“It’s my obligation to raise my hand and point this out.”
So said Janet Cowell, North Carolina State Treasurer, as quoted in the News and Observer, February 4, 2010, about the way debt was being generated and managed by the North Carolina Department of Transportation.
It is also her obligation to raise her hand and point out problems with debt for cities and counties in this state. The Local Government Commission (LGC) is the division of the Treasurer’s Office that keeps the tally on responsible debt and the repayment of debts for all its citizens. It is time they raised their hands and did more to point out how the $1.8 million in debt that the Embassy owes the city is to be reconciled.
The Embassy Foundation is in debt to the city of Henderson. The budget amendments of the city of Henderson call this debt a loan. The LGC calls this debt a loan. The city of Henderson calls this debt a loan. All the documents state that this loan is to be repaid. But no one is raising their hand to do anything about it.
The federal government bailed out banks with money just like the city of Henderson bailed out the Embassy Foundation with our money. Is our city government expected to sit idly by and let this loan go unpaid? Are we citizens suppose to ignore the contracts that call for this money to be repaid? Is there an expectation that debt will drift along until it is forgotten?
This is our problem and our business. As with any problem, we must begin by first laying the cards out. There may be more than one way to resolve these issues, but these cards need to be laid out while the public watches. The LGC and the entire Embassy Foundation board should be asked to meet with the Henderson City Council and come to some resolution.
First, the Embassy Foundation should acknowledge that the loan will be satisfied before any further capital building is done by the Foundation. This would mean that any further fund raising or gifts would be used to satisfy the debt they presently have with the city. Thus, if the Embassy proposes to build an auditorium, it will begin only after all the present debts of the Foundation are cleared with the city. It should not be necessary for the city to attach a lien to the property for payment. Past Community Development Block Grant documents allow the taxpayer to know the future resources that the Embassy Foundation expects. These future resources should go to paying off the Foundation’s debt. These funds should not be diverted to building an auditorium until the city has its money back.
Next, the city taxpayers along with the city council should ask the North Carolina General Assembly to change the city charter. The city should not have the right to transfer property to the Embassy Foundation. This should be removed from our charter. Then the city should determine ownership of the land that borders Breckenridge and Wyche Street and settle this once and for all in a clear deed.
Further, the deal with Variety Wholesalers for the use of the parking lot should be re-negotiated so that the upkeep and maintenance of that property is equitable. The city should resolve these nebulous deals.
The city council should appoint a task force with majority membership from the taxpayers and representatives from the LGC, the North Carolina Secretary of State’s Office, the Vance County Commissioners, and the Embassy Foundation to advise and oversee the finalizing of the ownership of the H. Leslie Perry Memorial Library and McGregor Hall. These negotiations, of course, should be open to the public.
Presently, the Embassy Foundation, a non-profit organization, holds the deed to the buildings and land. It was anticipated that the property would be transferred to the city when all debt was cleared. It is not forbidden that the property be transferred to the county. Since the county has the responsibility for library funding, it would make sense for this building to be owned by the county, but only after the debt to the city is cleared.
Ownership of the furniture, computers and equipment in the library building should be put in the hands of the library’s board of trustees exclusively. When the ownership of the property and furnishings is determined, the future of McGregor Hall can be discussed, especially the maintenance and utility bills. If necessary, it is not impossible to separate the two buildings and provide a different entrance to the library. A specific and concrete contract is essential so that speculation and guesswork about this property is removed. A specific and concrete deed is also needed.
It is time the city got this murky business straightened out. The State Treasurer and the Secretary of State work for us, and they should provide the lifting power to resolve these issues that are weighing our city down both now and into the future. It is time for the State Treasurer to raise her hand and call attention to this quagmire of debt and ownership, and it is her responsibility to clear the path going forward.
Does the city council have the initiative to move forward on this? Raise your hand and let them know you want this business made straight. It has been messy long enough.