Haywood County commissioners this week gave their blessing to a $10 million line of credit for the MedWest-Haywood hospital, ending a delicate dance in the finer points of contract law that has spanned the past three months.

The loan was needed to solve a serious but short-term cash flow crunch brought on by a concatenation of unexpected costs. MedWest-Haywood had turned to the powerhouse of Carolinas HealthCare System, a network of 34 hospitals that Haywood is part of, to help bridge the gap.

The status of the loan has been in limbo, however, as county commissioners wrestled with whether to allow MedWest-Haywood to put up the hospital building as collateral. While highly unlikely, if the hospital failed to pay back the loan it could be foreclosed on. The worst-case scenario concerned county commissioners, preventing them from initially signing off on the loan.

Without commissioners’ blessing, the loan was in limbo. The county’s measure of control over the hospital building dates back to its original status as a public hospital — a status county commissioners felt compelled to protect.

Commissioners finally arrived at a series of caveats that would allow the loan to go forward.

“It protects the county’s interest but allows for a way forward for the hospital,” County Commission Chairman Mark Swanger said.

Commissioner Mike Sorrells agreed.

“We wanted to provide the hospital with the means to get over get over this bump in the road, as it is being called, but continue to maintain a viable county hospital,” Sorrells said.

MedWest-Haywood CEO Mike Poore said the hospital is not in dire financial straits, but it is operating under austerity measures and has been forced to lay off some employees as it regains its footing from a series of set-backs.

Poore pointed out that the $10 million loan is the only debt the hospital has — compared to its annual operating revenue of $110 million and a building worth $70 million.

“To have an organization with that little debt ratio in today’s world is really amazing,” Poore said.

Collateral with caveats

Swanger stressed that the process has in no way been adversarial between the county and the hospital.

“I think I can speak for everyone up here when I say we want the hospital to succeed and thrive,” Swanger said at a county meeting this week. “We have an obligation to protect the county’s interest and taxpayers’ interests, but the process of doing that has not been adversarial.”

Poore said he would “echo that.”

“The commissioners have been asking the right questions and doing their fiduciary responsibility, but the whole time the interest is how can we help our hospital along,” Poore said.

Specifically, the county agreed to let the hospital put its building up as collateral if the county is given the first right of refusal, so to speak. Should the hospital default on its loan, Carolinas HealthCare System could not foreclose without coming to the county first.

The county would be given the option of paying off the loan itself. The hospital would then be on the hook with the county to pay back the loan rather than to Carolinas.

“Should there be a default rather than just a normal foreclosure, they first have to give the county notice,” explained Haywood County Attorney Chip Killian. “The county has six months after that notice to kind of figure out what they are going to do — to decide whether they want to purchase the note and in fact be the lender instead of Carolinas.”

If the county indeed decides to bail the hospital out, it would have another 12-month window to put together a financing deal to “satisfy and cure the default.”

The caveats written into the loan drew on the best contract-writing skills Haywood County Attorney Chip Killian could muster.

“There is a lot of legalese in this document, but I had to craft this out of whole cloth because I had never seen anything like this before,” Killian said.

A ‘perfect storm’

Poore said that the need for a loan isn’t a sign of financial insecurity.

“We had several events that were what I would describe as a perfect storm of cash issues,” Poore said. “The clock ran out on us. There were too many things that hit us at the same time.”

MedWest-Haywood had to spend $1 million to replace a broken generator, $1.6 million on a wrongful firing lawsuit by group of emergency doctors and $8 million on a new computer system to handle electronic medical records.

The hospital also spent an undisclosed sum in the past year buying up private doctors’ practices that were being courted by Mission Hospital in Asheville. MedWest-Haywood feared long-term repercussions of a patient drain if it didn’t make a competing offer.

“It is a lot more complicated than ‘the hospital is in some economic trouble,’” said County Commissioner Kirk Kirkpatrick said. “There have been a lot of hurdles we have had to get over. I hope we are at the point we are making that turn.”

Meanwhile, however, the hospital has already spent $7 million of the $10 million loan. Carolinas Health System had already extended the loan to MedWest-Haywood — and Med-West Haywood had begun spending it — before they realized the county’s blessing was needed for the collateral.

Carolinas could have retrenched and frozen the line of credit when the county didn’t promptly sign off. Instead, Carolinas allowed MedWest-Haywood to keep spending against the line of credit, allowing the balance to grow to its $7 million mark.

Two well-known Waynesville Democrats running against each other for a shot at representing mountain people in Raleigh so far are playing fair and keeping the race clean.

But their similar platforms, progressive rhetoric and measured campaigns mean voters deciding between Joe Sam Queen and Danny Davis will likely be left to size up the man behind the race rather than the policies they stand for.

“There is little he wouldn’t say in his stump speech that I wouldn’t say ‘Amen’ to,” Queen said of Davis. “This is a Democratic primary, and Democrats have to choose among their friends. I have heard ‘I like you both’ more than once.”

The two men are vying for a seat in the N.C. House of Representatives representing Jackson, Swain and the greater Waynesville and Lake Junaluska area of Haywood County. The winner will run against Mike Clampitt, a Republican from Swain County, come November.

The seat suddenly came open this year when Rep. Phil Haire, D-Sylva, announced he would retire. Haire has served seven terms. Queen and Davis quickly emerged as Democratic contenders following Haire’s decision.

Both men lament the budget cuts witnessed under Republican leadership as being too harsh and decry Republican leadership for taking the state in a regressive direction.

But those arguments will play out in excruciating detail come the general election in November when facing an opponent from the other party. For now, in this civil race between two Democrats, Queen and Davis are left trying to convince voters they have the experience needed to get the job done.

Davis spent 26 years as a District Court judge in the seven western counties, what he calls a “front row seat” on the issues affecting people’s lives.

“There is no better training than being a District Court judge when it comes to seeing the problems people in our community face,” Davis said. “If there is a new drug on the street, we are the first to see it. If the economy is bad, we are the first to see it. People lose their jobs and can’t pay their child support.”

Davis has even witnessed the struggle over health care, when people’s insurance runs out, and they turn to credit cards to pay medical bills only to end up with collection agencies after them.

“I wish members of the General Assembly could come to court and see how people really live,” Davis said. “What they do down there has repercussions.”

Meanwhile, Queen, an architect with a side business managing a vast inventory of rental property, points to his six years spent in Raleigh as a state senator.

Queen said it’s easy for first-time candidates to draft legislative wish lists and sweeping campaign platforms. But once in Raleigh, reality sets in, something he learned the hard way his first time around.

“I have been proud, forceful and green before, and you don’t get much done,” Queen said. “I got my pocket picked plenty. There is a learning curve. Experience matters.”

Queen lost his seat in the Senate in 2010 after several hard-fought elections that saw the seat flip-flop back and forth between Queen and his Republican opponent each election cycle. Thus, his six years in Raleigh were served intermittently during the course of the past decade. Nonetheless, Queen said he can get right to work for the region thanks to the experience and relationships he’s already built in Raleigh.

“I know where the landmines are and how difficult it is to pull things off,” Queen said. “We need to have experienced legislators serving us because you get better every year. That is just a fact.”

But, Davis isn’t easily assuaged.

“I don’t think I will miss a beat when I go down there,” Davis said. “I think my experience as a judge gives me instant credibility. I think I have a much stronger background thinking through how legislation is going to affect people.”

Davis says he is familiar with the legislative process and has honed the art of approaching problems with critical and rational thinking.

“Having to sit down with folks and say, ‘Here’s where we are and here’s where we need to get,’ it doesn’t mater if you are a judge or a legislator, the art of negotiating is the same,” Davis said. “I think the best thing I have learned from being a District Court judge is how to listen. No one is ever 100 percent correct, and no one is ever 100 percent wrong.”

Davis also points to the decorum it takes to run a courtroom in a civil, respectful manner while still staying in charge.

Queen countered that his experience doesn’t stop at the steps of the legislative building, but he knows what it means to work in the private sector business world.

“I am an architect, a farmer, a businessman. I have employees and make payroll and deal with business cycles,” Queen said.

Do or die county

While Queen and Davis are both from Waynesville, the race will likely be fought and won in Jackson County — clearly the largest bloc of voters compared to much smaller Swain County and the fraction of Haywood that lies in the district.

Jackson accounts for half the likely voters who will cast ballots in the race. Swain accounts for less than 20 percent. Haywood’s partial territory accounts for slightly more than 30 percent.

The breakdown, an analysis by Queen, factors in registered Democrats as well as unaffiliated voters who typically vote in the Democratic primary.

Davis believes he has strong name recognition in Jackson County, where he served for two-and-a-half decades as judge, a post that spanned all seven western counties. Likewise, he has been serving in Cherokee as one of the three justices on the Cherokee Supreme Court and as a substitute tribal court judge.

Queen said his name is known outside Haywood from his years in the state Senate. Even though his Senate district extended to the north and east of Haywood — and did not include Jackson or Swain — his name was still out there. Queen said he partnered with other mountain legislators to get regional projects accomplished, including initiatives in Jackson even though he technically didn’t represent that county in the senate.

But to make sure, Queen is campaigning heavily on the ground in Jackson and Swain counties. He is pulling out all the stops with a series of meet-the-candidate events, complete with free food and a line-up local bluegrass bands at each. His events have run the gamut from a waffle brunch at an outdoor park in Sylva to an upscale restaurant in Cashiers.

“I have really enjoyed this primary. It has been fun, and I try to make it fun,” Queen said. “I try to have good music, good food and a good vision — the vision excites people.”

The kind of campaign Queen is running also takes money, between hiring bands and feeding anyone who shows up. Queen has a history of tapping his personal finances, spending well over half a million of his own money his later Senate campaigns.

Davis is hosting two campaign events compared to Queen’s eight.

Primary factors

There’s more than sheer population that makes Jackson a heavy-hitter in the Queen-Davis race.

Jackson County might see higher voter turnout than its neighbors thanks to a ballot measure on whether to legalize alcohol sales countywide (see article on page 12).

Democratic voters in Jackson County also have a primary contest for county commissioner, unlike Haywood or Swain.

It’s hard to predict what kind of voter turnout Davis and Queen can expect. Primaries generally don’t draw a lot of attention.

While there’s not likely to be nearly the interest as in 2008 when Hillary Clinton and Barack Obama were duking it out in the Democratic primary, it’s not exactly a sleeper either.

For starters, there’s the referendum on a constitutional amendment that would ban same-sex marriages and civil unions that is bound to turn out voters who otherwise would sit out the primary.

Democrats also face the task of picking their nominees to run for governor and congress, in the wake of the political retirement of Gov. Beverly Perdue and Congressman Heath Shuler.

Do I vote in this race?

Yes, if you live anywhere in Jackson and Swain counties. Also yes, if you live in the greater Waynesville area, Lake Junaluska or Iron Duff in Haywood County.

The answer gets tricky if you live in Maggie Valley, as the Ivy Hills precinct lies in two different N.C. House districts. The best bet for Ivy Hills voters is to call the board of elections at 828.452.6633 and ask them to check your address. But as a rule of thumb, the Dellwood area of Maggie votes in this race. Residents of Maggie Valley proper and Jonathan Creek do not.

The primary is upon us

The Smoky Mountain News begins an information-packed month of election coverage this week. Stay tuned for coverage of county commissioner races, U.S. Congress, the same-sex marriage amendment and Jackson County’s alcohol vote.

Early voting starts April 19. Election Day is May 8.

Voters can cast ballots in either the Republican or Democratic primary but not both. Unaffiliated voters can chose which party’s ballot they want when they show up to vote.

A Maggie Valley man wants to extract himself from the town limits, claiming the services he gets from the town don’t warrant the taxes he pays.

He stands to save $2,450 a year in town property taxes if successful in wresting his three-acre gated mountaintop tract out of Maggie Valley’s town limits.

Joe Manascalco has cleared the first hurdle in the two-step process. He won support from a majority of Maggie Valley town leaders to remove his property from the town’s borders. Redrawing the town limits to de-annex someone’s property also requires a special vote of the General Assembly in Raleigh, a step Manascalco must tackle next.

Maggie leaders were narrowly split on the issue when it came before them last month, approving the request by a 3-to-2 vote.

Mayor Ron DeSimone thinks the vote to de-annex Manascalco was bad policy. DeSimone called the decision “nebulous, contradictory and inconsistent.” DeSimone believes the aldermen who went along with Manascalco’s request did so because of their philosophical views concerning annexation rather than the facts of Manascalco’s actual situation.

“There is a big difference between agreeing or disagreeing with forced annexation and going back and dismantling something that was done,” DeSimone said.

DeSimone said it also opens the doors for other residents to ask to be de-annexed.

“I think it was a mistake,” he said.

DeSimone warned the board they would be opening Pandora’s box by granting Manascalco’s request.

Indeed, two more residents have stepped up in the past month asking to be de-annexed as well. One appeared simply to be making a point by putting forward a tongue-in-cheek request. The second had originally asked to be annexed in order to get on town sewer, but once they got on the sewer lines, wants to be de-annexed.

But Alderman Phil Aldridge, who supported Manascalco’s request, said the town would just have to “weed out” the illegitimate ones as they come in.

In Manascalco’s case, Aldridge believes he was wrongly brought into the town limits in the first place. It is at the top of a steep, one-lane road and is difficult to provide services to.

“The road will never meet the town’s standards. When a snow plow or garbage truck goes up that road, it has to back all the way back down,” Aldridge said.

Aldridge agreed with DeSimone on one front: he isn’t a fan of forced annexation.

“I have always been against forced annexation,” Aldridge said.

Aldridge questioned whether the town annexed Manascalco because it saw dollar signs.

“That’s the $64,000 question,” Aldridge said. “Quit taking in these areas just because they have a half-million home on them.”

The rest of the subdivision where Manascalco lives, Evergreen Heights, was annexed into the town limits at the same time.

“When we annex subdivisions, it is usually the entire subdivision not just part of the subdivision,” said Town Manager Tim Barth.

A tale of annexation

Manascalco’s property hasn’t been in the town limits long. His property was brought into town in 2009 as part of a large-scale annexation. Seven different residential pockets and subdivisions — totaling 166 acres and more than 130 homes — were part of the annexation that year.

Barth said the goal of the 2009 annexation was to bring those who were already on town sewer officially into the town limits.

“The request was to try to annex as many of the people who had sewer as possible,” Barth said.

Aldridge said simply being on town sewer isn’t justification to annex someone. There are 400 people on town sewer that aren’t in the town limits, and the town isn’t going after those people, Aldridge said.

Manascalco’s property is known locally as “the compound.” He lives at the top of a mountain, up a one-lane road that dead-ends at a gate across his driveway. Two pillars flank the road on the approach to his property, with a sign on one alerting people they have entered a private drive.

There is nowhere to turn around without going through the gate, so the town’s trash truck had to back down the road after reaching his gate. The trashmen didn’t have a problem doing that, Barth said.

But, Manascalco said he didn’t think it was safe and told the town to stop picking up his trash last year.

“He said he didn’t want garbage service,” Barth said.

The town offered to have trash trucks come through the gate and turn around, but Manascalco didn’t want to provide a key.

DeSimone found it ironic that Manascalco canceled town trash pick-up then complained he wasn’t getting town services.

