the federal government, and incentive programs would make it possible to break even on the program, King said.

King also pointed out that it would cost Cherokee County at least $300,000 to hire three workers, and it would cost Swain a minimum of $100,000.

While Cagle argued she cut back about $51,000 from her own department, some commissioners remained unconvinced about approving a pay raise.

Commisssioner David Monteith, who voted against the motion, said tough times sometimes call for sacrifice by employees.

“I mean no disrespect,” said Monteith. “But sometimes you just gotta work harder to get the job done.”

Commisssioner Genevieve Lindsay voted for the pay raise, stating that this was not part of Cagle’s job. “This would be a new job,” sad Lindsay.

Chairman Glenn Jones made a motion to raise Cagle’s salary by $4,400 but no one seconded the motion.

“It’s hard times. This is something extra she’s got to do,” said Jones. “We’ve got to get some kind of compensation for her job.”

Commissioner Steve Moon supported the pay raise, stating Cagle went out of her way to save money for the county, “not like some other departments in the county.”

Whether they were for or against the pay hike, commissioners uniformly commended Cagle on doing a commendable job.

“This lady deserves this, but I cannot justify it when we’ve laid off people,” said Monteith.

Graham and Swain part ways over Deal’s Gap debate

Graham County delivered yet another jolt to the three-month debate over who should provide emergency services to Deal’s Gap, a motorcycle mecca in a satellite portion of Swain County that sees serious wrecks each year.

Graham commissioners voted 3-2 at its latest meeting to stop providing rescue and law enforcement to the Swain County territory starting Jan 1. Graham routinely handled all emergency calls to the remote area as a favor to Swain, but grew tired of providing the service and demanded $80,000 annually from Swain as compensation. Swain refused, however, prompting Graham’s surprise move to end services.

“The negotiations just don’t seem to be going anywhere,” said Graham County Commissioner Steve Odom. “They need to realize that that is their county. If they are genuinely concerned, they’re going to have to get out their checkbook. We can’t continue to do it for nothing.”

Since Swain doesn’t seem eager to pay up, Odom suggests that a part of the $195,000 Swain gets in property taxes from Deal’s Gap be used to set up an EMS substation to ensure quick response times once Swain has to take over the calls. It currently takes Swain from 45-50 minutes to reach the Deal’s Gap area.

At Monday’s county commissioner’s meeting, Swain County Manager Kevin King said the cost of installing such a substation in Deal’s Gap would be “astronomical” considering that there are only 34 homes and businesses in the area. The emergency calls to the area, however, stem from hordes of tourists riding sports cars and motorcycles on the famed twisty roads in the region known as the Hellbender and Tail of the Dragon.

One possible solution is to expedite the setup of a proposed substation in the western part of Swain County, which would cut response times to Deal’s Gap to 35-40 minutes. King said Blount County in Tennessee has comparable response times to similar wrecks on the other side of the state border near Deal’s Gap.

Glenn Jones, chairman of the Swain County Board of Commissioners, said while that response times may not be the best at first, the county would “iron the kinks out” in time.

At the same meeting, Graham County also voted unanimously to end trash pickup services for Deal’s Gap, breaking a $21,000 annual contract with Swain County. While Graham claimed the service actually costs close to $36,000, Jones said he doubts the bill will go over a third of the original $21,000.

Swain County had contracted that service out to Graham since its garbage trucks pass by the Deal’s Gap area anyway. But King said he will now look at how Swain County can take over the garbage pickup services itself.


Swain’s position

Swain continues to point out that it responds to calls in the Graham County portion of the Tsali Recreation Area, a popular area for mountain bikers, and provides ambulance transport for Graham residents who end up in Swain’s hospital — both of which balance out Graham’s assistance in Deal’s Gap, Swain claims.

Another unanimous vote from Graham at its last meeting, however, resolved to take over the transport of its residents from Swain County Hospital to other area hospitals.

Meanwhile, Swain County plans to continue providing services in the Tsali area.

During the negotiations, Swain had offered to station an ambulance in Deal’s Gap during heavy traffic weekends and give Graham a discount to house any overflow prisoners in the Swain jail, offering to charge $40 instead of $50 per day. The offer was somewhat self-serving, as Swain would like to lure Graham to house prisoners in its new jail, which is struggling financially.

Odom said Graham County is still open to hearing other offers from Swain before the year’s end.

While Swain County Commissioners have not voted yet on a resolution on Deal’s Gap, no one brought up the idea of renegotiating with Graham at the latest meeting.

“It’s kind of like we’re beating a dead horse,” said Jones. “I think they know and we know, we don’t have $80,000.”

Swain at last makes foray into animal control

Swain County Manager Kevin King has an ambitious idea for finally addressing the years-old issue of animal control, or lack thereof, in the county.

King would like to set aside some money to hire an animal control officer to handle the most serious calls and to possibly share a new facility for animal control with PAWS, a nonprofit that runs a no-kill shelter in Bryson City.

“We get a call at least three or four times a week concerning animal issues,” said King at Monday’s Swain County Commissioners meeting.

The county currently has no animal shelter other than the nonprofit PAWS, which is perpetually full. It also has no animal control officer to collect strays. The county had contracted with a private agency to make weekly rounds through the county to pick up strays, but the $20,000 arrangement was terminated.

Although the county is cash-strapped, King said the county could spare $10,000 for a 10-hour a week in-house position.

For now the lack of any attempt by the county to provide animal control has left PAWS to shoulder the entire burden of stray animals, overwhelming the small nonprofit shelter that relies solely on donations.

