Swain braces for loss of jail revenue

The Eastern Band of Cherokee Indians recently got a big push forward in building its own jail after receiving an $18 million grant from the Department of Justice.

The grant may be excellent news for the tribe, but for Swain County, it’s a source of anxiety. Swain’s new oversized jail relies heavily on prisoners from Cherokee to fill its 109 beds and to subsidize the $10 million facility.

Recently, Swain Sheriff Curtis Cochran reported that out of 61 prisoners in the jail, 32 were from Cherokee and just 29 were from Swain.

Swain is already struggling to prop up the jail, which carries a $450,000 annual loan payment, because surrounding counties that once housed overflow inmates in Swain’s jail have recently built new jails of their own.

Consequently, Swain has seen the number of out-of-county inmates decline by half from 2005 to 2008, and along with it, a significant decline in jail fees, which average $50 per prisoner per night.

Cherokee has been a lifeline for Swain’s jail, with more than 90 percent of the overflow inmates Swain houses coming from the tribe.

Cherokee Police Chief Ben Reed said the tribe does send some inmates to jails in Haywood, Cherokee, Clay and Rutherford counties, but Swain gets the greatest share by far. Since Swain opened its new jail a year ago, the tribe has sent almost 90 percent of its prisoners there, Reed said.

Though the arrangement has worked out well for Swain, EBCI has been studying the possibility of building its own jail for several years. In fact, Swain leaders knew before embarking on its oversized jail that the tribe hoped to build its own eventually.

“With Cherokee’s growth and development, I think it’s time that we have our own jail,” said Reed. “We spend a lot of money and resources to transport our inmates into different county jails.”

EBCI hopes to eventually build a justice center that would bring its courthouse, police department and attorney general’s office under one roof, along with a jail and parking garage.

Cherokee’s grant, part of $236 million in stimulus and public safety funds allocated to tribes across the United States, can only be used toward building the jail.

But it may be a while before that prison is built, as the tribe is just now forming a committee to guide the construction process. Mickey Duvall, economic development director for the tribe, said they hope to elect a chairman in the coming weeks.

Learning from mistakes

After seeing counties like Swain struggle to fill an oversized prison, Reed acknowledged that the tribe must do its best to avoid overbuilding its own jail.

“We’re going to take a good hard look at where we are now and what our needs are going to be,” said Reed.

Swain County Manager Kevin King said the county’s jail was built big to accommodate population growth over the next 15 years, which he said would likely be accompanied by an increased crime rate. King planned to rely on prisoners from other counties in the short-term but thought the county would eventually fill up the jail with its own prisoners.

But Cochran said he doesn’t see that explosion in Swain’s population occurring fast enough to line the jail’s beds with Swain prisoners any time soon. Besides, much of the population growth in the mountains seems to involve retiring baby boomers or second-home owners, who are less likely to be committing crimes.

Meanwhile, Cochran is working with the U.S. Marshal Service to win back federal prisoners to the Swain jail. The marshals originally pulled out their prisoners due to the crumbling status of Swain’s old jail and its lack of fire sprinklers.

Cochran said all his paperwork is in with the marshals but admits it could take a while before they make a decision.

“It’s a slow process when you deal with the federal government,” said Cochran.

While County Commissioner David Monteith has brought up the idea of putting unused jail space to another use, Cochran just doesn’t find that feasible.

“A jail is a jail, that’s what it is,” said Cochran.

King pointed out the silver lining amongst dark clouds, stating that food costs would drop after Cherokee prisoners pull out. Swain County saw the cost of food at the jail climb 49 percent last year. But that doesn’t settle how the county will make up for the loss of revenue from the tribe when it builds a jail of its own.

King said Swain will have a few years to figure that out.

“As far as short-term, nothing’s going to change,” said King. “Long-term, hopefully the economy will gain what it lost.”

When it comes to Swain’s jail troubles, it’s easy to play the blame game, Cochran said, but no one could deny that Swain County needed a new jail.

“The one we had was completely dilapidated,” said Cochran, who was not in office at the time the decision was made. “Did we need a $10 million jail? I don’t know.”

Angling for Sam’s Club discount, Swain jailer uses credit card to buy TV

Misuse of county credit cards by a Swain jailer has prompted tighter controls on charge card use across all departments.