When DeSimone drove up to Manascalco’s property to get a lay of the land before voting on the issue, he encountered a propane truck — backing up no less.

“This is the mountains,” DeSimone said. “People have to back up all over the place.”

Town snowplows did not plow the road because it was considered a private street, even though it was in the town limits.

In addition to trash pick-up, being a town resident gets you police protection, which Manascalco will continue to receive even if he isn’t on the tax rolls.

Technically, property outside the town limits is under the jurisdiction of the county sheriff’s office. But if there were an emergency, Maggie town cops would respond since they are naturally going to be closer.

Annexation a can of worms

Ultimately, Manascalco’s de-annexation claims come down to a technicality.

The town only can target urban or suburban areas for annexation. Annexed areas essentially must be meet the definition of being “in town” — as opposed to farmland or large empty tracts.

There’s a litmus test to ensure towns don’t unfairly target large tracts, simply sucking up property taxes without providing services to many residents in return. The law says 60 percent of both the total area and total number of tracts being annexed have to be fewer than three acres.

At the time Manascalco’s property was annexed, it was listed as three separate lots, each a little more than an acre.

But he believes his property should have been considered for annexation purposes as a single lot of 3.5 acres rather than three separate ones.

“He believes, even though they weren’t combined at the time, they should have been considered one lot because he owned all three of them and had no plans to sell any of them,” Barth said. “But we don’t know that and didn’t know that at the time.”

DeSimone doubts Manascalco’s chances of getting a de-annexation bill passed in Raleigh are very good. A bill would have to be introduced and passed in both the state House and Senate in order to go forward. Whether legislators from the mountains would be willing to expend their political capital to rectify Manascalco’s plight isn’t known.

“That is not likely to happen. These bills have been somewhat cantankerous,” DeSimone said.

Maggie Valley has steadily increased its town limits during the past three decades. In the 1970s, Maggie Valley was nothing but a strip of motels, restaurants and gift shops — the town limits draw like a long skinny snake along the main commercial drag. It had only a few dozen actual residents.

But as mountainside subdivisions sprung up around Maggie, giving rise to both a seasonal and year-round population, the town limits expanded to bring the newfound residential population into its fold.

The way town leaders saw it, the town’s infrastructure was being maxed by the burgeoning residential population cropping up all around it but not contributing their fair share through property taxes.

The annexations were nearly always fought by residents who thought they were getting a raw deal. The town services they got weren’t worth the taxes they paid, opponents claimed.

DeSimone’s own neighborhood was annexed into the town limits of Maggie Valley during the past decade. DeSimone said the majority of those in his subdivision are now glad they are in the town limits, however.

De-annexation request follows small campaign contribution

Two Maggie Valley aldermen who voted to de-annex Joe Manascalco had gotten a modest campaign contribution from him in the last election.

Aldermen Phil Aldridge and Phillip Wight voted to de-annex Manascalco after receiving a $200 shared campaign contribution. The contribution was also to be shared by Mayor Ron DeSimone, although he voted against Manascalco’s request when it came up last month.

Manascalco had donated $200 to Aldridge, DeSimone and Wight in the fall election. The three ran as a team, putting all three of their names on signs and brochures.

While Manascalco gave the $200 to Aldridge, according to campaign finance reports filed in the Haywood County Board of Elections office, it was shared equally by the three for campaign literature.

“Joe said, ‘Make sure everybody gets this.’ It was all put into one pile and shared in one kitty,” Aldridge said.

Aldridge said the political donation from Manascalco played no role in how he voted on the de-annexation.

“It was $200,” Aldridge said, pointing out the sum is way too small for anyone to honestly think it could be considered a bribe.

Aldridge said he “honestly felt in my heart” that Manascalco had been treated unfairly four years ago.

The donation obviously didn’t influence DeSimone, since he voted against Manascalco’s request.

This is not the first time Aldridge and DeSimone have been at odds after having run on the same ticket.

In the coming months Lake Junaluska residents will weigh in on whether to become part of the town of Waynesville.

For Waynesville, the move could mean a million or more dollars in additional property taxes each year and the benefits of being a larger and possibly stronger town.

For Lake Junaluska residents, the daily logistics of running a community of 800 homes could be placed in accomplished hands. And perhaps most importantly, the burden of repairing the community’s aging water and sewer lines would be punted to Waynesville.

But, there are downsides, too. Lake Junaluska residents could lose autonomy and identity. And, Waynesville may not want the hassle of managing Lake Junaluska’s infrastructure if it would cost more than the town stands to reap in new property taxes.

“It appears on the surface to be a win-win, but how much? How much to provide the services?” wondered Waynesville Alderman Wells Greeley during a discussion on the idea at a town board meeting last week.

Discussion of the issue is in its earliest stages and will take months to explore.

“This decision is going to impact Haywood County for the next 100 years and beyond, so we want it to be in all of our best interests,” said Jack Ewing, the CEO of Lake Junaluska Conference and Retreat Center.

While Lake Junaluska is not an official town, the community already looks and acts like one. It has its own trash pick-up, water and sewer system, street maintenance and even security force. The roughly 800 homes that make up Lake Junaluska’s residential community pay a yearly fee for those services.

The idea of merging with Waynesville comes as Lake Junaluska residents stare down the growing problem of aging water and sewer lines.

“The community will need to decide whether they would like to bear that burden alone, or as part of a larger group,” according to a report by a consultant hired to analyze the pros and cons.

The idea of merging with Waynesville was borne out of that reality.

Lake Junaluska Assembly hired a consultant to study the issue and prepare a report outlining various options — merging with Waynesville, forming its own town or remaining as it is now.

Ultimately, the decision will rest with Lake Junaluska’s residents.

“Each option has some advantages and disadvantages,” said Ron Clouser, president of the Lake Junaluska Community Council. “I would hope that people would have an open mind and take time to read the study and see what it proposes.”

Ewing said leadership at Lake Junaluska is not endorsing any option and has no preconceived notion about which course is best.

“Over the next three to six months, there will be multiple opportunities for people at Lake Junaluska to provide input on these options,” Ewing said.

Down the road there could be a vote to gauge residents’ opinions.

Clouser said he wouldn’t want to factionalize residents by moving forward without a “practically unanimous” consensus.

“I don’t want to see us go down a road that has a split with anybody,” said Clouser, one of seven members elected by homeowners to lead their residential community association.

Ewing shared the consultant’s report with Waynesville leaders at their town board meeting last week. Ewing told the five town board members they will obviously need to embark on a fact-finding mission of their own.

“You may say, ‘No, we are not interested in partnering with you in that way,’” Ewing said.

Which is cheaper?

One question that will likely weigh heavily in the decision is cost: Will residents of Lake Junaluska pay more in property taxes than they would in annual fees?

Currently, the town’s property tax rate is 40 cents per $100 of property value. That’s more than what Lake residents currently pay in fees, set at 28 cents per $100 of property value.

But, that fee is bound to go up if the lake has to tackle its water and sewer problems on its own. By how much is not yet known, however, thus making a true dollar for dollar comparison impossible right now.

“Property owners want to know is this going to cost me more or is it going to save me money,” Ewing said. “The report is intentionally silent on finances. It is important, but we didn’t want people to begin with ‘what is the cheapest option for me, and I like that option best.’”

Indeed, that’s not the only issue that will weigh on residents’ minds, Clouser said.

“I think it is going to be more complicated than that. I think it will be more than just an issue of that number,” Clouser said.

What may be more important to residents is how their community character and identity could be impacted. Lake Junaluska has a 100-year history, and residents who cherish that may not want to place their future in someone else’s hands.

“There is a track record of what it means to live at Lake Junaluska. That is an issue at this point,” Clouser said.

Waynesville has a track record of its own: one of bringing independent communities into its fold. The neighboring town of Hazelwood merged with Waynesville two decades ago, but Alderman Gary Caldwell says it didn’t lose its identity.

“Hazelwood will always be Hazelwood and Lake Junaluska will always be Lake Junaluska,” Caldwell said.

Yet Clouser said Junaluskans have a deep sense of pride, both emotional pride in where they live and financial pride in taking care of their own.

Ewing agreed.

“One of the issues our residents are going to talk about is their desire for independence,” Ewing said “Many people may wish to stay the way we are.”

But, there’s a caveat. A true “status quo” simply isn’t an option, he said. Residents must understand “the responsibility of going it alone when it comes to upgrading our infrastructure,” Ewing said.

This is where Waynesville may prove its mettle.

“Waynesville is better resourced to address the needs of the Lake Junaluska community, such as replacing the water and sewer infrastructure, the capital equipment of Lake Junaluska and paving the roadways,” the consultant’s report states.

But, joining forces with Waynesville has other perks as well. Simply put, Waynesville is seen as a quality-run town.

“Waynesville already has a well-established, successful, and relatively progressive governance structure,” the consultant’s report states. “They have established a culture of efficient, effective, and professional administration that has not yet been created at Lake Junaluska.”

Sister communities

Waynesville leaders, meanwhile, have to figure out the financial pros and cons of the different options.

“My original reaction is there is a distinct opportunity for the town of Waynesville. The question is, is it cost effective?” Mayor Gavin Brown said.

While the extra property tax looks good on paper, the town would have to hire additional trash crews, police officers and street workers to take on such a large new area.

But, the cost of repairing the lake’s water and sewer system will be the kicker. If it appears that it will cost more than the town is getting in return, the town could temporarily impose higher property taxes on residents of the Lake than the rest of town.

“If there is a need to bring a certain system up to code, they can charge a higher rater to that specific area for a set period of time,” said Andrew d’Adesky, a graduate student with the Institute of Government at UNC-Chapel Hill that prepared the study on behalf of the Lake.

The town, like the residents of the Lake, has more to consider than just economics. Waynesville and Lake Junaluska are kindred spirits in some ways, both forward-thinking communities on each other’s doorstep. Waynesville Alderman Leroy Roberson said the two have a cross-over relationship.

“There is a mutual community,” Roberson said.

Bringing Lake Junaluska into the town’s fold could be a once in a lifetime opportunity to forever change the town’s course in a positive way, Brown said.

“It would be a nice addition to the town of Waynesville,” Brown said.

But, the town must also ask whether it is worth the hassle. Lake Junaluska is three miles from downtown. Can the town afford to have its attention diverted when there are existing parts of town that need attention?

“Should we add another issue to the town’s plate? Would we spread ourselves too thin?” Brown asked.

Waynesville could also enjoy the benefits of a simply being a larger town.

Lake Junaluska community has around 800 homes — about half are seasonal homes, the other half are lived in by year-round residents. Waynesville’s population of 10,000 would increase by at least 10 percent.

That could mean benefits beyond the obvious increase in property taxes. There are numerous slices of state revenue that towns get based on their population — from a cut of sales tax revenue to street and sidewalk funding.

Bigger population numbers also carry bigger clout, which can come in handy when recruiting businesses or lobbying for the town’s interests in Raleigh.

Lake Junaluska: past and present

Lake Junaluska began as a religious community more than 100 years ago, and as a summer retreat for the United Methodist Church. Pastors, bishops and other church leaders founded the Lake Junaluska for religious gatherings and conferences in 1908.

Almost immediately, they began building summer homes there for their families to escape the heat of the South and a like-minded community quickly built around the Methodist Church retreat.

Lake Junaluska is no longer a private Methodist community. Anyone can buy a home and live there, and it is no doubt the lake community is growing increasingly secular.

But, its roots in the Methodist church have hardly disappeared. Many homes have been passed down through the generations. Children with fond summer memories of the lake came back to live permanently. Lake Junaluska also is a hotbed of retired pastors and bishops. The grounds of the conference center, which dominate the main campus around the lake shore, bustles with conferences and retreats throughout the year.

More than a year has lapsed since 15-month-old Aubrey Kina Marie Littlejohn died on the floor of an unheated single-wide trailer in Cherokee one frigid January night, but it could be several more months before the state conducts a child fatality review required by law in such cases.

Swain County Department of Social Services alerted the state to the suspicious child death the day after Aubrey died in January 2011, but the mandatory case review hasn’t been started yet because of a statewide backlog. The N.C. Department of Health and Human Services formally accepted the case for a child fatality review last April, but the review has not been scheduled yet, according to Lori Watson, a spokesperson for the state agency in Raleigh.

Ideally, a child fatality review can help prevent future tragedies. It is supposed to detect where social safety nets failed and whether there are cracks in the system that need fixing.

In Aubrey’ case, it seems there will be plenty to learn from such a review. Cops, neighbors, family members and social workers all came in contact with Aubrey’s caretaker and noticed red flags, from violent behavior and suspected drug use to poor living conditions and even visual signs of abuse.

The child fatality review is not intended to find fault, nor is it a witch-hunt to hold anyone responsible, Watson said. The state in particular is interested in whether new policies or protocols could have saved the child’s life.

It is a learning exercise that taps the insight of anyone who may have interacted with the child — teachers, daycare workers, pediatricians, friends, family and social workers — to determine what could be done differently in the future.

“They will bring all those people together that had been involved in that child’s life,” Watson said.

By design, the case review isn’t conducted on the heels of a child’s death.

“They try to plan them so they give the community an opportunity to heal and people can come back to the table and take an objective approach to looking at the case,” Watson said.

But, a year and counting is longer than it should be in an ideal world. It could be several more months yet before it is conducted.

Watson said the agency is facing a backlog of its child fatality reviews. Watson cited staff turnover and unfilled positions at the state level as reasons the agency got behind.

The child fatality review will likely determine why social workers had forcibly removed other children from the home where Aubrey was living but allowed Aubrey to stay. Social workers had documented inappropriate use of physical discipline against Aubrey when she was just a year old. In addition to bruises on Aubrey, there were also signs she wasn’t developing like a baby of her age should, but she was not being taken to the doctor for check-ups.

Cops had been to the residence multiple times, according to dispatch records. Neighbors witnessed violent behavior in the yard of the home and noted children fending for themselves.

Swain DSS records in baby’s death to remain sealed

Prosecutors in a second-degree murder and felony child abuse case in Swain County have sealed social service records for fear they could compromise the on-going investigation or the ability to prosecute the case.

Prosecutors have told the Swain County Department of Social Services not to release records that would normally be made public surrounding the death of 15-month-old Aubrey Kina-Marie Littlejohn, who died more than a year ago. Ladybird Powell, Aubrey’s great-aunt and caretaker, was charged in connection with her death this month.

Since DSS records are highly personal — often revealing private aspects of family life, emotional state and financial status — they are all confidential.

There is an exception, however, when criminal charges surround a child’s death. In such cases, DSS is supposed to release a summary of the agency’s involvement with the child, describing whether social workers had the child’s well-being on their radar and what steps, if any, were taken to investigate or improve the child’s safety and care.

The district attorney’s office has the authority to block the release of the records if it is deemed a risk to the criminal case, however.

In this case, the prosecutor has done just that, citing the highly unusual circumstances of a separate yet parallel case against two social workers. The workers allegedly falsified records following the child’s death, presumably to conceal whether the agency properly followed up on complaints of abuse and neglect, according to a State Bureau of Investigation probe.

Whether social workers did their job or failed to intervene and protect Aubrey has been a source of heated and emotional controversy. The records, if released, would reveal whether social workers acted on reports of suspected abuse and neglect — assuming the records provide an accurate picture.