King said he has explored a diverse slew of options and is recommending a joint venture with PAWS to run an animal shelter. PAWS could house an adoption center on one side with county animal control on the other. King estimates that it would take at least $100,000 to get everything off the ground on the new facility. Although King has searched high and low for two years to find grants to fund the project, he said they simply are not out there.

King emphasized that the county should get moving on the animal control issue since the matter has been left in its hands indefinitely.

County Commissioner Phil Carson agreed with King.

“We have to start somewhere,” Carson said.

While the county has no leash law, people who meet up with a vicious dog outside the owner’s property can address a letter to Linda White, health director for Swain County. If White deems the animal potentially dangerous, it must be confined or kept on a leash and muzzled when taken outside. White said she makes routine visits to these dog owners’ households just to make sure that the guidelines are being followed. She also administers rabies vaccinations every time there’s a bite or a complaint.

“There’s a lot of dangerous dogs in Swain County,” White said. “It’s a very time-consuming effort.”

King suggested the new animal control officer could report to a seven-member board that would include the sheriff, the health director, a veterinarian, and others. The commissioners have asked King to keep refining the plan and report back to them at the next meeting.

Swain makes cuts to plug million dollar shortfall

The recession has finally caught up with Swain County.

While other counties began bracing for declining revenues in late 2008, Swain County has only just begun to tackle a $1 million shortfall eating its way through the county budget. Swain County is working to plug the hole, but failure to take action sooner has caused the county’s fund balance to dip below the state’s benchmark for sound fiscal footing.

The Local Government Commission recommends counties maintain a cushion of 8 percent of their annual budget — essentially one month’s operating expenses to guard against a cash flow crisis. Swain County has dipped to less than 7 percent, however, according to preliminary audit figures for the 2008-2009 fiscal year ending June 30.

This will trigger budget oversight by the N.C. Department of Revenue until the situation is corrected.

County Manager Kevin King said the county has already figured out how to make up the shortfall and implemented a plan.

“In my opinion, there is not going to be any problem in turning this thing around,” King said. “It is not as dire as everybody is painting.”

King said he wasn’t oblivious to the mounting shortfall and has known since the spring that the county would dip below the 8 percent benchmark.

“We looked at doing furloughs in February and decided not to,” King said. “At that time the economy was getting ready to turn around, or so they said.”

Commissioners were reluctant to cut pay for county employees, who haven’t seen a raise in three years, he said.

“We just didn’t feel like we wanted to do a furlough to employees. They wanted to wait it out and see what would actually happen,” King said.

King emphasized that the county is not facing a deficit. It is merely a matter of its savings account being too low.

“It means you have less cash flow,” King said.


Root cause

King points to several factors playing into the shortfall, blaming the sheriff’s office and jail as the primary culprits (see related article).

Property tax collections were down by about $195,000 over last year, as the recession made it more difficult for residents to pay their tax bills.

Another cause of the shortfall is a convoluted state formula that swapped out the county’s Medicaid costs for sales tax revenue. The state agreed two years ago to take the burden of Medicaid off the county, but along with it, the state would keep some of the sales tax revenue that previously went to counties. While Swain will eventually be better off divesting itself of Medicaid even if it means losing a sliver of sales tax revenue in exchange, the switch was only partially phased in this year and the result was a net loss to the budget.

“There are all kinds of weird things in that formula,” King said. “We didn’t come out on the good side of it.”


Making up the difference

The county has already cut half a million from its budget compared to the previous fiscal year. The cost saving measures went into effect with passage of the new budget July 1.

The county cut eight jobs: five in the sheriff’s office and jail and three from other departments. The county also froze overtime.

With half a million in savings already penciled in, that leaves another half million the county needs to come up with. King recommended a five-day furlough without pay for the county’s nearly 200 employees, netting $100,000 in savings. County government will shut down on Oct. 30, Nov. 10, Dec. 23, Dec. 31 and Jan. 19. Offices that can’t simply shut down for a whole day will work out the furloughs amongst the staff. Emergency workers who can’t take off at all will simply see a pay cut. The sheriff’s office is exempt and will see neither furloughs nor pay cuts.

King is going to take another $100,000 out of a capital reserve account used for school maintenance and construction. The reserve account has accumulated a surplus, thanks to a little being squirreled away every year to pay for future school construction.

In a lucky break, the county will be getting an extra $150,000 in taxes this year from Tennessee Valley Authority for Fontana Dam, which King factored in to help cover the shortfall.

That still leaves $150,000 to finish plugging the hole. King doesn’t have a specific plan to get there other than across-the-board penny pinching.

“We are basically going to stop spending as much as possible,” King said. A hiring freeze on vacant positions is also in effect.


Day late and dollar short

Other counties anticipated fallout from the recession and began taking steps much sooner.

In Haywood County, leaders implemented a hiring freeze in the late summer of 2008. By fall, department heads were asked to trim 1 percent off the top of their budgets. By spring, department heads were searching for a 7 percent cut, a move that spawned furloughs and 36-hour work weeks. Haywood County also cut all contributions to nonprofits over the winter, a suspension in funding that has continued into the current fiscal year. Finally, the county increased property taxes and permanently eliminated 35 positions, many of which were already vacant due to attrition, however.

In Macon County, leaders began grappling with a projected $1.4 million budget shortfall over the winter as well. County commissioners put the onus on department heads to trim their own budgets in hopes of avoiding cuts to employees. A hiring freeze was enacted, but the lion’s share of savings came from suspending purchases and delaying maintenance.

