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McClure removed from all appointed county positions
By Lynn Hotaling
In a surprise move last Wednesday (Jan. 12), county officials reconvened a recessed Tuesday meeting for the purpose of removing from his posts the chairman of the airport authority and county revolving loan committee.
Commissioners' Chairman Stacy Buchanan's five-part motion included removing Tom McClure from all county-appointed positions and launching an investigation into both the Economic Development Commission of Jackson County and the county's economic development office.
The motion passed unanimously.
The commissioners' action also directs county attorney Paul Holt to call in the QC Apparel loan and all other delinquent loans to the EDC and Jackson County, and to begin foreclosure if QC is not up to date. It dissolves the county's revolving loan committee and suspends the county's participation in the EDC, which is a coalition of the county, municipalities, Western Carolina University and Southwestern Community College aimed at attracting industry and creating jobs throughout the county. It stipulates that Jackson Development Corp., the property-owning offshoot of the EDC, is "in no way directly associated with the Jackson County Board of Commissioners."
Prior to action on Buchanan's motion, county commissioners voted in closed session to place Tamera Crisp, the only employee in Jackson County's economic development office, on paid administrative leave. Crisp receives an annual salary of $35,132.99.
"I haven't done anything wrong," Crisp said Thursday (Jan. 13). "They just have to complete their review."
Crisp's suspension was made "pending our analysis and investigation" into the economic development office and is "primarily for her protection," said Jackson County Manager Ken Westmoreland.
"She was working for two entities (Jackson County and the Economic Development Commission) and that places her in the middle," Westmoreland said.
McClure, director of the Office of Regional Affairs at WCU, remains chairman of the EDC and is also president of Jackson Development Corp. He is WCU's representative on the EDC and serves at the pleasure of Chancellor John Bardo.
"To be honest, I'm so flabbergasted I'm just stunned," McClure said Tuesday of commissioners' Jan. 12 action.
Commissioners removed McClure as chairman of the county's revolving loan committee, Buchanan said, as well as from his county-appointed seat on the Jackson County Airport Authority. However, McClure said Tuesday that he's not sure they can remove him from that board.
"I don't know that they actually have the authority to remove me," he said. "The airport authority was created by the Legislature."
Commissioners' actions were apparently triggered by concern over the status of the $300,000 loan made to QC Apparel in October 2002. When asked why QC was singled out in his motion, Buchanan said it was the one that had been brought to his attention.
"We heard full payments had not been made, even though commissioners had been led to believe things were OK when in fact that was not the case," Buchanan said.
Investigation/Audit
According to Westmoreland, local accounting firm Dixon Hughes performed the audits commissioners requested, and commissioners were scheduled to hear the report Wednesday (Jan. 19) at 4 p.m. during a reconvened meeting.
McClure said he doesn't know what commissioners expect to find.
"Once money goes to the EDC, it belongs to the EDC, and every penny's accounted for," McClure said.
Outstanding loans
According to Jackson County finance officer Darlene Fox, four of six companies who have obtained financing through the county's revolving loan fund are behind in payments. Clearwood LLC, Fraternal Composites, Country Collections and QC are all in arrears, she said, but all except Country Collections are currently making small monthly payments.
Both McClure and QC owner Clemmey Queen expressed surprise at the commissioners' decision to call in the company's loan, which has an outstanding balance of $331,381.42.
"We're working on a new deal," Queen said Tuesday. "If they don't foreclose, I'll be all right."
Queen and McClure said they met Tuesday with a new client who plans to send more business QC's way.
"I've got a new product – air conditioning vents – going, and I'm putting people to work," Queen said. "I'm up to 40 people; I thought that was what that money is for – putting people to work."
Queen admitted he was behind in payments but said he was hurt by a business associate who cost him $100,000.
Commissioners' 2002 decision to loan Queen $300,000 was based on a contract Queen had landed to produce bedding sets, and that was the customer who defaulted, Queen said.
"I shipped the products to him, but he never paid," Queen said. "He went out of business owing me $100,000."
"I don't know why they suddenly want to foreclose on QC," McClure said.
Amounts owed on the other loans that are behind in payments are: Clearwood – borrowed $225,000, balance of $142,961.29; Country Collections (out of business) – borrowed $14,000, balance of $14,504.84; and Fraternal Composites – borrowed $325,000, balance of $314,965.77.
Loan collection
"Commissioners were advised that the loans are the county's responsibility," McClure said. "When I gave them a presentation, I told them the EDC does not have responsibility for the loan fund, and the loan committee doesn't have the responsibility for policing them."
County attorney Holt said he has not been involved in dealings with the EDC or the county's loan committee, but that it seemed to him that whoever received the payments would have the responsibility of seeing that payments were current.