But releasing those records that describe DSS involvement in Aubrey’s case could compromise a fair trail in the separate case against the social workers, since their involvement — or lack of involvement — is at the heart of that case.

The release of records would “jeopardize the state’s ongoing investigation” and “jeopardize the state’s ability to prosecute” the case, the district attorney’s office told Swain DSS when blocking the release of the documents.

Keeping a roof over the head of Haywood County’s nearly 8,000 students is getting harder every year as the school system grapples with funding cuts at both the state and county level.

With 16 schools, it’s wise to stay on a steady rotation of replacing a roof every one to two years. Go four years without replacing one, and it is catch up time.

“Then where is the money going to come from? Instead of $1 million project you are looking at a $3 to $4 million project,” said Chuck Francis, chairman of the Haywood County school board. “Now we are at the point where somebody is going to have to step up our schools are going to start going down.”

That’s exactly the message school leaders will be taking to county commissioners this year as they lobby for their maintenance budget to be restored. The county’s annual $600,000 maintenance and repair budget for school buildings was cut to $200,000 four years ago.

“We have to buy light bulbs and fix broken pipes. It’s fixing door knobs and changing locks and keys, and replacing windows that get hit with a rock,” Assistant Superintendent Bill Nolte said. “It is just on and on and on.”

SEE ALSO: Where do schools rank?

Commissioners don’t doubt the schools need the money.

Falling behind on upkeep will eventually catch up with the county, agreed County Commissioner Mike Sorrells, a former school board member.

“The longer you prolong this the more behind they are going to get,” Sorrells said. “If you don’t do your preventive maintenance you are going to end up with a huge backlog. So it is like the saying goes ‘pay me now or pay me later.’”

But in this case, the county may have to take the “pay me later” approach, depending on how the coming year’s budget shapes up. (see related article.)

Another routine expense the school system once kept on a regular schedule is replacing activity buses used for field trips, band trips, sports teams and the like. Those activity buses have to come from local dollars — and the money to replace them hasn’t been there.

“We had a schedule plan to increase that, and that has been frozen for three years,” Francis said.

Assault on all fronts

The school system has also lost a pot of state money for building maintenance, repairs and small capital projects. The state once earmarked a share of corporate income tax for school systems, divvied up based on school population around the state.

When the recession hit, the state started keeping that money for itself — resulting in a loss of $270,000 a year.

That puts the school system out a total of $670,000 in building needs.

Meanwhile, however, the Haywood school system has gotten a boost from lottery money. The school got more than $1.4 million last year in lottery money to use for maintenance and capital projects.

When the state started a lottery six years ago, lawmakers promised the money would be a boon for education. Lottery money would not supplant current funding but would be stacked on top of the funding schools already got, lawmakers promised.

Ultimately, it appears lottery money has supplanted other sources of school funding after all, even though it wasn’t supposed to.

Operational money

In addition to school building construction and maintenance money, the county also gives the schools money for operations, nearly $14 million a year. It hires extra teachers that the state won’t pay for, school secretaries, janitors, supplies, and myriad other operational costs not covered by base state funding.

While the county hasn’t cut the schools’ operational budget, it hasn’t grown any either.

About eight years ago the county brokered a deal with the school system designed to curb what had become an annual fight over how much money the county would pony up. Under the deal, the county would use a formula based on student population to determine school funding each year. The formula also built in a 1 percent increase year to year. But it has been frozen for the past 4 years.

Commissioner Mark Swanger, who at the time had just gone from school board chairman to county commissioner, came up with the idea of a formula.

“The formula worked great,” Sorrells said. “Every year, the school system was able to say we are expecting this amount of money.”

Sorrells saw real progress during those years of better funding.

“So it has been disheartening to have to cut back and cut back,” Sorrells said.

Schools got only a brief and passing mention by Haywood County commissioners during a brainstorming session last week on priorities for the coming year.

Education came up near the end of a free-wheeling 90-minute discussion, with only two to three minutes spent on the topic.

County commissioners later said that education is top priority, however, and its short and late mention in their discussion is no indication of the importance they ascribe to it.

“With this board, schools have been at the top,” said Commissioner Bill Upton, former superintendent of the school system who was a career educator.

Commissioners said their commitment to the schools goes without saying — literally — thus they really didn’t need to say very much about it.

“That’s a matter that we know every year is at the top of our to-do list. It is just always a priority,” said Commissioner Mark Swanger. “It is just a given.”

Of the five commissioners, three have been leaders in the school system. Upton as superintendent, principal and teacher; Swanger as school board chairman; and Sorrells as a former school board member.

Sorrells agreed that schools are “a given.”

SEE ALSO: Lottery money hardly a win for schools

“Boom — that is part of the budget,” said Sorrells. “Historically, Haywood County has always, always supported education, and I feel like our board is still very much in tune to that.”

Sorrells was the one who brought up education in the 11th hour of the priority-setting budget discussion. He realized education hadn’t been mentioned yet and didn’t want the meeting to slip by without at least some acknowledgement that schools would be attended to.

“Albeit it come up at the end, but it come up,” Sorrells said.

The school system has been saddled with funding cuts at both the state and county level. Haywood County Schools has lost 129 positions and $8 million compared to its pre-recession days.

Meanwhile, commissioners have pledged not to raise taxes, so the prospect of more school funding could be slim, even though commissioners said philosophically they wish they could restore cuts to the school’s budget.

“But how in this economy when people are struggling do you come up with that extra money?” Sorrells asked. “I am torn between that. It is a Catch 22 for me.”

Chuck Francis, chairman of the Haywood County school board, said he empathizes with commissioners who are still handcuffed by the economic realities of the time. However, Francis hopes lost funding can be restored, as cuts are starting to take their toll.

“We’ve got a great school system here, and we need to protect it,” said Francis. “It is a selling point for the county. If we lose a good school system, people don’t want to move here. They won’t want to work here.”

Top of the list?

With Haywood commissioners pledging not to raise property taxes, it leaves little wiggle room in next year’s budget. No new money coming in means no new money to go around.

There may be a little extra money — little being the operative word — if an uptick in spending stays on track to bring in more sales tax this year compared to last. A modest number of new houses and businesses being added to county tax rolls will also bring in a little more property tax.

The debate will likely come down to who — or what — will get first dibs on that little bit of extra money.

“I don’t know yet. I think we are still a little bit early,” Swanger said.

The majority of commissioners have indicated cost-of-living raises for county employees may top the list if there is any money to go around.

“One thing we will look at is county employees — the 501 county employees who haven’t gotten a raise,” Upton said.

County employees have not gotten an across-the-board cost of living increase in five years.

“Our employees have sacrificed a lot, being asked to do more with less and getting paid less as gas and other things are going up. I would like to see us help our employees some if at all possible,” Swanger said during budget discussions last week.

The county has awarded merit raises to particularly deserving employees, those who have taken on additional responsibilities or proven particularly exceptional.

“They realize we do have some real high performers and people are doing more,” County Manager Marty Stamey said.

Teachers would probably like to see pay raises too, but haven’t seen one in four years.

“Of course, the teachers’ pay scale from the state has been frozen,” Francis said.

In Haywood County, school teachers get a local bonus —  4.5 percent of the base salary from the state. These supplements are supposed to attract better teachers. While higher than many counties its size, Haywood’s teacher salary supplement is still lower than most of the state’s more urban counties — and lower than Buncombe and Asheville.

Haywood County commissioners and the school board pledged to work together to increase the local bonus a little each year until Haywood County caught up. That plan was sidelined with the recession, however.

Morally, it would be difficult to lay off even more people to afford raises for everyone else, Assistant Superintendent Bill Nolte said.

“As far as I am concerned, how in the world can we increase the supplement when we have lost 129 employees,” said Nolte, citing the toll on the workforce in Haywood’s school system since 2008.

The county likewise has laid-off staff — more than 50 positions have been cut in four years.

Commissioner Kirk Kirkpatrick said giving employees raises is an admirable goal, but he pointed out that in this economy, jobs are hard to come by, and there are always plenty of applicants for any open position the county has had.

Still, with the majority of commissioners reflecting a desire to give employees raises with the little bit of extra money in its coffers, the best-case scenario for the schools may simply be no more cuts.

“We all want to keep it at least where it is,” Upton said. “I am thinking our mindset is we just want to maintain. Maintain — that is the big thing from our budget session.”

Sorrells agreed the schools, like everyone in county government, will likely be hearing the “do more with less” refrain again this year.

“That has been our theme in the county, and we are going to be in that mode for a little while,” Sorrells said.

In the meantime, commissioners are pinning their hopes on consumer spending to increase sales tax revenues. The more it goes up, the more additional money they have to spread around.

A cut of the state sales tax flows back to counties. In the last quarter of 2011, Haywood County saw a slight uptick compared to the same quarter of 2010 — an extra $65,000. It’s hardly enough to pay for raises for all 501 county employees and still have some left over for the schools.

But, Stamey hopes the trend will continue through the next six months.

“The key is sales tax,” Stamey said. “That is the key one we are monitoring closely.”

Common ground

Schools get most of their budget from the state, which pays the lion’s share of teacher salaries. Counties foot the bill to construct and maintain school buildings. That’s the simple version anyway.

Counties also contribute to varying degrees for additional positions, from teachers to extra teacher’s assistants to school secretaries to janitors. Counties also pay for incidentals like activity buses used for field trips.

Haywood County chips in a larger contribution per pupil than many counties its size, and that commitment hasn’t changed, Commissioner Mark Swanger said, despite the belated shout out schools got in the budget priority discussion.

“All you can say is you want to fund education,” Swanger said. “We didn’t get into dollars on anything because we just aren’t there yet.”

Plus, the county isn’t entirely sure what the schools will be asking for yet. County and school officials are meeting next Monday to talk money. The annual budget pow-wow is essentially a chance for the school system to make its pitch.

“We’ll make sure going into this budget process they are aware of what our needs are,” Francis said. “They just need to be brought up to speed where we are.”

The school has to be strategic in its request. Ask for the moon, and the county will have a hard time discerning what is indeed a dire need. Ask for too little, the county will see the schools as being in relatively good shape.

Both the school and county officials went out of their way to stress what a great relationship they have.

“I don’t know if it is anybody’s fault, the state or the commissioners or anybody else’s,” said Assistant Superintendent Bill Nolte. “I think the commissioners empathize with us here.”

Likewise, the school board empathizes with commissioners.

“We understand the funding situation they are under,” Francis said.

Hopes of turning the abandoned Haywood County social services building into low-income senior apartments have been dashed, leaving the county in a quandary over who else might want the building and what other uses it could have.

The county recently moved out of the massive, aging, five-story brick office building in Waynesville. The Department of Social Services had not only outgrown the building, but it was also deemed too dated and run-down to bother renovating.

A new life seemed to be in the cards for the building as a low-income senior apartment complex — but the $8.5-million project was contingent on lucrative tax credits to offset the expense of renovating the old office building. The county learned last week that the hoped-for tax credits have fallen through, and the project is off the table as a result.

Patsy Dowling, the director of the nonprofit Mountain Projects that was behind the plan, said the low-income housing is much needed in Haywood County. She said she is disappointed that the project was knocked out of the running for the tax credits.

“Our aging population is growing, and I thought it was a great thing to be proactive to meet the needs of the senior population in our community,” Dowling said.

County Commissioner Chairman Mark Swanger said the county is likewise disappointed — not only to fill a desperate need for low-income housing but because the county is left with a big, old building on its hands.

The tax credits for low-income housing projects are highly competitive. Only five to eight low-income housing projects in the mountain region will land the tax credits this year — out of more than 20 applications.

Mountain Projects withdrew its application for the old DSS building after realizing its score wasn’t high enough to make the cut. The other 26 applications it was up against all had perfect scores.

The downfall of the Haywood County project? It was too far from a grocery store or pharmacy — 0.7 miles instead of the required 0.5 miles.

“They are very strict about how close it is in proximity to major services,” said Dowling.

The old DSS office building was just short of the criteria, costing the project critical points on its application.

“It is not an equitable system,” Swanger said of the tax credit criteria. “It seems very arbitrary when you are looking at rural areas.”

Blueprints called for renovating the old DSS building into 54 apartments, with a mix of one- and two-bedrooms. The total project cost was $8.5 million, including cost of the property and construction.

The tax credits would have amounted to $6.7 million — dramatically lowering the total cost to just $2 million. Indeed, that’s what made the project feasible. The developer partnering with Mountain Projects to do the project would have a very small mortgage in the end, allowing them to charge lower rents.

“The project doesn’t work without the low-income credits,” said Hollis Fitch, president of Fitch Development, a low-income housing developer based in Charlotte.

Fitch works across the state and regularly taps the low-income housing tax credit pool.

“It is a competitive process,” Fitch said.

Fitch’s group had put more than $60,000 into the design and planning for the Haywood project, including blueprints.

After Fitch and Dowling realized they were up against 26 projects with perfect scores — leaving no hope of snagging one of the five to eight slots — Dowling withdrew the application to save on the $5,000 non-refundable application fee.

While Mountain Projects could theoretically apply again another year, Dowling doesn’t anticipate the competition will getting any easier.

With the building not getting any closer to a grocery store, it is hard to see how it would ever land the tax credits needed to pull off the project.

“The building is where it is. We can’t move it any closer,” Swanger said. “Unless there is a dramatic change in the way in the North Carolina Housing Authority ranks its points, the chances would be remote.”

Indeed, getting that criteria changed is the only hope of jump--starting the project at this point. Swanger said he plans to take the issue up with state legislators.

Going once, going twice?

For now, the 70,000-square-foot building is officially for sale, with a price tag in the neighborhood of $1.25 million.

That’s what the developer working with Mountain Projects was going to pay the county, Swanger said.

The central offices for Haywood County Schools are still located in the building but would move out if and when it sells.

Typically, the county would sell property to the highest bidder. But, it doesn’t necessarily have to. The county could opt to sell it for a lower price to a nonprofit entity if it would in some way serve the public interest, as was the case with the sale to Mountain Projects.

Likewise, the county does not want to sell it to someone who will simply park on it as an investment.

“There would be a due diligence on our part to make sure that it is to a responsible party who will not allow it to just deteriorate and become an eyesore or safety hazard,” Swanger said. “You also don’t want someone to buy it at a very low price just to flip it.”

Obviously, the price tag to buy the property would only be part of the necessary investment from a buyer. Almost any use would require renovations.

Of the $8.5 million projected estimated cost to pull off the low-income apartments, $5.3 million was for construction, Fitch said.

The building was originally constructed as a hospital. The layout — long hallways lined with dozens of tiny rooms — isn’t conducive to many uses without major renovations. Age isn’t exactly on its side either. Part dates to 1927 and the rest to the 1950s — a whopping 72,000 square feet in all.

And, the building isn’t in the best shape either. Its sheer antiquity aside, the county scraped by on its maintenance during the years, spending the bare minimum to keep the building from falling into disrepair — but no more.

Now that it is mostly empty, a county maintenance worker is making twice-daily rounds through the building to make sure there are no water leaks, broken windows, varmints or vandals. The county has kept the utilities on. It can’t shut off the water since the school system is still occupying the front portion of the building. The heat is also being kept on, albeit at a cool 48 degrees, to avoid building shock from wild temperature fluctuations.