Sheriff, Swain point fingers over budget shortfall

The on-going tension between Swain County commissioners and the sheriff has surfaced yet again, this time over the root cause of the county’s $1 million budget shortfall.

“If it hadn’t been for the expenditures of the sheriff’s office we would have been pretty much been alright,” County Manager Kevin King said.

King cited excessive overtime and several additional positions added to the sheriff’s office over the past year as driving up costs by several hundred thousand dollars over above the budgeted amount.

Sheriff Curtis Cochran said the county is using his department as a scapegoat.

“It looks to me like the budget shortfall is poor management on the part of county administration,” Cochran said. “They need to look in the mirror and see where the problem lies. They are the watchdogs of the budget.”

The county spent $160,000 last year on overtime for jailers and deputies. Overtime was racked up every pay period thanks to a shift schedule that gave jailers and deputies 20 hours overtime each two-week pay period. They worked 60 hours one week and 24 the next, with overtime paid out whenever they went over 40 hours in a seven-day period.

King said the problem has now been solved by switching the overtime rules effective this month. Overtime pay now kicks in only after deputies and jailers accrue 86 hours over a two-week pay period. The alternative system for paying — or rather not paying — overtime is allowed under Department of Labor rules for law enforcement workers who often have longer shifts clustered together for several days in a row but then get several days off, King said.

King said he met with jailers and deputies to explain the new method for calculating their pay. He said they don’t like the new arrangement.

King said Cochran used the overtime formula to pay his people more, an end run in essence around salaries he thought were too low for his workers, King said.

Cochran admits without the regular overtime “Their paychecks are going to go down drastically.”

“They just barely make enough money to live anyway. They were dependent on some of this overtime to help them survive,” Cochran said. Some are getting second jobs, dropping health insurance coverage and even seeking food stamps and Medicaid.

But Cochran said eking out more pay for his people wasn’t his motive when implementing the schedule. He said it was part of a move from 8-hour to 12-hour shifts, which are more common in law enforcement, and to rotate who works weekend instead of it always being the same people.

“When we implemented this I wasn’t aware they had to pay the overtime like they say they had to,” Cochran said. “When you are looking for someone to blame they will pick someone to blame.”

King said overtime was only part of the budget problems emanating from the sheriff’s office. Revenue at the jail fell short of expectations. County leaders opened a big a new jail last year that was overbuilt in hopes of housing more prisoners from out of the county for a nightly fee. But the number of inmates housed from outside the county declined, however, shattering the county’s hopes of subsidizing the overly large debt payments.

King has blamed Cochran, but Cochran said it is out of his control. The jail project was started before Cochran took office. The county undertook an oversized jail despite neighboring counties that once regularly housed inmates in Swain building new jails of their own and decreasing the need to rent out bed space.

In addition, the county added several new positions to the sheriff’s office and jail over the past year. The extra jailers were needed to man the larger facility, or so everyone thought.

“The county commissioners approved every bit of this,” Cochran said. “They had to approve all the expenditures for the jail. They are the watchdogs of the budget. I don’t have the check book up here to write checks.”

King said the county should have cut some of the extra jailers when it became clear the jail wasn’t filling up and the extra jailers weren’t needed. Instead of cutting the positions, the extra jailers were made deputies and kept on the payroll.

“That was probably a mistake,” King said. “We didn’t have the money to keep them.”

But King said the commissioners were sensitive to accusations from the public that they weren’t treating Cochran fairly.

“They didn’t want to be perceived as doing anything political,” King said. King said they had been repeatedly chastised for having an ulterior motive whenever they turned down Cochran’s budget requests.

“People need to have good public safety, but that is not the issue. The issue is there is not the money to do it,” King said.

Cochran currently has a lawsuit pending against the county alleging that commissioners cut his pay as political retribution when he took office three years ago. Prior to Cochran’s term, the sheriff was paid a lump sum to feed inmates in the jail and could keep the surplus, as opposed to the county just paying the actual cost of the food.

When the practice was curtailed as Cochran went into office he claimed the effective pay cut was political retribution since he was a Republican and the commissioners are Democrats. The tensions have been brewing ever since.

Graham jerks the rug out from Swain County in Deal’s Gap

Graham County has thrown a curve ball in an ongoing debate with Swain County over ambulance service in Deal’s Gap, a motorcycle mecca that sees a disproportionately large share of wrecks.

Deal’s Gap is an outlying area of Swain County, so far-flung that it takes an ambulance 45 minutes to reach it from Swain County. The area is much closer to Graham, which has historically provided emergency services to the area as a courtesy.

Graham and Swain are at a stalemate in negotiations over whether Graham should be compensated for providing the service within Swain’s borders. Swain thus far has refused to ante up, claiming it already provides a quid pro quo by transporting Graham residents who end up in the Swain County Hospital.

In a surprise move on Tuesday, Graham informed Swain that it would not answer emergency calls to Deal’s Gap over Labor Day weekend. Graham will have its hands full responding to calls within its own borders, they said.

Swain County Manager Kevin King said the news came as a surprise, since the two counties were still in talks and Graham previously said it would give Swain time to make arrangements to cover the area if they couldn’t come to another resolution.

King said Swain County generally has two ambulances in service at any given time. A third ambulance that usually serves as back-up will be posted in the Deal’s Gap area for the Labor Day weekend.

King said Swain will also be willing to help out Graham if they are stretched too thin.

“If they need our help, we will be right there,” King said.

Swain will continue transporting Graham residents receiving treatment at Swain’s hospital.

