What does it take for NC to seize control of a city? This town may soon find out.
Earlier this month, investigators arrived in a small town just outside Fayetteville. They shut down city hall, kicking out the staff and locking the doors.
Officials from both the state and the town, Spring Lake, have been tight-lipped on what’s going on. But N.C. Treasurer Dale Folwell did tell The News & Observer’s news-gathering partner ABC11 recently that N.C. Auditor Beth Wood is looking into allegations of taxpayer money that has gone missing.
The town also faces separate accusations of having poorly managed its budget and finances for years — to the point where, on Monday, Folwell announced that the state can and will take over control of Spring Lake if needed to balance the budget, or if officials try to obstruct Wood’s investigation.
It’s a show of bipartisan concern over the town’s future. Wood is a Democrat and Folwell a Republican.
In addition to leading the state treasury, Folwell also chairs the Local Government Commission. Its members voted Monday to issue an ultimatum to the town about potentially taking over its finances, Folwell said in a press release, citing “concerns over potential budget deficits, longstanding fiscal disarray and an investigation into missing money.”
Transit cuts could diminish access to COVID vaccine
An hour’s drive south of Raleigh, located on the border between Cumberland and Harnett Counties and just outside Fort Bragg, Spring Lake is a town of about 12,000 people.
Home to a large number of current or former Fort Bragg soldiers and their families — and many other families who have been there for generations — it’s among the most diverse places anywhere in the state. The town is 38% white, 37% Black and 16% Latino. It’s also a poor area, where home values and incomes tend to be thousands of dollars below what’s typical statewide, according to U.S. Census data. More than one in five people live in poverty.
With a small tax base, money issues can amplify for local governments. Town leaders are now looking at not being able to fill empty jobs in the police department, WRAL reported, and they’re talking about other cuts, like to their public transit program.
In a recent meeting, town officials raised concerns about those transit cuts making it harder for locals to access COVID-19 vaccines. They also debated future spending issues, like whether the town should keep paying for maintenance at a local cemetery. Officials think it might actually be owned by one or more local churches, not the town. But in the past, the town has done work like reburying coffins that came out of the ground due to flooding.
“We don’t want bodies floating around down the road because nobody’s doing their due diligence,” Alderwoman Jackie Jackson said.
But one thing they didn’t discuss during the town officials’ meeting was the investigation into allegations of missing money, or the threats from the state to potentially take over their financial decision-making altogether.
Town leaders silent about investigation
The vote by the Local Government Commission to threaten a takeover came Monday. Later that evening, the Spring Lake Board of Aldermen held a regularly scheduled meeting but did not publicly address any of the issues surrounding the state’s growing concerns.
Two members of the public spoke during the meeting. But once they finished, town leaders moved on to other matters. Neither Mayor Larry Dobbins nor mayor pro tem, Taimoor Aziz responded to The News & Observer’s request for comment Tuesday.
One of the speakers was James Christian. He had been an alderman himself for a decade until he lost re-election in 2019 by a single vote, The Fayetteville Observer reported. On Monday he accused the current board of acting unethically and trying to hide the situation from the public.
“We have not acknowledged it or addressed it, and people deserve to know better,” Christian said.
The other speaker, Betty Sanford, said the town has a homelessness problem, poorly maintained roads, issues with the sewer system and other items to address.
“We need to get it right, get the money back from whoever took it,” she told them. “Because someone took it, you understand me?”
Wood, the N.C. Auditor, has not said how much money is believed to be missing from the town, or who might be suspected of taking it. Her office has not published any findings or updates.
Misspent money, failure to collect revenue
State leaders have also raised concerns about poor financial decisions in general.
Unlike the federal government, the state government and local governments in North Carolina must pass balanced budgets. But Spring Lake, the Fayetteville Observer reported last month, originally proposed spending around $1.2 million more than the town can afford — although they did later pass a budget with cuts that leaders said should be enough.
This year isn’t the first time Wood’s office has raised concerns about taxpayer money being mishandled in Spring Lake.
In 2016, she published an audit that found dozens of town officials and staffers had potentially misspent nearly $500,000 over the previous three years, through questionable purchases with town-issued credit cards. Specifically, she found $366,000 in spending that violated town policies and another $122,000 that might have.
“Even after becoming aware of questionable purchases, the mayor, former town managers, and former finance directors failed to maintain adequate oversight of procurement card purchases,” that 2016 audit said.
Spring Lake had also failed to collect over $90,000 in revenue it was owed, because of poorly trained staff making billing mistakes, that 2016 audit found.
The mayor at the time, Chris Rey, wrote to Wood that he accepted the audit’s findings and that the town had already started addressing several of the problems identified. Rey would be out of office the next year, however. He had run unsuccessfully for U.S. Senate earlier that year and didn’t seek re-election as mayor in 2017.
For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at link.chtbl.com/underthedomenc or wherever you get your podcasts.
This story was originally published July 28, 2021 at 6:15 AM with the headline "What does it take for NC to seize control of a city? This town may soon find out.."