“To let it deteriorate further is something we would like to avoid,” Swanger said.

In hindsight, the county hasn’t exactly been the best cheerleader for the building. County commissioners repeatedly talked up the building’s short-comings when debating whether to move out.

The county relocated DSS to a repurposed office complex inside the former Walmart.

Haywood County in the real estate business

The old DSS building isn’t the only former office complex Haywood County government is trying to unload. County Manager Marty Stamey joked that it seems like he has a part-time job as real estate agent these days.

After moving several county departments once spread out in three separate office buildings under one roof at the repurposed former Walmart strip mall, the county is now looking to sell the three office complexes.:

• Annex II (board of elections/planning department): $1 million

• Annex III (health department)/annex III: $1.5 million

• Board of elections/planning department/ annex II: $1 million

• Former DSS (old hospital): $1.25 million

The buildings known as annex II and III on the Old Asheville Highway were originally medical offices, but when the old hospital moved out of its former building, doctors likewise moved their practices closer to the new hospital.

A $10 million line of County credit intended to bridge short-term cash flow problems at MedWest-Haywood hospital has hit a snag.

A loan taken out by the hospital offers up the hospital building as collateral but legally it needs approval from county commissioners to do so.

The MedWest board failed to seek necessary approval from the county before taking out the loan, however. The hospital had already signed on the dotted line and promptly begun spending some of the loan money before the oversight was realized, prompting the hospital to seek the county’s retroactive blessing.

But, county commissioners apparently have not been willing to rubber stamp the loan. The hospital came to the commissioners six weeks ago for their approval on using the hospital building as collateral.

Since then, county commissioners have held three private meetings, which were closed to the public, citing attorney-client privilege, to discuss the loan conundrum.

Formerly known as Haywood Regional Medical Center, the hospital has a clause in its deed that prevents any transfer of the property without county approval. In the unlikely case the hospital defaults on the loan, the lender could not in fact take the building, making the current loan documents partially invalid unless the commissioners give their blessing.

Commissioner Chairman Mark Swanger said commissioners are working with the hospital to come to a suitable arrangement that helps the hospital move forward but still safeguards the building in the event of a default.

“We generally have two goals,” Swanger said. “One is that there be a viable thriving hospital in Haywood County and the second is to protect the county’s interest in the property.”

Meanwhile, the Jackson County medical community has expressed dissatisfaction that their hospital in Sylva, which is part of the MedWest system, ended up on the list of collateral for the loan.

A shorter list, in fact, might be what didn’t get listed as collateral. In all, the loan documents list enough collateral to pay the $10 million many times over. Accounts receivables are at the top of the collateral list — essentially every payment coming into the hospital could be garnished to cover the loan, which in itself would be more than enough to cover the debt. Collateral also includes all the medical equipment in the hospital, as well as the MedWest Health and Fitness Center.

The actual hospital itself, along with the MedWest-Harris and MedWest-Swain hospitals, are far down the list.

So why even list them as collateral? It’s the nature of financing these days, with skittish lenders requiring everything but the kitchen sink, and in some cases even that, to secure a loan, according to Mike Poore, CEO of MedWest-Haywood.

MedWest-Haywood has spent $4 million of its $10 million loan so far. The hospital has no other debt. And that’s why Poore is confident the debate over whether the building is included as collateral is a largely a moot point.

“There are several dominoes,” Poore said, listing all the collateral that would be tapped first in the event of a default before the hospital itself would ever become an issue.

Even then, the loan would merely take the form of a lien against the hospital, as the hospital is worth far more than the $10 million loan.

Indeed, the debate over whether the hospital should have been used as collateral on the loan seems to be playing out more on a matter of principle.

“If we thought there was much chance of default we wouldn’t be doing this. We felt we would be in and out of this moment,” said John Young, vice president for Carolinas HealthCare’s western region.

In an unusual financing arrangement, Carolinas HealthCare System has agreed to act as a bank and put up the money from its own reserves for the loan to MedWest-Haywood. MedWest-Haywood is under a 15-year management contract with Carolinas HealthCare, a network of 32 hospitals under the flagship hospital of Carolinas Medical in Charlotte.

Despite the large number of hospitals under the wing of Carolina’s management, it has never stepped in to provide financial help for an affiliate hospital.

“It has never been done before,” said Young. “I don’t know we will ever do it again, but at the time, it was the right thing to do.”

Young said Carolinas made an exception given the circumstances. For starters, the Haywood hospital desperately needed the money to bridge a short-term cash flow crisis brought on by a perfect storm of financial hits.

MedWest-Haywood had to spend $1 million to replace a broken generator, $1.6 million on a wrongful firing lawsuit by group of emergency doctors and $8 million on a new computer system to handle electronic medical records.

The hospital will actually be paid back for part of the cost of electronic medical records system by the federal government in coming years, Poore said.

“These are what you would consider one-time expenses. We knew we would have to get some kind of financing to help us through,” Poore said.

The hospital also spent an undisclosed sum buying up private doctors’ practices during the past year. It didn’t have the budget to do so, but the practices were being courted by Mission Hospital in Asheville. MedWest-Haywood feared long-term repercussions of a patient drain if it didn’t make a competing offer.

While the hospital was in the black last year, its margin was so slim — around 1 percent — it didn’t have the cash flow to cover the unexpected one-time costs.

“It is not a symptom of the engine being dysfunctional in any way,” Young said. “We realized this liquidity issue would go away, so we decided to lend them the money to get through this moment.”

Smoothing out the wrinkles

Meanwhile, the newly formed MedWest allegiance — a merger of sorts of the hospitals in Haywood, Jackson and Swain under an umbrella organization — need help finding its footing.

“Coming together under MedWest was trying to happen in a very difficult time under a very difficult set of circumstances,” Young said, offering further explanation of why Carolinas stepped up to the plate financially.

The recession was taking its toll on hospitals everywhere, particularly smaller, rural hospitals. And here, the hospitals in Haywood and Jackson were facing tougher competition than ever from Mission Hospital in Asheville.

Meanwhile, the relationship with the Jackson County medical community toward MedWest was strained. A large number of doctors in Jackson County had come forward to express concerns about how their hospital was faring under the new MedWest entity.

Carolinas has been asked for help many times by cash-strapped hospitals operating on razor-thin margins. It’s a frequently asked question by smaller hospitals when weighing whether to join Carolinas’ umbrella.

“One of the things that usually comes up is would you be willing to put capital in. Our answer is always ‘no,’” Young said. “That is not our model. Our business model is to help local hospitals find economies of scale and have the expertise to be successful in a very difficult marketplace. It is hard to do it alone.”

Poore said the financial problem faced by MedWest-Haywood is partly inherited. The hospital couldn’t get a traditional loan from a lender.

The once deep-reserves of MedWest-Haywood were spent up during a faltering time four years ago when the hospital failed federal inspection, largely on technicalities, but the resulting decertification by Medicare, Medicaid and several major insurance carriers forced the hospital to essentially shut its doors for five months. Its reserves were depleted as a result.

“I wish it could have happened a different way,” Poore said of the need for the loan from Carolinas. “I wish we had all the credit in the world and everyone was knocking down our doors to give us credit.”

Poore sees the loan more like a line of credit, a very common financial tool used by corporations both large and small.

“The line of credit is helping us pay for a lot of one time expenditures we’ve incurred this year,” Poore said.

Poore said it wasn’t altogether clear initially whether they actually needed county commissioners to sign on the dotted line.

“At one point, we had 11 attorneys on the phone trying to put this deal together,” Young said. “It is unusual for one hospital to loan another hospital money.”

Poore pointed to the proactive steps MedWest-Haywood has taken during the past two years that will start paying off. It has employed doctors practices, has an outpatient surgery center under construction on its campus, has a new urgent care slated to open in Canton in the spring, and has recruited several new doctors, including a new urologist, cardiologist and neurologist just recently.

These days, it is all about fighting for market share against Mission, and that’s what Poore has been positioning Haywood to do.

“There is a demand, and if we can meet that demand, we can keep those patients here,” Poore said.

The crowded Republican field vying for Heath Shuler’s former seat in Congress thinned out by one this week.

Dan Eichenbaum, an eye doctor from Murphy, rode onto the political scene in Western North Carolina in 2010 with the Tea Party wave. At one-time a Libertarian, Eichenbaum preached Tea Party-brand conservatism, had a fierce independent streak and believed strongly in Constitutional liberty.

In a press release Monday, Eichenbaum said he did not have the money to run against some of the more deep-pocketed candidates in the Republican primary. Two of the candidates considered likely frontrunners, Mark Meadows of Cashiers and Ethan Wingfield of Asheville, are independently wealthy with the ability to put more of their own money into the race.

But fundraising aside, Eichenbaum likely faced a tough race regardless. Despite his Tea Party connections, he was not embraced by the Republican establishment. He had failed to win key nods early in the primary season, from local endorsements to the support of the National Republican Congressional Committee. Without that support, Eichenbaum would have had a difficult time.

“The Tea Party name provides candidates an important signal about ideology and a rallying cry for supporters, but electoral politics is about a lot more than signals — it’s also about organization,” said Chris Cooper, a political scientist and professor at Western Carolina University.

Eichenbaum was a close second in the Republican contest for Congress in 2010, coming in just behind the more moderate Jeff Miller. After losing in the primary, however, he burned bridges with the Republican establishment by refusing to support Miller in the general election against Democratic Congressman Heath Shuler.

This year, Eichenbaum was once again among the more conservative Republican candidates. An active Libertarian before switching his affiliation to Republican, he was considered by some in the Republican establishment too radical to win in a general election. Eichenbaum had already garnered endorsements from three Tea Party chapters in the mountains: the Asheville Tea Party, the Cherokee County Tea Party and the Blue Ridge Tea Party.

(Correction: A story in last week’s paper incorrectly stated that Dan Eichenbaum had been endorsed by the Henderson County Tea Party. Instead, he had been endorsed by the Blue Ridge Tea Party, which is also based in Hendersonville.)

Filing deadline

The filing period for the May 8 primary and the November general election ends Feb. 29.

Steve Heatherly made sure there were plenty of Diet Cokes queued up in the office mini-fridge before work Monday morning — he would need at least a dozen, probably more, to get through the next 24 hours.

Heatherly faced hundreds of nurses, doctors, lab techs, billing clerks, cafeteria workers  — anyone and everyone who works at MedWest-Harris hospital in Sylva — for a full day and night this week. Every hour on the hour, he repeated a short spiel laying bare the challenges and issues facing the hospital before turning the floor over to questions from a steady stream of hospital workers rotating through for the interactive marathon.

“In our current environment we felt like as quickly as possible I have the opportunity to interact with as many of our employees as possible in a very rapid succession,” said Heatherly, the newly promoted CEO of the two WestCare hospitals, MedWest-Harris and MedWest-Swain.

Heatherly likely touched on the challenge of competing for market share against Mission Hospital in Asheville. He allayed concerns that the hospital was struggling financially — at least not hopelessly so — but also charted a course for a better bottom-line.

Billed as a “frank and open dialogue,” Heatherly was bound to get questions about why he was suddenly put at the helm two weeks ago — giving Harris its own leader rather than sharing a single CEO with MedWest-Haywood as it has for the past two years.

The move signaled a retrenching of sorts following a pseudo-merger of the neighboring hospitals two years ago after they both signed a management agreement with Carolinas HealthCare System out of Charlotte. It is also a reflection of discomfort among some in the Jackson medical community about whether their hospital was getting the attention it deserved from a CEO based in neighboring Haywood County.

“Any time those type of administration changes come about, obviously people have lots of questions,” Heatherly said. “They are interested not only in the present but also the future.”

The epic, uber-long format was an effort to hit all hospital employees on every shift, bringing the whole staff up to speed at once but in the comfort of small group sessions — all the while keeping the round-the-clock operations of the hospital humming.

“He is a straight shooter,” Bunny Johns, the chair of the WestCare board, said of Heatherly. “What you see is what you get, and he will lay it on the line for you. I think it is a real talent to do that in a way people can hear it.”

For the record, Heatherly isn’t a big coffee drinker — thus the arsenal of Diet Cokes.

More ‘boots on the ground’

Meanwhile, Mike Poore has returned to being the CEO of MedWest-Haywood only. When the MedWest partnership was formed two years ago, Poore went from being the CEO at Haywood to being CEO of all three hospitals. But, that changed somewhat suddenly two weeks ago.

The stated reason: to give each hospital their own in-house leader that could singularly focus on the issues each location face.

“It makes sense for both of us to put more time into our individual organizations,” Johns said.

Things haven’t exactly been rosy for the Jackson medical community since the affiliation. Patients have been lost to Asheville. Revenues are down. The downward trend was already in play before the merger, an unfortunate combination of a doctor shortage in Jackson and the economy. But some doctors wonder whether the merger with Haywood has helped matters.

“It hasn’t gone down any more, but it hasn’t come back up,” said John Young, vice president for Carolinas HealthCare’s western region.

Several doctors apparently came to the WestCare board of directors with their concerns, thus the CEO shuffle that Young calls “more leadership boots on the ground.”

“I wanted to make sure the folks on the WestCare side of the system knew that Steve (Heatherly) had the authority to work with them to solve issues and win back market share,” Young said.

Working well with doctors

Heatherly isn’t a stranger to the staff at Harris. He has held various top positions at WestCare during the past 15 years. He spent a good part of his childhood in Sylva, went to UNC-Asheville, then got his MBA at Western Carolina University and a second masters in health administration from UNC-Chapel Hill.

He started out at WestCare in 1997 over a subsidiary company that handled physician management and billing and spent nearly a decade on the frontline of doctor-hospital relations.

Heatherly had worked his way up to second in command at Harris, serving as both the chief financial officer and chief operation office, when the merger happened. He was given a new title of chief strategy officer.

Meanwhile, however, the ranks of doctors employed directly by the hospital was swelling. MedWest now has more than 80 doctors on its payroll, a major change from the days not too long ago when doctors all worked in their own private practices.

Heatherly’s skills working with the physician community were tapped for a new position of CEO of MedWest’s physician network. He is continuing to serve in that role as well as his new role of CEO of the MedWest-Harris and Swain.

Heatherly has learned a thing or two about working with doctors over the years, and has occasionally been asked to share his insight.

The relationship between any hospital and its doctors — whether in private practice or employed by the hospital — can take many forms. Some are outright adversarial, and even the rosiest relationships have their share of tension.

“I think the pitfall for a lot of hospitals is if you aren’t fully engaged,” Heatherly said. “You really don’t even have to have active discord, but if a hospital and medical staff aren’t fully engaged then you run the risk of not walking in lockstep. Through no ill will, not being actively engaged can lead to a disconnect. You don’t always have to be in agreement, but the process of going through the dialogue is very, very important.”

That attitude could make Heatherly just the man to iron out concerns of Jackson County’s medical community.

“He is highly motivated. He is highly intelligent. He is well versed in medical systems,” Johns said. “He will bring a level of energy that is impossible to put down on paper.”

Some within the Jackson County medical community are wondering whether their hospital has gotten a fair shake in the partnership forged with neighbor Haywood County under the MedWest umbrella two years ago.

When the hospitals in Haywood, Jackson and Swain counties partnered, they were careful to avoid the word “merger.” Technically, it was an affiliation, according to hospital leaders.