“We are not going to play that game with them,” King said.

Graham, Swain still squabbling over emergency coverage in isolated area

Swain and Graham county commissioners agreed Monday to let their respective county managers look at solid numbers before deciding on a resolution to the Deal’s Gap quandary.

Graham County, which provides rescue service to the satellite Swain County territory and motorcycle mecca, wants Swain to contribute financially for the service, take care of its own terrain despite the distance or cede the 1,900-acre area to Graham.

Meanwhile, Swain has countered that it loses money each time it transports Graham County residents and those injured in Graham County’s Tsali Recreation Area— one of the nation’s premier mountain biking destinations — from its Bryson City hospital on to larger hospitals in Sylva and Asheville. These patients end up in Swain County’s hospital because Graham County does not have a hospital of its own.

Contrary to what Graham County had originally asserted, Swain County Manager Kevin King claimed Swain was the real financial loser on the two counties’ mutual aid agreement.

King presented the results of his research to the two boards at the second meeting called specifically to address this issue.

Assuming that the county recoups the typical 70 percent of its expenses from the patients it transfers to hospitals, each ambulance trips equals a loss of $214 for the counties, according to King.

Last year, Swain County made 55 trips to the Tsali area and 110 trips transporting Graham County patients from Bryson City to bigger hospitals. That would mean a total loss of more than $35,000 for Swain County.

On the other hand, Graham County made 29 trips to the Deal’s Gap area last year, which according to King’s calculations, signifies that Graham County lost a bit more than $6,000 last year.

But Graham County Manager Lynn Cody said the expense is much greater than that.

“It’s costing little over $100,000 to compensate our EMS, fire and rescue service and our law enforcement,” said Cody.

King said Graham County has not backed up that figure thus far.

“Up to this point, they have not proven it,” said King. “I’m empathetic to what they’re saying. I just don’t think it’s costing them what they’re saying it costs.”

According to Cody, however, the final figure must take into account the added costs associated with Graham County ambulances making a long trip on windy roads to arrive at an accident scene, only to find both the victim and motorcycle missing. Furthermore, some of the injured refuse to be treated after the ambulance has already arrived. In these not so rare occurrences, Graham County can’t bill anyone for their trip, leading not only to a loss of time and money, but also more wear and tear on their vehicles.

Terry Slaughter, EMS director for Graham County, agreed that responding to calls at Deal’s Gap has not exactly been easygoing, even if it is only an issue in the summertime when throngs of motorcyclists crowd the roads there.

“It’s a little more time consuming than just a typical call where you pick up someone at their home,” said Slaughter. But fortunately, they have never had a situation where ambulances were too tied up at Deal’s Gap to respond to calls in Graham County, thanks in part to mutual aid agreements with other counties, he said.

Out of Swain County’s $11 million budget this year, about $798,000 has been allocated to EMS. Meanwhile. Graham County expends about $884,000 of its $12.6 million budget on EMS services.

Glenn Jones, chairman of the Swain County Board of Commissioners, said he hoped the two counties would carry on with the status quo.

“I would like to see us get along together and continue a mutual agreement,” Jones said. “[But] if we have to go it alone, we probably are prepared to do that.”

If Swain County took over rescue service at Deal’s Gap, its ambulances would have to travel nearly 50 minutes to respond to calls. The only other option would be to put up an EMS substation in Deal’s Gap.

Graham County Chairman Steve Odom said he would be willing to give Swain County six months to prepare an such a facility.

But Swain County Commissioner David Monteith said it would be hard to pull off that special service for 8 full-time residents out of about 13,500 residents in Swain County.

“I don’t see that we could justify it to the taxpayer,” said Monteith.

King said that people who move into the outskirts of Swain County, like Deal’s Gap, realize what they’re getting themselves into.

“They know when they buy that property where EMS is, where law enforcement is, where the courthouse is,” King said.


Redrawing county lines?

Swain stands to lose $195,000 in annual tax revenue from the 34 homes and businesses in Deal’s Gap if it were taken over by Graham County.

Odom said Graham County is not following through on its annexation proposal at this point, but it isn’t yet out of the question. He said Graham is fully prepared to petition the state legislature to move county lines.

“If they failed to give us enough money, if they fail to take care of it yes, then I don’t know why we shouldn’t pursue it, “ said Odom. “Even if it’s a long drawn-out process, I think the argument is on our side.”

Ben Steinberg, general manager at Deal’s Gap Motorcycle Resort, said he doesn’t see a need for Graham County to take over since he doesn’t mind living in isolation.

“This area, while it may not offer the creature comforts of modern life, it’s a small price to pay for the beauty of the natural surroundings,” said Steinberg. “We run to town once a week, get all the things we need. Our sign out front says population 8, and we absolutely love it.”

Steinberg said even if Graham County did annex the territory, life in Deal’s Gap probably wouldn’t change drastically.

“I’m not sure either community will be able to provide all the services we would need,” Steinberg said.

The long fight: Road debate nears final chapter

Since its creation, the Great Smoky Mountains National Park has loomed over Swain County. Its massive peaks flank life itself: as an engine for tourism, a stomping ground for locals, and a refuge for wild things.

The park’s most lasting legacy, however, seems to be the deep and unforgivable wedge it has driven through the mountain people living there. Like every community bordering the Smokies, Swain County suffered a heartbreaking evacuation of farms and home places to make way for the park in the 1930s. Hardly a decade later, the construction of Lake Fontana forced a second relocation, not only for those who lay in the direct path of the rising water but also those who lived in a vast area rendered inaccessible when the only road into their communities was flooded.