Earlier this year, a jailer purchased a $500 or $600 big-screen TV with the county’s credit card at Sam’s Club, said County Manager Kevin King.

The officer came back from a shopping trip for prison supplies with the TV, saying that she would reimburse the county for the purchase. Even though the detention officer followed through on that promise, she was fired.

Finance Director Vida Cody said a supervisor should have informed all employees about the county’s policy on making purchases, but Swain County Sheriff Curtis Cochran said it shouldn’t take training to realize that buying a TV with county money is wrong.

“Common sense would tell you that’s not allowed,” said Cochran.

The out-of-line purchase was flagged in the county’s annual audit but was not serious enough to launch a full-on fraud audit. Auditor Eric Bowman simply called for better internal controls so the misuse would not escalate into a bigger problem.

That misuse of the credit card was “one of many,” according to finance director Vida Cody. Employees in the Sheriff’s Department have also exceeded their meal allowance of $34 a day for three meals and made work-related purchases of more than $100 without getting prior approval by the finance department.

The finance officer is supposed to approve every purchase over $100 to ensure there’s enough money in the budget for it. An exception, however, could be made for emergency purchases, like repairs on a squad car that has broken down.

Now, all county employees can only buy supplies online on the Sam’s Club Web site, rather than at the physical store. Before hitting submit on that online order, though, Cody must check a printout of the purchase to ensure there’s enough money budgeted for the buy. After Cody approves the order and the employee makes the purchase, Cody must compare the printout of the receipt against the original printout.

To help decrease spending in the face of a budget crisis, Cochran said his department is also cutting down on travel expenses, only making trips when they are “absolutely” necessary.

Cody said no matter what, it is difficult to have complete control over the county’s credit cards, as employees may not always pay attention to how much they’re spending.

“It’s easy to want to use those cards when you have it on hand and go over your limits,” said Cody. “You could operate on trust, but people are human too ... The economy is bad. People might do things they might normally not do.”

Swain fails to make headway in cash settlement talks

The National Park Service and Swain County appear locked in a stalemate over how much the federal government should pay up for breaking its long-standing contract to replace a road flooded by the creation of Lake Fontana in the 1940s.

Swain County has asked for $52 million as fair compensation for the government’s refusal to honor the long-standing written promise to rebuild the road it flooded. But a meeting between Swain County and the National Park Service last week ended once again without a resolution. It is the fourth meeting held between the parties over the past 18 months.

“It is the same thing they have been doing for the past 65 years — they tell you one thing then they go back on their word,” said Swain County Commissioner David Monteith, who would rather see the road rebuilt rather than cash anyway. “I told the commissioners it was time they put their britches on. We have yet to get what we were promised.”

Swain County Manager Kevin King said the county expects $52 million and nothing less. The number was first proposed by the county in 2002. The park service later used that figure in its own literature and documents that were disseminated to the public during a comprehensive analysis of whether to rebuild the flooded road — which would traverse 30 miles through the Smokies — or compensate the county financially for the broken contract.

Smokies Superintendent Dale Ditmanson has failed to get behind the number, however.

“Their whole mission is to get as low a number as possible,” King said. “That’s why it is called a negotiation. They are just doing their job.”

Bob Miller, spokesperson for the Great Smoky Mountains National Park, would not say whether the park service endorses $52 million, or whether it opposes the amount.

“Discussion are still ongoing, aimed at coming up with an agreeable settlement amount,” Miller said.

Heading into the meeting, those following the process thought the park service might put a formal offer on the table. However, that didn’t happen. Instead, Congressman Heath Shuler, D-Waynesville, will continue lobbying for the full $52 million.

“He is trying to get it worked out behind the scenes,” King said. “I think that is why the park service did not present an offer because they know the wheels of government are turning.”

The negotiations had reached an impasse last year, with the park service unwilling to get behind $52 million. Shuler intervened in hopes of getting the money appropriated anyway.

King and County Attorney Kim Lay are the only people representing Swain County who participated in the meeting, which included a dozen people representing five different parties.

Residents value rural heritage and environment in highway debate

An overwhelming majority of citizens who showed up at a public hearing in Robbinsville spoke out against the Corridor K road project last Thursday (Oct. 29).