But at the end of the day, it looks an awful lot like what most people would call a merger. The hospitals share each others’ financial gain — or pain — as it may be.

“At the end of the year, we take the bottom line and split it 50-50,” said Mike Poore, the CEO of MedWest-Haywood.

The hospitals keep their own books from day to day, but come year’s end, the profits and losses of each are averaged out.

Steve Heatherly, the CEO of MedWest-Harris, calls it “financially integrated.” In slightly more layman’s terms, Bunny Johns, chairman of the WestCare board, likened it to a “financial truing up.”

That’s likely why some in Jackson’s medical community may be resentful of big bucks seeming to fly out the door of MedWest-Haywood during the past year.

MedWest-Haywood has seemingly been on a building and spending spree during the past year — from the very necessary replacement of a broken down generator to the very optional construction of a new surgery center. Meanwhile, however, the medical community in Jackson has watched as its plans for a new emergency room and major hospital renovation has been sidelined.

“Any individual who is prone to analyze that very critically, sure someone could be upset by that,” Heatherly said of the spending disparities between Haywood and Harris.

But a partnership like this one can’t be sized up from a one-year snapshot, he said.

“When you put together in essence a capital plan with multiple facilities, in any one year it might be perceived that one of those facilities benefits more,” Heatherly said. “But over the long haul, the goal is to make sure the needs of all facilities are met.”

One day, the tables may be turned and likely will. Harris has jumpstarted plans once more for a new emergency room, which will likely carry a $7 million price tag.

Poore said the spending in Haywood has been necessary. In many cases, the hospital’s hand was forced. A generator broke down. A lawsuit was settled. Computer systems needed updating.

But, what about the surgery center, new hospice center or urgent care in Canton?

Johns said the picture isn’t as skewed as it may seem on the surface.

“Most of those were in place and moving before the merger,” Johns said.

But more so, what appears to be spending by the hospital was in fact paid for by outside sources. Doctors put up most of the money to build a new surgery center in Haywood, while the nonprofit MedWest-Haywood Foundation raised money for the hospice center. The hospital, for its part, contributed $2 million combined to those projects.

A new urgent care center coming on line in Canton is costing $150,000. But one was built in Sylva as well, evening the scales on that particular expense. Besides, an urgent care center is a case of spending money to make money. It helps capture patients.

Here’s the spending at Haywood in a nutshell:

• A hospice center, a new surgery center and a new urgent care are in various stages of construction, a total of $2.35 million.

• The back-up generator broke and a new one cost $1.3 million.

• Money has been put on the table to buy physician practices, bringing more than two dozen doctors on the hospital’s payroll in Haywood County.

• The biggest ticket item is an $8 million medical records system. While the biggest need for the new system stemmed from Haywood, the cost also includes upgrades for the hospitals in Jackson and Swain, as well as computer systems to tie in to the burgeoning number of in-house doctors practices across all three counties with the hospital system.

• Hardly the stuff of bragging rights — but expenses nonetheless — are payouts in two old lawsuits, roughly $1.75 million in all.

Bringing docs on the payroll

One expense weighted toward Haywood since the merger is the buyout of doctor practices.

Doctors nationally are cashing in the hassles of private practice for the steady paycheck of being a hospital employee. They no longer have the freedom of an entrepreneur, but they are free to simply practice medicine without worrying about the business side.

The transition has proven costly for hospitals, however.

“It is not an inexpensive proposition to employ physician practices,” Johns said.

The hospitals nor doctors will reveal exactly what it cost to buy the practice. But, the expense doesn’t stop there. The hospital has to assume payroll and overhead immediately, but there is a several month lag before billing catches up, putting a dent in the hospital’s cash flow.

Both WestCare and Haywood had fallen behind in the arena of employing doctors compared to the national trend, however. As doctors retired or moved away, the hospitals were struggling to attract new ones without being able to offer in-house employment.

“The traditional model of recruiting physicians into private practices was no longer working,” Heatherly said.

So starting five years ago, Heatherly led a campaign to bring doctor’s practices under employment of Harris.

“The potential loss of additional market share far outweighed the investment we needed to make,” Heatherly said. “The good news is we have been able to stabilize market share and now our focus has been to demonstrate to the community we are here and have an engaged group of physicians and employees who are very interested in meeting the health care needs in our community.”

Haywood, however, didn’t have that luxury.

While WestCare was on its aggressive campaign to employ doctors, Haywood was struggling to rebuild its image after failing federal inspections. The hospital was decertified and essentially closed its doors for five months in 2007.

It wasn’t exactly in a position to bring doctors onto its payroll. And doctors most likely weren’t going to sell their practices and go to work until they were sure the hospital was on solid ground.

And thus, it was catch up time.

“The pace of question activity certainly picked up over there,” Heatherly said of Haywood during the past 18 months.

Despite his WestCare roots, Heatherly is the first to admit it was worth the money to buy the doctors practices in Haywood County. The doctors were being courted by Mission Hospital, who was making forays to buy doctors practices in Haywood as part of a fight for market share. Heatherly said Haywood had to step in to protect its turf.

John Young, vice president for Carolinas HealthCare’s western region, also agrees with the move.

“If they hadn’t done it somebody else would have,” said Young, who works for the Charlotte-based hospital system that has a management contract over MedWest.

Perfect storm

Other things on the expense list simply couldn’t be helped — namely the lawsuits and blown generator.

“You have to have back-up generation for your hospital,” Young said.

The biggest financial hit by far was an $8 million system for electronic medical records. The expense was once again seen as spending on Haywood’s side of the ledger sheet, but it’s more complicated than that, Poore said.

When the hospitals partnered, each had a different computer system for electronic medical records.

WestCare’s was seen as the best system of the two, so Haywood had to ditch its system and start over. The cost includes some upgrades for WestCare’s portion of electronic medical records. The cost also includes bringing all the doctors employed by MedWest onto the system as well.

From Poore’s perspective, the expense was for all three hospitals.

Haywood also took a hit from two old lawsuits. Both date to the former hospital administration. One quite literally: the suit was filed by the former hospital administrator to pay out accrued vacation. The hospital settled for $150,000 in back pay.

The other was a $1.6 million judgment against the hospital in a suit filed by ER doctors wrongfully ousted at the hands of the former administration.

“It was before us, but in the end, you have to pay what you have to pay,” Young said.

But neither lawsuit was factored into the profits or losses split at year’s end. Those were backed out and kept on Haywood’s side, meaning Haywood took the whole hit of those rather than factoring them into the shared profits and losses.

Harris next in line

Harris’ turn is indeed next, hospital leaders promise.

Five years ago, Harris was in the throes of designing an ambitious $18 million expansion and renovation. Plans called for a new emergency room four times bigger than the current one, as well as major renovations and additions to various parts of the hospital.

But, the recession sidelined the plans.

“We found that health care is not recession proof,” Johns said.

Unfortunately, the project at Harris had to wait.

“We have been juggling a lot of priorities,” Johns said.

With those now out of the way, however, a new emergency room for Harris is now back on the table as the “top priority,” Johns said.

“The ED is at the very top of the list,” Heatherly agreed.

It won’t be as big as once hoped for — likely only doubling the size of the emergency room and minus the related hospital renovations, for a much smaller price tag of only $6 to $7 million.

Still, that’s a lot of money. It will take borrowing, and that can’t happen until Harris is able to improve its financial bottom line.

Heatherly said MedWest-Harris needs to show “some good, sustained financial results” before the project gets the final green light, so it is hard to say exactly when it will happen.

WestCare is already carrying $14 million in debt on its books dating to various expansions on both its Sylva and Swain a decade ago.

MedWest-Haywood, on the other hand, has only about $4 million in debt, recently assumed as a line of credit from Carolinas Health Systems, which has a management contract over MedWest.

The MedWest system had a profit margin of 0.8 percent last year. It is aiming for 1.1 percent this year.

While slim, it is only slightly below what most small or mid-sized hospitals are pulling in these days. The margins also include depreciation, which artificially deflate what the hospital actually made in hard cash at the end of the day.

Caron Swayney knew better than to torture herself, but still she occasionally found herself drawn to the trailer park where the cold, limp body of her 15-month-old niece was discovered dead in the middle of the night last January.

“I would go down there and just sit in the driveway and just look at that trailer and cry,” Swayney said. “It just seems like it is never going to end.”

The year since the death of Aubrey Kina-Marie Littlejohn has been trying and emotional for her extended Cherokee family. When Swayney participated in a ceremonial sweat lodge at the start of the new year, she had one wish.

“I asked everyone to pray for the family that this year would start off better than what it did last year and that we would get the answers we had been waiting for for a year,” said Swayney, Aubrey’s great-aunt. “We kept wondering when something was going to happen.”

Last week, something finally did.

Ladybird Powell, who was caring for Aubrey at the time of her death, was arrested on numerous charges last Friday in connection with Aubrey’s death, including second-degree murder and felony child abuse. Powell is being held on $1 million bond.

“This has been one of the hardest cases that we have had to investigate, primarily because of the age of the child. As a parent, it is hard to imagine any child being taken away at such an early age,” Swain County Sheriff Curtis Cochran said in a statement.

An autopsy revealed numerous recent bruises on Aubrey’s body and past evidence of a fracture. It found the nature of Aubrey’s death was consistent with hypothermia but could not conclusively determine that it was indeed the cause of death.

Family members say Ladybird’s trailer did not have heat. When Aubrey’s lifeless body was brought into the emergency room the night of her death, her core body temperature was a low 84 degrees, and she was dressed in only a T-shirt and dirty diaper.

Witnesses have said Aubrey was not properly cared for by Ladybird and that on the day of her death she had been strapped in a car seat for 12 hours and hardly fed.

Aubrey’s mother, Jasmine Littlejohn, had asked Ladybird to care for Aubrey temporarily while Jasmine served time in jail. When Jasmine got out of jail and tried to get her daughter back, Powell refused unless Jasmine paid her several thousand dollars, according to family.

Kidnapping and extortion are among the charges filed against Powell. She also faces drug charges, including possession of methamphetamines, for drugs and paraphernalia confiscated from the trailer the night of Aubrey’s death.

The family was relieved to get word of the charges last week, particularly Aubrey’s mother, Jasmine.

“She knows it won’t bring Aubrey back, but like everybody else, she wants the people held responsible for her child’s death,” said Henrietta Littlejohn, Aubrey’s grandmother.

Cochran said that while it has taken a year to build the case, it has been a top priority of the sheriff’s department.

“There has been a great expression of concern from Aubrey’s family members, and we want everyone in Swain County to know that we have never stopped working on this case,” Cochran said, crediting the work of Detective Carolyn Posey in particular.

The family knows the charges are just the first step, however, in what could be a difficult and protracted court battle, one that will mean reliving baby Aubrey’s death over and over. Henrietta is trying to brace her daughter, Jasmine, for what’s to come.

“It could get nasty, and it could get ugly, so she is going to have to prepare herself. We all are,” said Henrietta Littlejohn.

David Wijewickrama, an attorney who has been acting as an advocate for Aubrey’s family in seeking justice, said he was pleased by the charges.

“I want to applaud the district attorney’s office for pursuing the case with diligence and not letting it slip through the cracks,” Wijewickrama said.

Charges expected this week in social service’s alleged cover-up

While the caretaker of 15-month-old Aubrey Kina-Marie Littlejohn has been charged in connection with her death last year, the case is not exactly closed.

Still pending is whether Swain County social workers will face charges for an alleged cover-up following the baby’s death. The State Bureau of Investigation conducted a 10-month probe into whether social workers falsified records in an attempt to cover up potential negligence on their part.

Aubrey’s family say they warned social workers numerous times that Aubrey was not safe in the home of Ladybird Powell. Social workers even removed other children from the home but left Aubrey there.

Charges stemming from the SBI investigation into the Department of Social Services are expected this week. See www.smokymountainnews.com for updates in the case.

Concerns among Jackson County doctors that Harris Regional Hospital is not thriving as it should under a partnership with Haywood Regional Medical Center has prompted a change in top leadership.

Harris once more has its own CEO, and Haywood will be under its own CEO. This marks a step back from the shared management structure the hospitals were moving toward.

“Right now, it is clear that we need to have two very strong managers focusing on their specific campuses,” said Fred Alexander, chair of the MedWest Board of Directors, the umbrella partnership for the Haywood, Jackson and Swain county hospitals.

Until last week, Mike Poore served as the CEO of all three hospitals as well as the umbrella partnership of MedWest. Poore has now been pulled back to his former role of being over Haywood’s hospital only. WestCare, which includes both Harris and Swain County Hospital, will have its own CEO in Steve Heatherly, who was second in command at WestCare prior to the partnership and since then has served the head of the MedWest Physician Network, which employs more than 80 doctors.

Poore said he wants whatever is in the best interest of all three hospitals, even if that means a change in his job title.

“We have to be laser focused on giving the absolute best care at each of our hospitals,” Poore said.

When Harris and Haywood hospitals formed a partnership two years ago, the CEOs of both applied for the top job over the new MedWest entity. While Haywood was seen as pulling for Poore, Jackson was seen as pulling for its own CEO at the time, Mark Leonard. When Leonard did not get the top spot, he left rather than staying on in some other capacity.

Now, Heatherly may be the next best thing. He has been at Harris since 1997, working his way up to CFO, chief operating officer and executive vice-president. Heatherly got his MBA from Western Carolina University.

Alexander said several physicians recently brought their concerns about the direction of Harris to the hospital’s board and management team.

“I think their sincere motivation is to try to see the hospital operating more smoothly,” Alexander said. “As a result we felt both hospitals needed to have direct hands-on management. Our whole desire is to resolve any issue that is present.”

And the clock may be ticking. If Jackson’s medical community isn’t satisfied, they could lobby to pull out of the MedWest partnership in 2013.

While dissolving the partnership may not be particularly easy, there was a clause in the contract forming MedWest that allowed for an out after three years — which is coming up next year. But it would take a super majority of MedWest’s board of directors to terminate the partnership. The board has 14 members — with Haywood and WestCare evenly represented with seven members each — and 75 percent would have to vote to dissolve. Barring that, legal arbitration could be an option.

Not uncommon hiccup

In addition to partnering under the MedWest umbrella, the entity also signed a management contract with Carolinas Health System, a network of 30 hospitals under the flagship Carolinas Medical in Charlotte.

Carolinas Health System has been an astute observer in recent years of mergers and partnerships playing out with smaller hospitals across the state. Hiccups like this are not uncommon, according to John Young, vice president for Carolinas HealthCare’s western region.

“We need someone living and breathing and spending all their time on each side,” Young said. “When you have people going back and forth you feel like nobody is getting the full attention of anybody. We decided it was time to make sure we had enough boots on the ground in terms of leadership.”

Neither hospital has a particularly easy row to hoe these days — whether together or alone. Hospitals and doctors have all been impacted by the recession, as consumers cut back on health care spending and insurance companies and Medicare lower their reimbursement rates.

But the financial challenges in Haywood and Jackson have been exacerbated by competition from Mission Hospital, which has been chipping away at market share of the local hospitals in recent years.

“We have lost too many patients out of our marketplace and that is putting financial stress on the entire organization,” Young said. “If we get grow bigger and get better a lot of this stuff will just fall away.”