Hemmed in by the lake on one side and the park on the other — and with no road in or out — the area was no longer habitable, and the people were forced to move out. The isolated territory was ceded to the national park, but with a written promise from the government that it would rebuild the flooded road on higher ground. While the land would remain part of the park, the hope of a road provided a measure of solace. At the least, descendents believed they could visit their beloved home sites and pay homage to their cemeteries.

It has now been 68 years, and the road is still not built.

The broken promise to rebuild the road has fostered deep-seated distrust of the government and the park in Swain County. The feeling was so universal in years gone by that it was commonly taken up from the pulpit on Sundays, with preachers packing powerful sermons about the injustice perpetrated by the government’s betrayal. The hardships suffered by those visiting graves of loved ones trapped deep inside the park fanned the flames of bitter resentment.

“There was a good period of time in Swain County when the overwhelming view of the county was united that we needed to build this road,” said Leonard Winchester, 59, of Swain County. “Primarily based on the idea that the families from the North Shore had been given a raw deal and the road would give them a way to visit cemeteries.”

In the 1960s, a few miles of the road were actually built. But the rising environmental movement of the era rallied opposition from across the nation. Those forced out to make way for the park countered the false notions of a pristine wilderness. What about the houses and barns, mines and mills, stores and churches, that once riddled the area? But Swain proved no match for the numbers or clout of environmentalists, who not only made a good case against denigrating a well-loved national park but had the backing of environmental laws and the money to go to the mat if needed.

As Swain County fought for the road decade after decade to no avail, it seemed the government saw the mountains as a political backwater that needn’t be heeded. Over the years, however, some began to form a different conclusion. Perhaps the problem lay with the idea itself: a 30-mile road slicing through the largest backcountry territory in the East could never be pulled off.

As this realization sank in, a circle of leaders in the county began postulating: if given another out, would the government make good on its promise? If Swain County dropped its unwavering claim to build the road, then perhaps there was hope for another type of settlement.

The solution was a payoff, more or less: “Give us cash and we’ll settle this once and for all.” At first blush, it sounded like nothing more than a sell-out. Mountain people aren’t known for relinquishing their position once they’ve dug in. The challenge to change minds would be daunting.

The idea for Lake Fontana arose during the grips of World War II, when a large and steady source of electric power was needed for a plant in Tennessee hard at work churning out sheets of aluminum for wartime airplanes. A dam was proposed on the Little Tennessee River to provide hydropower for the Alcoa aluminum plant.

Not only would the lake drive out hundreds of people in the direct path of rising water, but it would flood the only road leading to several communities above the high water mark. Roughly 44,000 acres would be rendered inaccessible, leaving 216 families hemmed in by the lake on one side and the recently created Great Smoky Mountains National Park on the other.

The government could not spare the money to build a new road, so it decided those families would have to move out as well. A deal was crafted to evacuate the people and turn the land over to the national park.

The federal government signed a pact with Swain County to rebuild the flooded road after the war, “as soon as Congress appropriated the money” to do so. Known as the 1943 Agreement, it was signed by Tennessee Valley Authority, the State of North Carolina, Swain County and the Department of Interior on behalf of the national park.

The 1943 Agreement pledging to rebuild the road has lived in infamy ever since. While die-hard road supporters won’t speak to cash advocates even casually in public, there is one point they agree on.

“We felt like they owed Swain County something. We still do,” said Claude Douthit, the leading historian on all things pertaining to the North Shore Road.

The only question is what: a road or a cash settlement?

If there is one man responsible for turning the tide toward a cash settlement, it’s Douthit. Now 81, Douthit knows every court case on the matter, which courtroom it was heard in and the name of the presiding judge. He can quote chapter and verse from the 1943 Agreement.

A room in his house is littered with evidence of his fight for Swain County’s settlement. Files that no longer fit in cabinet drawers form precarious piles on his desk, dog-eared post-it notes protrude from the pages of Congressional transcripts. Maps detailing every tract of land acquired for the park have taken up permanent residence on his dining room table.

“I could tell you every piece of property that was down there and whose it was and how much it was,” Douthit said.

Douthit has all the necessary traits to drive the settlement home: he’s stubborn, cantankerous and a stickler for the facts. The tougher the fight got, the harder he hoed. When others wanted to give up, convinced it was a hopeless cause and their efforts were fruitless, he soldiered on, prodding others to stick with him.

Like many Swain natives, Douthit claims family ties to the area now under the park’s domain. His father worked for one of the big lumber companies as a blade sharpener for the giant saws that ate their way across the landscape in the 1920s.

Douthit spent his own career closely tied to the park. He was the head of the Bryson City office of the Tennessee Valley Authority, which had built Fontana Lake. As a lake overseer, Douthit spent many a day patrolling the water.

“I worked up and down this lake, worn out more damn boats than most people have ever seen,” Douthit said.

That’s how his quest for the real history behind the North Shore started.

When Douthit first started with TVA in 1951, the lake was relatively new. He was frequently paid visits by those whose land was claimed in the creation of the lake or the park and became a dumping ground for their gripes. Some claimed they were still owed for their land, others decried the hardship to visit family cemeteries unreachable except by boat.

“I had to learn and understand exactly what happened,” Douthit said.

Douthit wasn’t always a supporter of the cash settlement. Like most, he felt the government should keep its promises to build back the road it flooded.

