Media Misconceptions of LGC Purpose

In the August edition of the Carolina Journal front page article

August 13, 2007

HALIFAX COUNTY NC NEWS -- In what can be considered attempts to promote readership, we find more and more respected news media agencies fostering misconceptions of the purpose, responsibility and duties of government departments, boards and commissions. Recently, such an article was published confusing the reader of the purpose of the North Carolina Local Government Commission (LGC).

In the August edition of the Carolina Journal, the front page article, "Moore Knew About Parton Annual ‘Artist Fee' But his staff disputes as irrelevant findings of feasibility study." The Carolina Journal, is a well respected statewide monthly news journal published by the John Locke Foundation. The article is written by Executive Editor Don Carrington, and portrays the LGC as a state commission with the ability to defy the popular sovereignty of Roanoke Rapids in Halifax County, North Carolina.

In February, Roanoke Rapids approached the LGC for approval to use project development financing bonds for building the Carolina Crossroads Entertainment District, which is to eventually support 200,000-square feet of retail space, two hotels and the Randy Parton Theatre as the centerpiece. Roanoke Rapids wanted to finance $21.5 million for the construction of the Carolina Crossroads Entertainment District.

It should be known that the Treasurer is only one member of the LGC. Simply put, the purpose of the LGC can be divided into three duties. The first, is to ensure that North Carolina municipalities do not overextend themselves in debt, requiring the state to pay the defaulted balance. Next, if the municipality is capable of assuming the debt, the LGC takes responsibility for selling the debt on the municipality's behalf. Lastly, the LGC staff regulates annual financial reporting, annual auditing, and monitors the general fiscal health of local governments. One benefit the LGC offers, is assistance in financial administration to local municipalities who are willing to accept it.

The LGC are quite clear about its guidelines for cities and counties to follow when approaching the state for approval to use project development financing bonds to finance economic and community development projects. The LGC requirements include a feasability study of the purposed project and a public hearing to determine local community support of the project. Obviously, if the public supports the project, the LGC can confidently determine that the local taxpayers wish to utilize city or county tax revenue as collateral to cover the financing for a purposed project. Therefore, leaving the LGC to determine if the municipality can generate enough taxes to cover the project debt. Unlike a general obligation bond, project development financing pays the obligation by tax increment revenue. In other words, the additional property taxes resulting from the district's new improvements. Therefore, the LGC does not determine how the municipality should spend its tax dollars.

The Carolina Journal article begins by pointing out, "Staff members of State Treasurer Richard Moore acknowledged July 10 that Moore knew about Randy Parton's annual $1.5 million "artist fee" but disputed as irrelevant a key contention of a feasibility study regarding the arrangement to build with public funds a theater in Roanoke Rapids named after the entertainer."

( Man! That is a long sentence.)

Next, the article's author, Carrington, continues by expressing that Moore and his staff has avoided questions from the Journal, Moore is chairman of the LGC, and then gives some background on the Parton Theatre project and the purpose of the LGC. Carrington states, "The commission, whose staff is housed in the treasurer's office, must approve all city and county plans to borrow money." Followed by another one sentence paragraph saying, "Deputy Treasurer Vance Holloman and Debt Management Director, Tim Romocki, Moore staff members involved in the Parton Project approval process, acknowledged, when asked by Carolina Journal, that Moore specifically knew about Parton's annual fee before approving the project."

Carrington fails to point out that the State Treasurer serves as Chairman and selects the Secretary of the Commission, who then heads the administrative staff serving the Commission. When performing their duties for the State and Local Government Finance Division, both these gentlemen serve the LGC. The LGC is a commission of nine members.

• The State Treasurer
• The Secretary of Revenue
• The Secretary of State
• The State Auditor
• and five others by appointment (three by the Governor, one by the General Assembly upon the recommendation of the President Pro Tempore and one by the General Assembly upon the recommendation of the Speaker of the House).

Furthermore, in the article's following paragraph, Carrington writes: "CJ also asked them whether Moore was aware of a feasibility study that required 200,000 square feet of retail space and two hotels first to be built in place for the theater to succeed." Holloman and Romocki would not answer the question and suggested the requirement was irrelevant."

The Carolina Crossroads Entertainment District application was approved months ago by the LGC. It is unreasonable for Carrington to expect Holloman and Romocki to remember such intricacies of the feasibility study off the top of their heads, much less to answer a question that should be directed toward the Treasurer himself, which they shrewdly did not. Second, how Roanoke Rapids is to carry out the construction of Carolina Crossroads Entertainment District is irrelevant to the LGC's decision. Their purpose is to ensure the applicant municipality has the ability to generate funds to pay the project's debt and to ensure the people of Roanoke Rapids support the endeavor. If the LGC, is to start denying approvals because they personally believe projects are poor investments for communities, they would be obstructing the popular sovereignty of the applicant municipalities. Therefore, they would be denying the constitutional rights of the people of those localities.

Carrington, later in the article writes, "A lot was riding on Moore's approval of the project. If the public financing had not been approved, the private developer, B&C Roanoke LLC, would have had to obtain private funds for the long term financing of the facility."

Combing these two sentences above, Carrington appears to be attempting to correlating Moore's approval of the project as the deciding factor for the approval of the entire LGC. If interrupted in this manor, the correlation would be false. Remember, the LGC are a commission of nine members who each cast a vote to approve or deny applicants permission to use city or county tax revenue as collateral to obtain financing for a purposed project.

The article continues by discussing the Theater, the feasibility study, a fund-raiser sponsored by Roanoke Rapids for Moore's 2008 candidacy to run for governor. Interestingly, toward the end of the article, Carrington writes of how the Haifax County Convention and Visitors Bureau Executive Director, Lori R. Medlin, solicited invitations to the Fund-raiser using her government email account. Unfortunately, Carrington abruptly ends the article with no conclusion.

It should be noted that Don Carrington did write an excellent article on the third page of the August issue of the Carolina Journal, titled, "Parton Theatre Financial Statements ‘Trade Secret'" The article outlines how Roanoke Rapids City Manager Phyllis Lee violated the public records law by refusing on July 23, to release Randy Parton Theatre quarterly financial records, which she received from the company.

Returning to the original issue, news media agencies are fostering misconceptions of the purpose, responsibility and duties of government departments, boards and commissions to promote readership. In my opinion, Carrington is attempting to use the LGC and Moore to expand his article into a statewide issue when in reality the progress and development of the Carolina Crossroads Entertainment District is the responsibility of Roanoke Rapids local government. Roanoke Rapids entered into contract with B&C Roanoke LLC, the developer of the project. Therefore, the success and progress of the Carolina Crossroads Entertainment District is not the responsibility of the LGC. Their responsibilities were met when determining whether Roanoke Rapids could generate enough tax revenue to use as collateral to cover the debt. This article published by the Carolina Journal is just one example of today's media spreading misconceptions of the duties government departments and commissions. Articles, such as these do nothing but foster mistrust and confuse a person's sense of reality. That is why it is of utmost importance that North Carolina citizens realize they have an obligation to their community to participate and educate themselves in the process and actions of their local and state governments. Clearly, if the people of Roanoke Rapids and Halifax County had taken time to examine the contract between the city and the developer, someone may have noticed there was no clause requiring the construction of the hotels and retail complex before the theater.

Published by:
Rob Cross
mailto:editor@357news.com

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