The MedWest partnership is still relatively new, and there is naturally going to be an adjustment period as hospitals and doctors who used to be independent begin thinking collectively, Young said.

“We probably are moving it back a little bit form the direction we were going, but if that helps both sides be more successful, then it will help MedWest be successful,” Young said.

As the CEO of all three hospitals and MedWest at large, Poore brought a more collective approach that perhaps the hospitals and medical communities weren’t ready for yet.

“We haven’t been meticulous about accounting this widget went to that campus and that widget went to that campus, but we are going to start doing that,” Poore said.

Several administration functions have been consolidated by the partnership. MedWest shares a nutrition department, marketing department and purchasing department, for example.

But medical care and health specialties have not been consolidated, and there are no plans to make patients trek to either-or hospital depending on the type of treatment they need.

“The end game of everything we are trying to do through MedWest and the individual hospitals is to provide local services for local people,” Alexander said.

Alexander pointed out that if the business side of a hospital — namely how good or bad the hospital is faring — always seems to capture headlines, that’s because it is directly related to its mission.

“Most succinctly, if a hospital wants to do good for its community it must do well financially,” Alexander said.

Alexander said the hospitals may return to a single CEO model at some point.

“We don’t see this as a permanent set up, but for the foreseeable future,” Alexander said. “Change is your middle name if you are a hospital these days. In the life cycle for any organization the form has to follow the functions that are at hand.”

It’s been nearly a year-and-a-half since Edna Queen lost her son, and despite forking over $1,100 for a headstone to mark his gravesite in Fairview Memorial Gardens in Sylva, there’s nothing but a patch of grass where his body lies.

No matter how many times she called Reg Moody, Jr., the owner of Moody Funeral Home and Fairview cemetery, the answer was always the same.

“He kept telling us it would be up next month, next month, next month, and it never did come. The money is gone. It is just awful,” Queen said.

Unfortunately, Queen isn’t alone. There are more than 30 complaints against Moody Funeral Home in Sylva for failing to deliver on grave markers that were paid for but never delivered. Some have been waiting for two or three years.

“To me, that is a lot of money,” said Queen, who’s cried over her son’s missing headstone many times. “Here I am 83 years old. People like me, we just draw Social Security. We just barely exist.”

Exactly when Queen and the 30 others like her will ever get the monuments they paid for is a mystery.

Moody Funeral Home closed in December after years of being dogged in court by collectors. Moody has resigned, and the funeral home has lost its state license.

A likely course of events at this point is a court-ordered liquidation — where all cash and assets are seized and sold off in order to pay what Moody owes, an amount that could clock in at more than half a million dollars.

The biggest problem for now, however, is figuring out exactly what Moody’s assets are. It’s been an ongoing dilemma that has frustrated the court, a string of collectors, and a court-appointed accountant tasked with sorting out Moody’s finances.

The court appointed an accountant to take over the financial side of Moody’s operations two years ago, but she has been stymied by Moody’s failure to turn over business records and bank statements, despite repeated court orders that Moody open his books.

Court documents reveal a tangled web of shell corporations, sole proprietorships and intermingled personal and business bank accounts that succeeded in staying one step ahead of those to whom Moody owed money.

A constant shuffling of business assets from one entity to another has been designed to “hinder, delay and defraud creditors,” according to Shelia Gahagan, a CPA in Waynesville who was appointed to act as a receiver.

Court filings contend that assets once owned by Moody — from its building, to vehicles, to equipment, to the business operation itself — have been siphoned to other entities in hopes of making them untouchable by creditors.

Further, income received by Moody has been placed in a personal bank account kept secret from Gahagan, court filings claim.

“Mr. Moody, Jr. opened a business account in his personal name, has deposited business funds into his personal account and has retained the profits of the business,” Gahagan wrote in court filings.

Moody funneled money from the funeral home into a personal account as part of the concerted and systematic effort to shield profits from collectors he owed money to, court filings claim.

Moody Funeral Home has been the target of a civil lawsuit dating back five years by a casket company owed $176,000 for coffins it delivered but was never paid for.

Last fall, the court finally threatened to hold him in contempt if he continued to stall Gahagan’s efforts to probe the finances and assets of the business — a threat that resulted in Moody resigning and the funeral home being shut down.

Exactly where those waiting for their tombstones are in the line of people owed money by Moody isn’t clear. In addition to money owed to the casket company, Moody also owes back state and federal taxes.

Another complaint against Moody has been the upkeep of his two cemeteries, namely Fairview Memorial Gardens in Sylva and Swain Memorial Park in Bryson City. Since the funeral home shut down in December, Gahagan has tapped limited businesses funds to perform basic maintenance that had been neglected in the cemeteries.

“He has received payments for services he has failed to perform, and most of these issues have been ongoing for years,” according to court papers filed by Gahagan. “Maintenance and performing services paid for are normal operations of a business.”

The ongoing saga involving Moody Funeral Home is common knowledge in Jackson County, but people such as Queen who already purchased burial plots in Fairview Memorial were over a barrel, she said. If they tried to buy their monument from another company, or if they wanted the funeral service performed by another funeral home, Moody would charge them extra for digging the grave or setting the stone, in effect forcing them to go through his funeral home, Queen said.

A former Jackson County funeral director has been charged with fraud for swindling people who paid for their own funerals in advance.

Ronnie and Thomasine Riddle, 55 and 56, of Sylva systematically defrauded as many as three dozen funeral customers out of tens of thousands of dollars over a nine-year period, according to an ongoing investigation. The couple was running Melton-Riddle Funeral Home at the time but are no longer affiliated with the business.

The victims paid the Riddles up front to cover the cost of their funerals when they eventually died — but the money is now unaccounted for and the funeral services never provided, according to the charges.

So far, the Riddles have been charged with defrauding 13 people of $50,000.

But that’s only part of the picture.

The charges at this point represent only a portion of the funeral home’s customers whose money went missing after being paid to the Riddles, according to records on file with the N.C. Funeral Services Board.

In all, more than three dozen people have come forward saying they prepaid the Riddles — for a total of more than $150,000 that was not properly deposited into funeral accounts and is now missing, according to funeral board records.

The investigation appears to be ongoing, but it is unclear whether more charges could be forthcoming.

“The investigation into these activities is continuing and will be continuing as allegations come forward from people who may have been affected,” District Attorney Mike Bonfoey said.

Funeral homes are supposed to follow strict guidelines when people pay for a funeral ahead of time. The person who paid for their funeral upfront won’t exactly be around to make sure they get what they paid for, giving rise to clear state laws on how the money for prepaid funerals should be handled. The money must be set aside either in a designated trust fund or through an insurance policy. Either way, it essentially goes in a lockbox ensuring the money will be there to provide the services.

SEE ALSO: Tombstone buyers in grave situation with Moody Funeral Home 

All the charges filed to date against the Riddles involved insurance policies — or rather the lack of insurance policies, according to warrants. The Riddles gave customers fake paperwork, leading them to believe their money had been put into an insurance policy when in fact no such policy existed, according to the charges.

“They wrote these contracts, accepted the people’s money and gave them receipts, but the money was never sent to the insurance company,” said Tom Tucker, the new owner and manager of Milton Funeral Home, who has condemned the Riddles’ actions.

The current charges are all the result of a two-year investigation by fraud officers with the N.C. Department of Insurance and deal only with cases that involved fake insurance policies.

But there are potentially another two dozen victims who prepaid for funerals whose money was supposed to be placed in a designated trust fund but now can’t be located, according to the N.C. Funeral Board. These did not fall under the purview of the N.C. Insurance Department but instead would be investigated by local law enforcement or prosecutors.

Bonfoey said he could not comment other than to say “The investigation into the entire sphere of this activity is continuing.”

Tucker said he would not be surprised if more charges came along at some point to hold the Riddles responsible for all the additional victims.

“It looks to me like there would because there is quite a number of those,” Tucker said.

The N.C. Funeral Services Board doesn’t have a law enforcement arm and can’t launch a criminal investigation of its own. It did send two letters to District Attorney Mike Bonfoey in 2009 alerting him to evidence of felony embezzlement and fraud by the Riddles. The letters offered to help in an investigation should Bonfoey chose to initiate one.

“We reported to the local district attorney as required by law when ever there is embezzlement of premium money,” Harris said.

State fund re-pays victims

In the meantime, the N.C. Funeral Services Board has forked over $60,000 to pay back victims, and more is likely coming.

“We are still dealing with potentially $100,000 or more in claims,” said Paul Harris, head of the N.C. Board of Funeral Services.

Paying for funerals in advance is fairly common. Sometimes people don’t want their funeral expense to be a burden on their family. Others are trying to spend down their assets in order to qualify for Medicaid. And some are simply hedging their bets, locking in the cost of their funeral at today’s rates.

The N.C. Funeral Services Board tries to act as a check-and-balance, ensuring that people who pay cash upfront for a funeral will actually get the service they’ve paid for when the time comes.

A record of every prepaid funeral transaction is supposed to be filed with the state funeral board, which checks to make sure the money got deposited where it was supposed to be. The Riddles did not file paperwork with the state as required, however.

Failure to file the paperwork can result in a funeral director losing the ability to sell prepaid funeral services — and that’s exactly what happened to the Riddles in 2006, although evidence suggests they continued to do so anyway.

Harris said every couple of years there seems to be a dishonest funeral director somewhere in the state who pockets people’s money.

The state has a restitution fund to pay back victims in this predicament. The pool of money comes from a $2 fee tacked on to all prepaid funeral arrangements made in the state. The fund is taking a serious beating in the Riddle case, Harris said.

Harris said victims are pleased the state has such a safeguard in place when the money they thought they put toward a funeral is stolen by a funeral director, but ideally the funeral director would be held criminally responsible and have to pay restitution if the case can be proven.

Funeral home founder devastated

The Riddles ran Melton-Funeral Home for almost a decade before losing their license from the N.C. Board of Funeral Services. The license was revoked in 2009.

The funeral home was taken over by Thomas Tucker, a longtime funeral director in the region who had been working at the funeral home part-time. Tucker dropped the Riddles’ name from the business and went back to the original name of just Melton Funeral Home.

The turn of events has been heart-wrenching for the funeral home’s original founder, Frank Melton, Tucker said.

“Oh my goodness, it has hurt him,” Tucker said.

The Riddles worked for Melton for several years before becoming partners in the business. Melton even added their name to the business making it Melton-Riddle Funeral Home.

When Melton was forced into retirement after a heart attack, the Riddles took over the business completely.

Although Melton “when all this started breaking lose,” was no longer involved in daily operations, he was devastated, Tucker said.

“It just sent him into a tailspin,” Tucker said.

More than two years later, Tucker said he is still sorting out the mess. People continue to walk through the door following the death of a loved one believing they had squared away arrangements years ago — not only putting down cold, hard cash to pay for the funeral but working out details of the service, like who the pallbearers would be, which casket they wanted and what verses they wanted spoken.

“Of course, we have no record of it,” Tucker said. “I am a lost ball in high weeds. It has been a nightmare.”

While the Riddles no longer have a role in Melton’s funeral business, Ronnie Riddle has continued to work occasionally as a gravedigger.

“But that will be no more,” Tucker said. “I’ve had people tell me they didn’t want him even at the graveyard.”

Tucker has been in the funeral business for more than 40 years, including serving as the manager of Wells Funeral Home in Waynesville.

Gov. Beverly Perdue laid out a proposal last week to increase the state’s sales tax by three-quarters of a cent to fund education.

The move would generate an estimated $850 million for the state’s public schools, community colleges and universities — money Perdue says is necessary to make up for the Draconian cuts to education at the hands of Republican legislators.

“We owe it to our children and our state to stop these cuts and make education a priority again — a fraction of a penny for progress,” Perdue said in a conference call with news reporters last week.

North Carolina is now 49th in the nation in per-pupil funding for education. Perdue said she was dismayed by what she considers the sell-out of the state’s long-standing reputation as a leader in education in the South.

“When I see a list with North Carolina in per pupil funding worse than Mississippi, Alabama, Arkansas — all these states that for generations had tried to be more like North Carolina — I feel like there is something really dangerous happening to North Carolina,” Perdue said. “It is shameful. It is wrong.”

But, the sales tax has no hope of passing muster with the Republican-controlled General Assembly, according to Sen. Jim Davis, R-Franklin.

Republicans are chalking Perdue’s proposal up to campaign posturing in her re-election bid this year.

“It is not going to go anywhere in the House or Senate,” Davis said.

Davis said an economic recovery is the best bet for boosting state coffers, and a tax increase would run counter to a recovery.

“We believe the economy is still very fragile and that money is best left in the hands of the private sector in the hopes that it will generate jobs and consequently increase revenue under the present tax structure,” Davis said.

But, Perdue is pitching the tax hike as an investment in children.

“I have never met a parent or a grandparent that actually didn’t want a better life for their child or grandchild than they’ve had themselves,” Perdue said.

The argument frames Republican lawmakers as putting the interests of children second.

“Of course she wants to make us out like bad guys so she can win the election,” Davis said.

But, Davis said Republicans’ stance against a tax increase is equally looking out for the interests of children.

“I don’t want anyone’s grandchildren or my grandchildren to inherit this legacy of debt,” Davis said.

He also questioned whether more money is always the answer.

“We believe the educational system has problems that money won’t fix,” Davis said.

Perdue will likely find allies in the ranks of public schools and universities. Bill Nolte, the assistant superintendent for Haywood County Schools, said education is hurting and could use any help it can get.

“If the governor or any other elected official can stop the bleeding, good for them,” Nolte said.

The Haywood County School system has lost $8 million and more than 120 positions during the past three years, Nolte said.

The result is larger class sizes and fewer teacher assistants. Teachers also have less help dealing with at-risk students, with students who can’t speak English and with special needs students — which takes time away from teaching the rest of the class.

Schools can brace for more cuts this coming year when a stream of federal stimulus money that until now had softened states’ budget crises is phased out.

Nolte admitted that the Republican leaders are keeping the promise they made to voters when they swept to power — namely that they would let a 1-cent sales tax initially billed as a temporary recession measure finally sunset and make up the difference with cuts.

“That is exactly what they did,” Nolte said. “They cut taxes that were being used for education and other essential services. I don’t think anyone can say they were surprised.”

Political instant replay

The debate over a sales tax increase for education is largely a replay of last year’s budget showdown between the Republican-controlled General Assembly and the Democratic governor. Republicans say Perdue has no chance of changing the outcome this go around and that her sales tax pitch for education is already dead in the water.

Last year, the governor vetoed the state budget crafted by Republicans. She wanted a sales tax increase to offset cuts to education. Both the House and Senate had enough votes to override the governor’s veto, however.

The Senate had a veto-proof majority of 31 Republicans compared to 19 Democrats. In the House, five Democrats joined with Republicans to override the governor’s veto.

To have any hope of success this time around, the governor would have to swing two Republicans in the Senate to her side and keep the five Democrats in the House from breaking ranks.

Even then, a bill to increase the sales tax by three-quarters of a cent could be far-fetched. It would require bringing a vote to the floor of the General Assembly — and since Republicans control the agenda they won’t even let it come to a vote, Davis said.

Perdue vowed to take her message on the road and hopefully raise enough Cain that voters will demand action.