Finance officer Fox said that if payments are not made on schedule, businesses are notified by letter. Fox also said Crisp had visited companies who were behind in their payments. Those efforts led to the companies' efforts to pay something each month, Fox said.
County Manager Westmoreland said that the county had delegated responsibility for monitoring the loans to the EDC. In the past, the revolving loan committee would make a recommendation to the commissioners who decided whether to grant the loan.
"From there it's picked up by the EDC," he said.
In light of commissioners' action last week to dissolve the revolving loan committee, all future loan requests will be made directly to commissioners, Commissioners' Chairman Buchanan said.
Economic Development Commission
Buchanan indicated Thursday that the county would suspend its participation in the EDC. The county has not made any direct financial contribution to the group for the past two years, he said.
"We need to evaluate what we do in terms of economic development, and we have transferred all participation in economic development back to our board," Buchanan said.
Recent operation of the EDC and Jackson Development are "not the way I want to do business," Buchanan said.
"I envision a professional hired to do economic development who would brief the board each month," he said. "This stuff needs to be open and above board."
According to county Manager Westmoreland, the best way to explain last week's action is that the county "is suspending participation with the EDC until such time as it can discern the situation with the outstanding loans."
The county cannot abolish the EDC but can suspend participation, he said.
"Obviously we need some mechanism for economic development, but we don't know what it will be," Westmoreland said.
McClure confirmed that for the past two years the county has not contributed money to the EDC, which was created under G.S. 158, a statute that allows municipalities and counties to come together for the purpose of economic development.
According to McClure, the EDC is owned by the towns of Webster, Sylva, Dillsboro and Forest Hills, Jackson County, WCU and Southwestern Community College.
The county and EDC in March 2002 signed a memorandum of agreement whereby the county agreed to fund a full-time employee who would work exclusively for the EDC, with 90-day notice required on the part of either signee to alter that agreement, McClure said.
Crisp is that employee, and the EDC is now deprived of her services, McClure said, though as of Tuesday morning he had not been informed that Crisp had been placed on paid administrative leave.
"I don't understand that," McClure said.
The EDC has tentatively scheduled a meeting for 5:30 p.m. Monday, Jan. 24, but may hold a called meeting before then, McClure said.
Jackson Development Corp.
Commissioners last week disavowed any connection to the non-profit Jackson Development Corp., a distinction they were correct in making, McClure said.
Formed in 1987 and renamed in 1997, the JDC can hold title to property and is a valuable economic development tool, McClure said.
The JDC is governed by a five-member board – McClure, Sylva attorney Jay Coward, banker Scott Connor, businessman Boyd Sossamon Jr. and Crisp – and its officers are elected by that board.
The corporation's assets include the industrial complex at Whittier – the former Drexel Heritage location – that JDC borrowed money to purchase, McClure said.
Other revenue was derived from the sale of the former Buster Brown building in Sylva. That property was purchased jointly by the county and town of Sylva, McClure said, but the county's contribution came from EDC funds. Sylva officials transferred title of their share to the JDC in November 1998, with their investment protected by a $300,000 deed of trust.
The JDC subsequently borrowed money and paid off their obligation to Sylva, McClure said.
The only public dollars that went into the JDC came from the EDC and were moved to the JDC with the approval of EDC members, McClure said.
"Any funds that have gone into (Jackson Development) directly or indirectly have been EDC funds," he said.
"Both the EDC and JDC exist to help out the people of this county," he said. "I've spent the better part of my career helping people, and my goal is to do what's best for the county."
Airport Authority
According to Commissioner Eddie Madden, also a member of the airport authority, the authority was scheduled to convene at 6 p.m. Wednesday (Jan. 19) in Room 227 at the Justice Center with Clerk of Court Ann Melton presiding.
According to the group's by-laws, all members should have been sworn in, and Melton will swear in the remaining five members – Madden, Jim Rowell, Gary Buchanan, Chip Hall and Eldridge Painter.
Melton will preside because the authority does not have a vice chairman to step into McClure's former role, Madden said.
Madden said he does not anticipate any slowdown in the authority's current project, the addition of hangar space at the Jackson County Airport. A pre-bid conference has been tentatively scheduled for Monday, Jan. 24, he said.
Madden said he plans to ask for an audit of the authority's books.
"No one should object to that," he said.
Rowell, the authority's secretary-treasurer, said that to his knowledge the action the county took with regard to economic development has nothing to do with the airport authority "except that Tom is chairman."
"I don't know what this means, but it would be a shame to lose his leadership," Rowell said. "He's been a good airport authority chairman and a good leader. The future of the airport is brighter."
As for McClure, he said he didn't know if he would attend Wednesday's meeting.
"I'm not interested in being in an adversarial relationship with the county," he said. "I don't care if I'm airport authority chairman. My main concern with the airport is that it move forward, the hangar project be completed and the runway restored to its full length."
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