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Rural Center chairwoman defends severance account for CEO Hall

By J. Andrew Curliss
acurliss@newsobserver.com

The chairwoman of the board at the taxpayer-funded N.C. Rural Economic Development Center defends a quarter-million-dollar “severance” account for agency president Billy Ray Hall as one way the agency wanted to show appreciation for his work on behalf of rural areas.

Valeria Lee, the Rural Center’s chairwoman since 2009 and an executive board member for more than a decade, said in an interview she could not immediately provide specific details on the arrangement or what would trigger payments from the account, which was disclosed by state auditors in a report released Wednesday.

Gov. Pat McCrory, a Republican, has called for both Hall and Lee to resign following the audit that found inadequate oversight of taxpayer money by the Rural Center.

Rural Center officials have indicated Hall will respond in some way on Thursday. Lee said she could not immediately disclose her plans.

Rural Center board member Bob Luddy, who has been advocating for lawmakers to stop sending money to the agency, said he was inquiring about the severance account. He said Hall should not accept or receive the money should he go.

“He’s overpaid already,” Luddy said. “He has a retirement plan and now this would be dumping more money on him. And he’s done a bad job.”

Auditors wrote that the account was started in 2003 and has grown by $10,000 to $40,000 annually. As of June last year, the account had $241,856 in it, according to the audit.

It is on top of annual salary and benefits the agency paid to Hall. State auditors wrote Wednesday that Hall’s $221,000 salary, which included a car allowance, is “unreasonable” when compared with similar nonprofit presidents.

Lee said she recalled the severance account being created to keep Hall at the center.

“All along, the board looked at his performance every year and made a determination about his effectiveness as the CEO of the organization and the good work that was being done and tried to in some way, not only compensate him for what he had done, but to make sure that as he was looking at his future that he would always look at the Rural Center and keep it as a place he would want to stay and work,” she said.

Lee said she would “not be surprised” if some in the public see the account as inappropriate for an agency that highlights its many efforts to assist struggling areas.

The Rural Center claims to have created thousands of jobs through its grants made with money from the General Assembly. The center says, for example, that a $240,000 grant it made in 2006 created 210 jobs at the Walmart Supercenter in Cherryville, a city of about 6,000 northwest of Charlotte.

Lee, who was the Rural Center’s first vice-chair at the time the severance account was started, acknowledged it was money above and beyond Hall’s salary and retirement contributions, but she said it was “carefully considered.”

“We were just mindful of the contributions he had made, not just to the organization, but to the state of North Carolina and to the communities we were committed to serve,” she said. “And we wanted to compensate him appropriately for those contributions... It was a real carefully considered approach to his compensation and trying to respond to him in a way that showed appreciation for what he was doing and how effective he had been.”

Curliss: 919-829-4840
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