“I am going to go in every legislators’ backyard to get this funding passed,” Perdue said. “I hope the people of the state think about this.”

Maggie Valley has been rallying allies in its fight to save a small but perhaps precious sliver of its struggling tourism trade: pass-thru business from travelers en route to Cherokee.

A highway sign currently proclaims Maggie Valley as the proper way to reach Cherokee for tourists coming from Interstate 40. But Maggie could be stripped of this coveted status.

A new sign has been proposed that would lay-out two possible routes to Cherokee: one through Maggie Valley and one that continues through Jackson County.

The Maggie route is shorter distance-wise, but follows a narrow, two-lane winding road over Soco Gap. The route through Jackson County is longer, but sticks to a four-lane divided highway.

Maggie leaders perceive any change in the signage as a threat, potentially diverting tourist traffic away from their doorstep and into the welcoming arms of Jackson County instead.

Maggie Valley Mayor Ron Desimone said directional signs shouldn’t be hijacked as a tool to promote one town at the expense of another.

The push for new signage came from Jackson County leaders and the Eastern Band of Cherokee Indians. As a result, the N.C. Department of Transportation has been studying the issue for several weeks, comparing traffic counts, drive time, crash statistics and scouting the roadside for where a new sign could go.

While tourists’ wallets are clearly an undercurrent in the tug-of-war over the Cherokee sign, DOT maintains that won’t influence its decision.

“Economic development is not going to be a factor,” said Cece Hipps, president of the Haywood County Chamber of Commerce. “It doesn’t carry any weight to say it would hurt economic development in our county if they changed the route. Their number one is safety.”

As a result both sides have resorted to arguing their route is the safest or most direct.

But clearly that is not what drove Jackson County to try to wrest the Cherokee sign away from Maggie Valley in the first place, Maggie Valley Town Manager Tim Barth said.

“They said it has nothing to do with business, but it has everything to do with business,” Barth said.

“I’m sure their motive is the same as ours,” agreed Ron Leatherwood, chairman of the Haywood County Chamber of Commerce.

Much ado about nothing

Just how much Maggie stands to lose if the sign is changed is anyone’s guess, but to the struggling mom-and-pop motels and diners lining Maggie’s main drag, losing even one room night or one table is one too much in this economy.

Thus, Maggie pledged earlier this month not to give up without a fight, and since then has sprung into action.

A meeting of key players in Haywood County’s business and tourism sectors, along with town leaders from Waynesville and Maggie, held a strategy meeting Monday to craft their own lobbying campaign.

The attention the debate has garnered had some in the room scratching their head over how much difference it will really make.

“I don’t think anyone is going to see a blip in their business one way or the other,” Leatherwood said. “I see it as much ado about nothing. But there are 10 of us in here having a meeting about it so it must be something.”

Waynesville Mayor Gavin Brown also questioned whether directional signs really influence the route travelers take.

“If you want to go to Cherokee, you already know how you are going to Cherokee,” Brown said.

Waynesville was put in the middle of the debate early on. Technically, Waynesville stands to gain by a new sign. Right now, Cherokee-bound travelers who take the Maggie highway exit never make it to Waynesville’s doorstep. Jackson County leaders assumed that Waynesville would like the idea of a new sign, encouraging Cherokee visitors to instead stay on the highway and giving Waynesville a shot at capturing some of the traffic.

But Waynesville, it appears, has put its allegiance with Maggie Valley as a fellow Haywood County town first. Rather than join sides with Jackson, Waynesville has sided with Maggie Valley.

Brown isn’t sure how much tourism business Waynesville would really pick up from pass-thru traffic heading for Cherokee, except for gas stations right near the highway exits.

“I think the gain for Waynesville would minimal, but it could hurt Maggie,” Brown said. “I am not going to stick them when they’ve got problems.”

While it’s easy to ascribe an ulterior motive to Jackson County’s posturing, Haywood’s leaders were puzzled why the tribe has weighed in.

“That’s what I want to know — what’s it in for them?” DeSimone asked.

While U.S. 19 slides undramatically into the backside of the reservation with little in the way of an official welcome, Cherokee sees U.S. 441 as more of a bona fide gateway to the reservation, passing by the doorstep of its signature golf course and bringing tourists in closer proximity to the heart of downtown Cherokee — before eventually arriving face to face with the towering casino entrance. For tourists who come over Soco Gap on U.S. 19, their first view of the casino is its parking deck.

Both the tribe and Harrah’s direct travelers to come in on U.S. 441 — and specifically advise travelers not to take U.S. 19 — in their tourism literature and web sites.

“They are already doing everything they can to drive traffic that route,” Hipps said referring to U.S. 441.

Only about 3,500 vehicles a day on average make the climb over Soco Gap, but it fluctuates widely given the seasonal nature of tourism in Maggie and Cherokee.

“That number can be pretty high in the summer and pretty low in the winter,” said Reuben Moore, technical services engineer for the DOT regional office in Sylva.

Meanwhile, about 15,000 vehicles a day frequent U.S. 441 near the Cherokee exit.

A new sign

The cost of a new sign would be about $100,000 minimum — and perhaps double that depending on how much information it attempts to convey about the two dueling routes.

It’s unclear whether those requesting the new sign could be made to pay for some portion of it.

Maggie leaders expressed frustration that DOT is trying to fix what ain’t broke, but N.C. Rep. Ray Rapp, D-Mars Hill, pointed out that this landed in DOT’s lap.

“DOT didn’t invite this. They don’t want it,” said Rapp, who represents Haywood County in Raleigh. Jackson County and the tribe forced the issue with their requests to DOT.

“They have a responsibility to respond to that. They can’t just blow it off,” Rapp said. “I think they are trying to find a compromise that will satisfy everyone.”

But Moore, the DOT’s staffer who came up with the alternative sign, doesn’t like to call it a compromise. That would imply DOT’s goal is to satisfy the whims and wishes of dueling tourism interests.

Rather, DOT is merely acknowledging that there are in fact two ways to Cherokee.

“I hesitate to even call it a compromise, so much as from my point of view a position that correctly communicates the travel options,” Moore said.

The new sign would list each route followed by driving distances: 35 miles through Jackson County and 24 miles through Maggie.

But the sign wouldn’t stop there. A series of footnotes and disclaimers would caution drivers that U.S. 19 through Maggie has “six miles of steep winding road” and is “not recommended for large vehicles.”

There’s plenty of additional factors drivers might like to consider, however. Elderly drivers whose hand-eye coordination and reaction time isn’t as keen as it once was might prefer sticking to the four-lane highway. For any cell-phone addicted drivers out there, it’s worth noting the route over Soco Gap has a whopping three-mile dead zone with no reception. But if you’re craving boiled peanuts or in the market for pottery, the roadside stands of Soco are a must.

But alas, when it comes to additional footnotes, there just isn’t room on the sign as it is. Besides, the DOT won’t get into judgment calls like this and instead is sticking to the empirical data — which route is most direct and which is safest.

U.S. 19 through Maggie wins for being the most direct route, hands down.

“It is a beeline. A curvy, windy beeline maybe, but it is the shortest distance,” Moore said.

So which route is safer? The crash rate — which in simple terms is the ratio of wrecks to the total number of vehicles — is 10 percent higher for the Maggie route.

But Desimone said the crash rate difference is negligible.

“We are really splitting hairs here to get to the safest route,” Desimone said. “There is no compelling reason to change that sign.”

However, the Eastern Band of Cherokee Indians continues to express concerns about wrecks on the narrow, two-lane mountain road, Moore said, especially when it comes to large vehicles, like campers, RVs and motorcoaches.

Moore said he plans to study a breakdown of wrecks in more detail, particularly the large-vehicles that seem to be a source of greater concern.

While each side in the case clamors to pull off the best lobbying campaign, Moore said that won’t factor into their decision, nor will who carries the most political weight.

“Absolutely not,” Moore said of directional signs. “That is a DOT responsibility.”

The great Cherokee sign debate

Haywood and Jackson counties are butting heads over the privilege of being the preferred route to Cherokee — a tagline that carries with it a shot at enticing Cherokee-bound travelers to drop a little change on their way by.

With 3.5 million visitors a year, Harrah’s Cherokee Casino and Resort is the largest single tourist attraction in the state. Couple that with hundreds of thousands of additional tourists coming to Cherokee as a cultural destination or jumping off point for the Great Smoky Mountains National Park — and it’s easy to see why neighboring communities would be fighting over what at first glance seems like little more than crumbs. All those crumbs can add up.

Turn-about is fair play

No longer resigned to playing defense, Haywood County’s leaders decided to mount their own push for a second sign to Cherokee — one that would be placed in Jackson County letting tourists know they can get to Cherokee by coming through Waynesville and Maggie.

To cater to travelers from the Atlanta region, Haywood wants a highway sign on U.S. 441 near Dillsboro letting travelers know they can get to Cherokee by coming up and around through Haywood County — even if it is a far more circuitous route.

Ron Leatherwood, chairman of the Haywood County Chamber of Commerce said if Jackson is asking for a second sign in Haywood, Haywood can ask for a second sign in Jackson.

“We should ask DOT to do the same study. If they are doing it for one, they should do it for us,” Leatherwood said.

The DOT will soon be getting formal letters signed by the county tourism board, the Haywood County Chamber, the Maggie Chamber, the towns of Maggie and Waynesville, the county’s economic development commission and perhaps the county commissioners asking the route through Maggie remain on directional signs for Cherokee. They hope their letters will counter the letters DOT has already received from Jackson County and the tribe.

A mentally ill man got a $22,500 settlement in a lawsuit against a Bryson City police officer who hit him multiple times with a baton and sprayed him with pepper spray.

The settlement came more than three years after the incident, which involved a 25-year-old with schizophrenia. The man sustained physical injuries and mental trauma after a Bryson City police officer hit the man repeatedly with a baton while serving involuntary commitment papers on him outside a downtown pizza restaurant.

The out-of-court settlement was reached through mediation in November.

The settlement is being paid by the town’s insurance company and not out of town coffers. In fact, the town didn’t even know it had been settled, said Bryson Town Manager Larry Callicutt.

Callicutt said he found out last week that the case had been settled by the insurance company back in November.

The suit by Jacob Grant claimed Bryson City Police Office Leon Allen sprayed him with pepper spray and hit him on the head, face, shoulders, stomach, back and legs, even after he was already on the ground. Grant’s family had petitioned for involuntary commitment because they feared Grant was not taking his medication.

When Allen tried to take Grant into custody, Grant asked to see the commitment papers, Allen couldn’t produce them, and a verbal argument ensued that allegedly escalated into Allen beating Grant. Ten witnesses stepped forward and filed police brutality complaints against Allen.

Allen, meanwhile, claimed Grant assaulted him. Grant was charged with assaulting an officer but those charges were dropped when Grant agreed to plead guilt to the lesser charge of obstruction of justice.

Allen was placed on leave while the department conducted an internal investigation, but was eventually reinstated on the force. He later left the Bryson police department and went to work in another county.

The settlement was signed on Bryson City’s behalf by Attorney Sean Perrin with Womble and Carlyle law firm out of Charlotte, who specializes in liability claims against police departments. The insurance company hired and paid for the attorney.

Grant was represented by Asheville attorney Andrew Banzhoff. The civil suit was filed almost two years after the incident, just shy of the statute of limitations cut-off.

Banzhoff said he could not discuss the settlement due to confidentiality provisions.

A lawsuit filed last week claims $17 million has been hijacked from public coffers over the past two decades by a mental health nonprofit.

A regional mental health agency filed the suit in hopes of recouping the lost money, as well as millions worth of property, that the nonprofit has amassed over the years.

The suit claims Evergreen Foundation strayed from its core mission of supporting mental health services in the region, and instead has been hoarding public money to build up its own war chest.

Smoky Mountain Center for Mental Health claims in the suit that millions in state mental health dollars were placed in trust with Evergreen Foundation, but Evergreen has violated that trust. Smoky Mountain Center oversees mental health services for a 15-county area and is based in Sylva.

Smoky Mountain Center for Mental Health established Evergreen as a support arm for the agency, but Evergreen has since severed its ties with Smoky Mountain Center and absconded with millions of dollars in cash and assets in the process, the suit claims.

Evergreen’s director, Tom McDevitt, previously served as the director of Smoky Mountain Center — in keeping with the historic practice of the sister organizations.

However, McDevitt resigned under pressure from Smoky Mountain Center four years ago amid allegations he used his position for personal financial gain. Even after he was no longer running the mental health agency, he managed to retain his position over the nonprofit Evergreen.

The relationship between the sister organizations became strained after McDevitt’s departure. McDevitt said he was not surprised by the suit, given that Smoky Mountain Center has been threatening one against Evergreen for two years. McDevitt also said that he is disappointed that both organizations will have to expend money on a lawsuit that could be used to help people with mental health issues and disabilities.

“Although Evergreen has tried to maintain a good working relationship with Smoky Mountain Center — and will continue to do so — SMC’s issue will now have to be resolved in court,” McDevitt said in a written statement.

The suit was filed by Attorney John Zaloom with Moore and Van Allen law firm in Raleigh. Evergreen has not yet filed a response.

Relationship gone awry

Evergreen once had a symbiotic relationship with Smoky Mountain Center. Evergreen was in fact created by Smoky Mountain Center, and for two decades Smoky Mountain Center ran the nonprofit.

Now, Smoky Mountain Center no longer has control over the nonprofit it birthed and has been unable to tap the $17 million in cash sitting in Evergreen’s bank account, according to the suit.

Evergreen amassed all that cash thanks to money funneled its way by none other than Smoky Mountain Center. Evergreen was initially set up by Smoky Mountain Center as a holding company for property — such as offices for mental health counselors, substance abuse treatment centers, group homes for developmentally disabled adults, and administrative office buildings for the agency.

State law prevented state agencies from buying and selling property, so Smoky Mountain Center used Evergreen as the holding company, which was the sole reason for creating the nonprofit in the first place.

In all, there are roughly 30 properties in Evergreen’s name that were bought and paid for by Smoky Mountain Center.

The lawsuit claims Evergreen unfairly profited off these properties — either in the form of rent or by later selling them — and failed to share those profits back with Smoky Mountain Center as its mission statement requires.

“The Foundation’s conduct has deprived SMC of the beneficial interest to which it is entitled in these properties,” the suit states.

The suit claims Evergreen was merely holding these properties “in trust” for Smoky Mountain Center, and the profits were not Evergreen’s to keep.

The suit claims Evergreen’s “breach and repudiation of the trust agreement” entitles Smoky Mountain Center to the $17 million in cash Evergreen has on its books.

At the very least, the suit says, the money given to Evergreen over the years by Smoky Mountain Center was not used for its intended purpose. The intended purpose was to support Smoky Mountain Center, and instead the money was used to enrich Evergreen, the suit claims, accusing Evergreen of “violation of the uniform trust act.”

Smoky Mountain Center has grown increasingly frustrated that it is expected to pay rent on buildings that it bought and paid for in the first place, allowing Evergreen to amass ever-more wealth.

In many cases, a contract between Smoky Mountain Center and Evergreen stipulates that a building should be provided for the “free and exclusive use” of Smoky Mountain Center, but regardless of the stipulation Evergreen has charged rent anyway.