While slow to start, it seemed the road would eventually come to pass. In 1960, $8 million was appropriated for the road and construction got underway. But in 1968, with just seven miles built, work ceased. For starters, money had run out. But far more ominous, environmentalists had mounted a campaign against the road. And park service engineers issued a report advising against further construction.

While the road progressed in fits and starts those eight years, a second debate was playing out over whether the park should be designated as wilderness. A heated round of public hearings ensued. Environmentalists and park lovers wanted the entire park to be designated as wilderness, forever scuttling the North Shore Road. The people of Swain County fought back, but were outnumbered by the rising environmental movement of the era. While wilderness designation never came to pass, the writing on the wall did not bode well for the fulfillment of a road.

Douthit and others fighting for a settlement of the 1943 Agreement began toying with the idea of a lawsuit against the federal government. In 1974, an entourage from Swain County drove to Asheville and boarded two small planes bound for Raleigh. Their mission was to meet with the N.C. Attorney General Robert Morgan and implore the state for help.

“Whether it was build the road or give money, just to do something,” Douthit said.

They felt the only solution was to sue the federal government.

But they soon uncovered a major flaw in the 1943 Agreement. The agreement contained a hold-harmless clause should the road never come to fruition, stating: “failure on the part of Congress for any reason to make such appropriations shall not constitute a breach or violation of this agreement.”

“Our county lawyers at the time got out- lawyered, so to speak,” Douthit said.

Dejected, Douthit realized there was no ground for a lawsuit.

“If they filed a suit, it would be lost and Swain County would never receive anything. It would be over with. We would get no road, no money, nothing,” Douthit said. “Knowing we couldn’t sue on the 1943 contract, what would we do?”

To Douthit, the fight for a road hit a dead-end.

“Why did I choose to fight for money?” Douthit asked. “We knew we couldn’t get the road. We knew we could never get it.”

And so Douthit began the long, uphill battle to bring the same revelation to the rest of Swain County.

One of the people on Douthit’s list to bring over to the side of a cash settlement was Luke Hyde. Born and raised in Swain County, Hyde went away to law school and entered the world of state politics in Raleigh. He traveled back and forth regularly, and Douthit figured Hyde would be useful to have on their side.

Like Douthit, Hyde, 69, had always supported the road. In the late 1960s, Hyde joined an underground movement of strategists to get the road built. They researched federal laws, studied the politics and plotted the prospects of bringing a lawsuit against the federal government get the road built.

But one day in the mid-1970s, when Hyde was giving a talk for the local Democratic Party in the old Swain County Courthouse, Douthit approached Hyde and shoved a thick stack of papers into his hand. Among the papers was a copy of the 1943 Agreement. Hyde came across the same pesky hold-harmless clause.

“I sat there reading it and my face flushed and I got angry and said ‘Son of a gun,’” Hyde recalled. “It was a marvelous job of lawyering.”

Like Douthit, Hyde realized then there would never be a road. There was only one outlet left. In lawyer’s terms, it’s called a “substitute performance,” but to laymen it would become known as the cash settlement.

It wasn’t an easy stance for Hyde. His own family grew up in the North Shore area and was forced off their land to make way for the lake and the park. Many in his own family remain road supporters to this day.

“We respect and love each other enough not to talk about certain issues,” Hyde said. “We are on good terms, but they think I am wrong for supporting the cash settlement.”

The drama over the North Shore Road heated up through the 1980s. Descendents of the North Shore area sued the government to get the road built, known as the Helen Vance lawsuit. The case was lost, appealed, lost again, appealed again, but denied by the Supreme Court for a hearing.

Meanwhile, Congressmen fought it out in the halls of Washington. Dueling bills were introduced: one that would provide a cash settlement of $9.5 million and one that would build the road.

In Swain County, public hearings on the dueling bills drew crowds in the hundreds, inspiring impassioned, angry and heartbreaking speeches. It was like a replay of the public hearings from 20 years earlier pitting wilderness designation against road construction. Little did people know at that time that the hearings were destined to repeat themselves yet again 20 years later.

Supporters of a cash settlement had won an important and promising ally in the late 1970s: Cecil Andrus, Secretary of the Department of the Interior. Andrus made a trip to Swain County to see for himself the issue at hand. It seemed everyone wanted a shot at lobbying Andrus, so a local entourage rented a bus and piled in for a chance to bend Andrus’ ear.

“We took him up to Calf Pen Gap and let him look across Fontana Lake to the Smokies,” Douthit said. “We wanted to convince him that Swain County was due some money, due something.”

The fieldtrip ended with a catered picnic at Deep Creek in the park. Andrus was apparently convinced and began working to help secure a cash settlement for Swain County. Andrus even appointed a committee to study the issue, which recommended a cash settlement of $9.5 million. A bill was introduced to that effect in Congress.

Although one foot was in the door, the prospect of a cash settlement hit a brick wall. Senator Jesse Helms, with his dueling bill to build the road, proved a formidable opponent. Helms was soon joined in Washington by Congressman Charles Taylor, who took a similar stance in the House of Representatives.

By the ‘90s, the issue had all but stalled. The families suing for the road lost their lawsuit in the federal courts. In Congress, Helms and Taylor were unable to advance the road but were unwilling to take up the cause of a cash settlement.

“We wound up with nothing,” Douthit said.

While hamstrung nationally, supporters of a cash settlement put their down time in the ‘90s to good use, swaying the hearts and minds of locals. In the process, Hyde struck on a commonly held belief.

“If you asked people as a moral question, should the government build the road, the answer would be ‘yes.’ But at the same time 9 out of 10 said there ain’t going to be a road,” Hyde said.