The proposed four-lane highway would supplant the winding, two-lane roads that are currently the only means of access to Graham County. In the process, it would bore a half-mile long tunnel — the longest in the state — through a mountain. It would also tower over the rural Stecoah Valley area.

Corridor K, a 127-mile route through the mountains of Tennessee and North Carolina, has been in the works for more than three decades. The DOT wants to start construction by 2014 on a 10-mile section of the 17-mile missing link in Graham County.

The road’s three goals are to bring economic development, end a geographic isolation N.C. DOT sees as dangerous, and improve steep and curvy roads that currently feature inadequate shoulders.

The highway would take the thousands of tractor-trailers out of the Nantahala Gorge, which is currently the main artery to reach Murphy but is clogged with buses loaded with rafters and kayakers.

David Monteith, a Swain County commissioner, said the new highway would increase tourism in Swain County, bringing more people in to raft the Nantahala and ride the train.

“It would bring in more people to Western North Carolina, period,” said Monteith.

But only two of the 22 speakers at the N.C. Department of Transportation hearing piped up in favor of the road. The rest enumerated every conceivable reason for why the road has no place in Graham County.

Bob Grove said the proposed roadway would not help Graham County’s economy. It would more likely provide easy access to a big-box chain stores like Wal-Mart than to downtown stores. For Grove, the highway provides an open invitation to local residents to head out of town to do their shopping.

Grove and many others suggested that it would be far less expensive and less destructive to improve the existing roads, rather than build a highway that would destroy the town’s main draw for tourists: scenic, winding two-lane roads.

Tom Hoffman of Virginia said he might stop coming to Graham County if the highway is built and that he would not return to “ooh and aah at a freeway interchange.”

Many voiced concerns about Robbinsville losing its rural character and transforming into yet another American “Clonesville,” with strip malls, billboards and fast-food chains lining the streets.

Others who objected said second home owners, who would surely come with the highway, would jack up tax values and drive out today’s local residents.

“It’s a euphemistic thing to be calling it economic development,” said Brian Rau of Stecoah. “To me, it’s just plain development.”

The issue hit close to home for Guy Roberts, who would lose the property that’s been in his family for five generations and more than a hundred years.

“We would like to preserve what is there for future generations,” said Roberts’ son-in-law Jeff Phillips. “I want to be able to fish with my grandchildren and have horses and cows they can play with. I want to be there for the rest of my life.”

A telling example of Graham County’s position came at two points in the night. Nearly everybody raised their hands when asked if they were against the road. When Melbe Millsaps asked who actually worked in Graham County, only a handful went up.

Millsaps said even though Corridor K would cut through her property, it would also provide more jobs and better access to education and healthcare for Graham County. Millsaps said she knows how dangerous the roads there can be after being forced to commute two hours each way to get to her nursing school.

“I think it’s time for Graham County to move into the 21st century and build the road,” Millsaps said.

Denny Mobbs, who lives in Ocoee, Tenn., agreed and said it’s time to bring some development into Graham County.

“We don’t want a pristine impoverishment,” said Mobbs.

Others worried about the road’s environmental impact, including air, noise and water pollution. The tunnel, which would be a major expense of the project, avoids the Appalachian Trail by going under it.

Melanie Mayes, a Knoxville geologist, said the N.C. DOT had not released any information about the possibility of landslides and acid leaching out of rocks.

Mayes pointed out that there was not even a single geologic map on the environmental impact study that was released. When Lewis said the N.C. DOT would give her all that information, Mayes retorted that it should have been released long ago.

Graham County Commissioner Steve Odom reminded citizens that even though Corridor K is controversial, they should realize that the county’s roads do need to be fixed in some way.

“It’s dangerous, I tell you,” said Odom. “You folks have a lot to debate, but we have some immediate needs, too.”


Weigh in on Corridor K

Let the N.C. DOT know what you think about the Corridor K Project by Dec. 4.

Email This email address is being protected from spambots. You need JavaScript enabled to view it. or write to Ed Lewis, NCDOT - Human Environment Unit; 1598 Mail Service Center; Raleigh, NC 27699-1598.

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.

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