So Hyde stopped asking people whether they thought the road should be built.

“The question instead is ‘since they are not going to build the road, what should we do now? What is an intelligent plan B?’” Hyde said. “That’s been my posture.”

They took their message to what Hyde calls the county’s “influence molders,” one porch at a time and one living room at a time. One of those on their list was a man named Leonard Winchester.

Like many, Winchester was a road supporter. Hyde and Douthit not only swayed him, but convinced him to take a leadership role in their newly formed group to fight for the cause of a cash settlement: the Citizens for the Economic Future of Swain County. While all in the group support the cash settlement, reasons vary.

“Some say since there is not going to be a road, we should pursue a settlement,” said Winchester, 59. “My view is given the choice of a road or a settlement and you can have which ever one you pick, I would still pick the settlement. I think it is a better choice.

“Clearly there would be some level of tourism increase if the road was there, but who would benefit from it,” Winchester said. “The average taxpayers would not get much out of it.”

Winchester, now retired, was the IT director for the school system at the time. Winchester was a Republican, unlike Hyde and Douthit who were Democrats. Winchester would help present their group as bi-partisan.

The Citizens for the Economic Future of Swain County needed a cold, hard dollar amount to ask for to successfully advance the cause of a cash settlement. The group hired an accounting firm, Crisp, Hughes and Evans, to calculate a figure. They had an easy starting place: the monetary value of the old road flooded by the lake. The accounting firm started with that base figure, adjusted for inflation and added 60 years of interest. Their answer became the now-touted $52 million.

To realize a cash settlement, the group had to sway the original four signatories of the 1943 Agreement: Swain County, North Carolina, TVA and the park service. Each would take work to win over, but perhaps the toughest and most critical were the elected leaders of Swain County.

To that end, the Citizens for the Economic Future of Swain County pulled off quite a coup in the county commissioner election in 2002. For the first time, a majority of the candidates elected were in support of the cash settlement. They promptly passed a resolution by a vote of 4 to 1 calling for a $52 million payout in lieu of the road.

In the meantime, however, road supporters were having some luck of their own. Congressman Charles Taylor, a long-time road supporter, had risen in prominence and power in the halls of Washington. Using his seat on the powerful Appropriations Committee, he stealthily inserted a line item of $16 million in the federal budget for construction of the road.

It was far from a green light for the road, however, as the National Park Service would first have to undergo a massive study to meet the terms of the National Environmental Policy Act.

The park would spend more than five years coming up with possible solutions and weighing them from every possible angle — even building a giant bridge across Fontana Lake. Once again, controversy reached a fever pitch as Swain County became home to another round of heated public hearings, marking the third such showdown in the history of the road saga.

The park service spent five years and $10 million conducting the assessment, a 552-page report on the pros and cons of building or not building the road. Ultimately, the park came down on the side of a cash settlement.

Ironically, Taylor had single-handedly advanced the cause of a cash settlement more than anyone in history. If not for his $16 million line item to build the road, there would have been no environmental assessment that in turn forced the park service to formally weigh in — for or against — for the first time. Taylor’s little line item had also once more rallied environmental groups and pushed the issue onto a national stage.

“That put them in high gear,” Winchester said.

The environmental movement was the lynch-pin in the fight for a cash settlement, bringing to bear political pressure that the people of Swain County could never have mustered otherwise.

“The conservation community is a large community, and they were willing to help to keep a road from being built through the park,” Douthit said.

In 2007, several key elements fell into place to bring about the cash settlement in lieu of the long-promised road.

One was the election of Heath Shuler, a new congressman for Western North Carolina who was from Swain County and differed from his predecessor’s stance on the road. Shortly after Shuler took office, he got to work on a cash settlement. Just three months into his term, a coalition of 17 Senators and Congressmen from North Carolina and Tennessee joined forces in calling for a cash payoff and signed on to a letter of support.

“We finally had a large number of lawmakers focused on getting a monetary settlement for the folks in Swain County. It was the first time we’d been able to point to such strong support for that approach on Capitol Hill,” Greg Kidd, with the Asheville office of the National Parks Conservation Association, said at the time.

In May of that same year, Douthit got an important call — one that was a long time coming. Dale Ditmanson, the superintendent of the Great Smoky Mountains National Park, told Douthit the park service finally made a decision on the North Shore Road. It supported a cash settlement.

“I was very pleased,” Douthit said.

Shuler got to work again and appropriated $6 million as a down payment toward an eventual cash settlement in the government’s 2008 fiscal year budget. Another $6 million is left over from the pot of money secured by Taylor for road construction that never came to fruition.

Swain won’t receive any money until final negotiations with the park service over a dollar amount are concluded.

While it seems Swain County is closer than ever to getting something, a new obstacle has arisen. The same park leaders who once embraced Douthit, Hyde and Winchester as allies have suddenly stopped backing a settlement figure of $52 million and are pushing for a lower number, according to those familiar with the issue.

The about-face was not only a surprise but a personal affront to the people of Swain County.

“It is the greatest disappointment I have seen in the last 20 years,” Hyde said. “I don’t know why they are backpedaling, but it is not a nice thing to do. We believe in the mountains in keeping your word. We got into this mess partly because people didn’t keep their word.”

Park Superintendent Dale Ditmanson said he is merely trying to arrive at an equitable figure and determine how the $52 million was calculated.

Hyde said there is a moral and legal obligation for the park service to stay with its position on $52 million. Hyde suspects it may be a negotiating device suggested by the legal counsel for the park service. Whatever the case, “It’s not going to work,” Hyde said.

It seems the government is getting a bargain with $52 million — considering the cost of building the road was pegged at $728 million, he said.

Swain leaders say they won’t settle for anything less. For Douthit, Hyde and Winchester, it would be difficult to face their friends and neighbors if they did. They rallied the community to give up on the road and come together behind a cash settlement of $52 million, and to now produce something less simply isn’t an option for them.

“We are closer than we have ever been, and we are going to prevail. I am convinced we are going to make it work,” Hyde said. “While it has been 66 years, we are going to solve this and Swain County will get $52 million. We have the right combination in Raleigh and Washington.”

Cash settlement amount proves a sticking point

Negotiations over a cash settlement for Swain County have been stalled for more than a year as opposing sides argue over a fair dollar amount.

Swain County officials have met three times with the U.S. Department of the Interior to discuss a dollar figure for the cash settlement, but negotiations were called off last July. The leading reason is a change in Washington administration, from a new president to a new secretary for the Department of the Interior and various players down the line — all of whom must be briefed and educated on the long-standing controversy.

The negotiations also ground to a halt after the U.S. Park Service mentioned a dollar amount for the settlement that is drastically lower than what Swain County expected to hear.

For six years, Swain leaders have operated under the assumption they would get a $52 million cash settlement from the federal government if they gave up their claims to the long-promised North Shore Road. The federal government promised to rebuild the road after flooding the old one during the construction of Lake Fontana in the 1940s. Building a new one would traverse 30 miles of backcountry in the Great Smoky Mountains National Park, an expensive and environmentally unsound proposal — thus making the cash settlement a more viable alternative.

U.S. Congressman Heath Shuler, D-Waynesville, has been fighting for a cash settlement since taking office three years ago and stands by the number of $52 million.

“That number has been pretty consistent. That is the number that has been out there,” Shuler said.

Shuler said he does not know why the park service came up with such a low number in negotiations.

“It may have just been thrown out there to say ‘Let’s see if they’ll take this,’” Shuler surmised. “I think like with any negotiation, one group will start out low and one group will start out high.”

That said, Shuler doesn’t want to bend on $52 million, nor do the Swain County commissioners who will ultimately accept or reject any offer on behalf of the county.

According to those familiar with the negotiations, Great Smoky Mountains National Park Superintendent Dale Ditmanson has been actively pushing for a far lower number. In a response to written questions, Ditmanson countered that claim, however.

Ditmanson said that the park service has not yet made Swain an offer for a monetary settlement. When asked how he would characterize the figure he allegedly brought up during the negotiations, Ditmanson did not respond.

It is unclear how much sway Ditmanson will have over the final number the Department of the Interior puts on the table.

“As superintendent, my primary responsibility is to do due diligence in identifying a justifiable basis for a monetary settlement and briefing the leadership of the National Park Service and the Department of Interior,” Ditmanson said in his written response to questions.

Ditmanson said the purpose of the negotiations right now is to determine exactly how Swain County has calculated the figure of $52 million and whether it is accurate. The premise is that it starts with the value of the road at the time it was flooded and adjusts it for inflation and interest. But exactly what the starting number should be is a matter of debate.

“Determining a basis or calculation for a monetary settlement is a primary purpose of the meetings with the four parties,” Ditmanson said. The basis will be explained in the final agreement, he said.

The sum of $52 million was arrived at by the Citizens for the Economic Future of Swain County, a group that formed to advance the cause of a cash settlement. In 2002, the group hired the accounting and auditing firm of Crisp and Hughes to do the calculations.

Shuler said he has been educating the new guard in Washington about the North Shore Road issue, including a meeting with President Obama’s chief of staff and a breakfast with the Department of the Interior Secretary Ken Salazar.

“We have to reengage them back into the process,” Shuler said.

As for Ditmanson, he has briefed the assistant secretary of the Department of the Interior and the acting director of the National Park Service. There is no permanent director appointed yet.

The past three negotiation meetings have had a delegation from Swain County, the state, the National Park Service and the Tennessee Valley Authority, which built the dam and lake that flooded the road. Ditmanson expects another meeting between the parties to be held this fall.

Shuler said the decision of how much to appropriate for a settlement is ultimately up to Congress, and he will fight for what he calls a “complete settlement.”

Shuler managed to rally support among fellow congressmen and senators for a cash settlement two years ago. But that was when building the road was still on the table and the park service was in the final throes of a major analysis weighing the pros and cons of each option.

During the analysis, the park adopted the figure of $52 million and quoted it extensively as a leading alternative to building the road during a lengthy public input process. That led the public to believe that if the monetary settlement was supported, that’s the amount Swain would be getting.

But Ditmanson now says the figure was used only for “analysis purposes,” largely because it lacked anything more concrete. The $52 million figure had been proposed by Swain’s leaders, so the park ran with it during the analysis.

When the analysis concluded and the park came out with its official stand on a cash settlement instead of the road, the $52 million figure vanished and was replaced with the language “monetary settlement,” with “an equitable method” for arriving at a dollar figure to be determined through negotiations. Ditmanson was appointed as the Department of the Interior’s point man in those negotiations.

Ditmanson said his job is now in the “due diligence” stage.

Shuler said the full settlement of $52 million is needed “to heal some wounds and bring people back together in the community.”

When asked about the public relations crisis the park service would likely encounter by refusing to endorse a settlement of $52 million, Ditmanson said his responsibility is merely to determine an equitable amount.

“I cannot comment on how the public will respond,” Ditmanson said.

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