The money to buy or build these offices to house mental health services originally came from state and federal funds. Nonetheless, Smoky Mountain Center has found itself paying rent to Evergreen — to the tune of $4.2 million over the years, according to the suit.

The lawsuit also alleges deceptive business practices and unjust enrichment by Evergreen. Specifically, Evergreen collected rent for years from a mental health counselors who occupied an office building in Waynesville.

The building, however, wasn’t owned by Evergreen. It is owned by Haywood County and leased to Smoky Mountain Center, yet Evergreen had claimed to be the landlord and was collecting rent from tenants, according to the suit.

Helping hand

The lawsuit alleges that Evergreen has been derelict in its mission of supporting mental health needs, and for “failing and refusing to use the trust assets for their intended purpose.”

From 2002 to 2008, it made only $33,000 in grants. Over the same period, its assets grew from $13.5 million to $20.7 million.

In the four years since McDevitt left Smoky Mountain Center, Evergreen has only provided financial assistance to the mental health agency one time, according to the suit. Evergreen in 2009 gave Smoky Mountain Center a $200,000 grant to help offset state budget cuts of $4.6 million.

But McDevitt claims Evergreen’s mission is not to provide financial assistance solely to Smoky Mountain Center, but rather to support the network of mental health providers in the region. Smoky Mountain Center once served as a service provider, but is now merely an administrative arm, McDevitt said.

“Evergreen has always existed for the benefit of the citizens of WNC with disabilities,” McDevitt said.

Evergreen has made a half dozen or so small grants for other mental projects over the past four years. Exactly how many and for how much is unclear as Evergreen has not provided that information to Smoky Mountain Center.

Evergreen’s unwillingness to share what grants it was making had been a source of contention with Smoky Mountain Center. The lawsuit asks the court to compel Evergreen to produce an accounting for the money coming in and going out, as well as its assets.

Smoky Mountain Mental Health appealed to Evergreen’s board of directors over the past two years to come to a better working relationship — one that would ultimately result in Smoky Mountain Mental Health being able to tap Evergreen’s wealth. But the two failed to come to a resolution, prompting the lawsuit.

At stake is the level of services available to hundreds of people in the seven western counties who suffer from mental illnesses. Smoky Mountain Mental Health has had to scale back mental health services in the face of state budget cuts.

The impact would have been lessened had Evergreen fulfilled its mission and provided financial support for Smoky Mountain Mental Health.

Evergreen’s board of directors has previously asserted that Smoky Mountain Center is trying raid its trust fund in what amounts to a money grab.

The construction downturn has led Haywood County to lay off its steep slope engineer, a position created during the heyday of mountainside home building.

The county can no longer justify having an engineer on its payroll to oversee steep slope regulations, according to County Manager Marty Stamey.

“Because of the downturn in the economy and construction and development, there wasn’t enough work to support a fulltime county engineer,” Stamey said.

The county brought an in-house engineer on board in 2007, shortly after passing steep slope building regulations. When the rules were being mulled over and hashed out, the construction and building industry contended that the county would need an engineer to oversee the technical aspects of the ordinance.

But then came the building crash.

“It just tapered off and slowed down so much,” said Mark Shumpert, the former county engineer who has landed a new position with an engineering firm in Greensboro.

Over the past two years, Shumpert estimates fewer than 10 mountainside construction projects have been subject to the county’s steep slope ordinance.

The county engineer isn’t the only one laid off by the county because of the construction slowdown. Fewer homes being built means fewer septic tanks to inspect, fewer building permits to issue, fewer land deed transactions to record, fewer construction sites to monitor for erosion. Nine county employees who interfaced with the building and real estate industry have been laid off over the past three years as a result. In addition, several employees in related departments have seen their work weeks cut to only 36 hours.

As a certified engineer, Shumpert was among the 10 highest paid workers in the county, with an annual salary of $75,000.

The job of overseeing steep slope construction will now fall to Marc Pruett, the head of the erosion control department.

“With Marc’s expertise, I feel very comfortable with his knowledge and staff being able to do it,” Stamey said.

Builders, earth-movers and contractors were nervous at first about working within the guidelines, fearing they would stymie development. That’s not the case anymore, Pruett said.

“I think the grading community and the contracting community has gotten used to it after all these years,” Pruett said.

The standards only kick in when slopes exceed a certain threshold — namely being too tall and too steep. Judging by the number of construction projects that actually meet that threshold, it has proven fairly liberal. Very little mountainside construction exceeds the too-steep or too-tall threshold to trigger the slope ordinance.

“People are building under the threshold,” Pruett said.

In the rare case the ordinance is triggered, it doesn’t make the particular slope off-limits for building. It simply requires the builder or grader to submit a slope plan penned by an engineer or similar professional — intended to make sure the construction is done in a safe way and won’t collapse.

Initially, the theory was that a certified engineer was needed to inspect plans being submitted by builders and their respective engineers.

While it turned out not to be as complicated — or restrictive — as feared by the development industry, it was helpful to have an engineer overseeing the ordinance the first couple years, Shumpert said.

“We ironed out a lot of kinks,” Shumpert said. “It had to be put into effect and worked with.”

Part of Shumpert’s job was simply meeting with developers and builders to explain the regulations.

“A lot of it is an education to let folks know what is acceptable,” Pruett said.

Having an in-house engineer also came in handy when landslides hit, but the county can always hire an engineer on an as-needed basis, Shumpert said. The same holds true if a big mountainside subdivision comes along needing a higher level of critique.

“There are ways around it without having a fulltime person there,” Shumpert said.

There’s likely another reason an in-house engineer didn’t turn out to be such a necessity after all. The steep-slope ordinance was watered down by county commissioners serving at the time of its passage. What was ultimately passed was a weaker version of the rules initially suggested by the county’s planning board, meaning fewer mountainside construction projects actually meet the threshold for slope review.

Over the past year, Shumpert ended up working almost fulltime for the county’s landfill operation. The landfill was being expanded, and Shumpert oversaw the excavations, as well as designing the best configuration for trash deposits.

Pruett said Shumpert was always fair to developers while making sure the ordinance was followed.

“He was a good person to work with. He was a real honest straight up person,” Pruett said.

Trail maintenance has an obvious benefit: it’s darn good exercise. But for Becky Smucker, a volunteer trail crew leader in the Pisgah National Forest, it carries a deep satisfaction.

“Those of us who work in jobs that produce abstract results, trail work is a concrete, immediate result that you can see,” Smucker said.

It’s also gratifying when other hikers happen by, profusely proclaiming their appreciation for the volunteer trail workers. After the small talk, Smucker is often pressed into service as a trail concierge.

“Especially in the wilderness areas where trails aren’t blazed people can be misplaced, so we pull a map out of our pocket and help them with where they are going,” Smucker said.

Smucker, 60, who works for the Appalachian Trail Conservancy in Asheville, has been a hiker for much of her life before making the jump to trail maintenance four years ago. She is now the leader of her own Saturday crew that works in wilderness areas, including a lot of time in Shining Rock and Middle Prong in Haywood County.

“I just love being out there no matter what I am doing,” Smucker said. “I just truly love the outdoors.”

But, the camaraderie with fellow trail nuts is a close second when it comes to what motivates her to give up two Saturdays a month.

“As much as it is an outdoor experience, it is a social experience. There is not a much better way to get to know people than being out on a trail getting tired and sweaty and working through problems together to accomplish something,” Smucker said.

Some tasks are more of a chore than others, however.

“Some trail work is just plain tedious. Lopping rhododendron, lopping dog hobble, lopping blackberries are the worst,” Smucker said. “Clearing a downed tree is a whole lot more challenging and fun.”

Next time you hike a trail, pause a minute and give silent thanks to the legion of trail volunteers who have taken up arms and engaged in hand-to-hand combat with the forest, hacking back the undergrowth and clearing obstructive logs.

Volunteer trail crews devoted 28,000 hours of labor in North Carolina’s national forests last year. It often seems like an uphill battle, with the earth constantly trying to reclaim the zigzag of footpaths cut through mountains, but so far crews are holding their own.

“The trails, I think, are really in good shape,” said Mary Gollwitzer, a hiker in Haywood County.

Before Gollwitzer leads a hike for her club — known as the Leisure Hikers — she makes a practice of scouting the trail ahead of time.

“I don’t like to all of a sudden lead a hike and never have gone on it myself. I stay away from that because I don’t know what to expect,” Gollwitzer said.

She might revise the hike plan if the trail is too steep or has large boulders to scramble over, but she’s never ruled out a hike for the club because of maintenance issues.

Volunteer trail crews make sure the cumulative mass of fallen limbs and downed trees don’t eventually overwhelm trails. They build back washed out bridges, repair eroding trail beds, fix soggy sections by diverting water from the trail, and cart out lots and lots of trash.

There are more than two dozen volunteer groups in the mountains that lend their sweat and muscle to take care of trails. The biggest is Carolina Mountain Club, which runs six volunteer trail crews that comb the mountains several times a week fixing problem spots on the trail.

“Our primary mission is to promote hiking in Western North Carolina, and of course, that means we need trails to hike on,” said Marcia Bromberg, president of Carolina Mountain Club.

Carolina Mountain Club logged 17,344 volunteer hours for trail maintenance in 2011, covering about 400 miles of trail.

Carolina Mountain Club is a stickler for detail when it comes to their trail work, approaching their maintenance reports with a level of notation and specificity you would expect from a NASA shuttle launch.

Some trail volunteers pack their handheld GPS unit, able to catalog the exact trouble spot.

“I observed a dead fall at E 36404, N 3946090 whose removal will require a later trip,” crew leader Wayne Steinmetz reported on a trail scouting trip.

Or, “I observed that ice covered the trail at E 365491, N 3946623 (WGS 83 horizontal datum).”

Their trail maintenance log from 2011 goes on like this — for 190 pages — detailing the who, what, when and how of more than 1,200 volunteer work outings held last year by their various trail crews.

“Hiked in from Sunburst on FS 97 and 97H. Cleared several simple downs, repaired tread at two wash locations and lopped rodies and beech sprouts along uphill side of trail,” Paul Dickens wrote in his report of a workday in the Middle Prong Wilderness in Haywood County last January.

Most trail reports are highly clinical in nature, but you can always tell when Becky Smucker’s come through. She can’t resist throwing in a line about the weather and her botanical findings of the day.

“We did a spring scout of Shining Creek Trail …We removed downs, lopped some, fixed some drainage, reworked one major tread problem, removed some fire rings and carried out a little trash. It was a gorgeous spring days, and giant Vasey’s trillium was in bloom,” Smucker wrote in one report from a workday near Cold Mountain in Haywood County last May.

Strength in numbers

Several volunteer trail groups have sprung up to take care of trails in a very specific area, such as Friends of Whiteside Mountain in Highlands, or of a particular trail, like the Bartram Trail Society or Benton MacKaye Trail Association.

One of these hyper-local groups is the Friends of Panthertown in the Cashiers area of Jackson County — a group united by their love for the place known as “Yosemite of the East.”

The idea of small-scale, local groups taking care of their own little slice of trails is a model the forest service would like to emulate in its quest to build a larger volunteer base, said Jason Kimenker, the director of Friends of Panthertown. The group, which numbers 350 members dedicated to the protection and preservation of Panthertown, has about three dozen trail volunteers who turn out for regular workdays.

In reality, a relatively minute percentage of hikers actually volunteer to work on trails. But adding more volunteers to the mix isn’t a simple solution, Bromberg said. Orchestrating trail crews is complicated and time consuming.

“There are various skill levels, everything from trained sawyers and people like me who go out with my loppers and that’s about the best that I’m going to be able to do,” Bromberg said.

While hikers constitute the vast majority of volunteers working on trails, mountain bikers have upped their presence considerably in recent years. Several mountain bike chapters hold regular trail workdays. They concentrate their efforts in popular mountain bike destinations, like Tsali, Bent Creek and DuPont State Forest.

Horseback groups have historically been the least represented in trail maintenance circles but have been pitching in more in recent years.

Where the forest service can’t keep up, “friends of various stripes have come in and taken a piece of the burden off them,” Bromberg said.

The Wilderness Society last year launched a trail crew to focus on maintenance specifically in national forest areas designated as “wilderness.” Wilderness areas are a challenge when it comes to trail maintenance because power tools aren’t allowed, which means no chainsaws.

The Southern Appalachian Wilderness Stewards uses a combination of volunteer and paid trail crews, with the help of a grant from the National Forest Foundation.

“It was birthed to take some of the pressure off the trail clubs, which found they couldn’t support more wilderness designations if they couldn’t take care of their trails,” said Brent Martin with The Wilderness Society’s Southern Appalachian field office in Sylva.

Waynesville is getting its Main Street bakery back, but not just any bakery.

City Bakery, a well-known café and bakery with two locations in downtown Asheville and a successful wholesale product line, will move in to the space formerly occupied by Whitman’s Bakery. The community mourned the loss of Whitman’s as a beloved local institution that anchored downtown Waynesville for decades but is now rejoicing the arrival of City Bakery.

“It is just amazing. People are jumping up and down literally. We are blown away by the excitement in this town. Just blown away,” said Jeff Smith, who will manage the Waynesville location along with his wife, Megan. “I know what a need there is for a bakery and café like this.”

Megan, 35, and Jeff, 41, both live in Waynesville not too far from downtown. Their miniscule commute is a serious perk given the hours bakery managers typically have to rise in the morning.

“We are no stranger to what kind of grind it will be and we are OK with it,” Jeff said. “Megan and I is who you will see day in and day out.”

Megan’s parents are the owners of City Bakery. She has worked for the family business in the past, running both of their Asheville stores.

Pat Dennehy, the owner of City Bakery, said he constantly heard from customers and friends wanting the family to open a Waynesville store.

“When I see people I know around town they say ‘I love you guys. When are you coming to Haywood County?’” Dennehy said. “We wouldn’t be doing it unless we thought it would work.”

Be forewarned: Waynesville isn’t just getting a bakery. City Bakery does a booming café business, serving up healthy but scrumptious sandwiches, wraps and soups for lunch, plus stellar breakfasts.

“We have a cheddar scallion biscuit with bacon, egg and cheese,” Dennehy hinted.

While the City Bakery menu clearly has items that cater to the adventurous tastes of their urban Asheville customers — like apple chutney and brie on focaccia and tempeh reubens — Waynesville actually has pent up demand for a specialty bakery and café.

“I think it is time,” Jeff said. “They are ready for this kind of menu.”

There’s one thing missing from the City Bakery menu, though, that Jeff says he plans to create, in part to pay homage to a favorite Whitman’s mainstay.

“I’m working on the right pimento cheese recipe,” Jeff said.

Pimento cheese isn’t the only thing Waynesville’s location can take credit for when it comes to City Bakery’s menu. Watch out Asheville: here come donuts.

Whitman’s was perhaps best known for its donuts, but they take special equipment and lots of space to make, something City Bakery’s stores in Asheville don’t have. Trucks that come to Waynesville baring bread will return back to Asheville with donuts made here.

City Bakery will employ 20 to 30 people with plans to open by March.

The interior of Whitman’s is currently undergoing a facelift. While the 1970s-era blue wallpaper and wood paneling is being stripped, the Waynesville store won’t have the completely urban-look of Asheville stores that feature lots of stainless steel and glass. The older wooden bakery cases are being replaced as well, which the former owners plan to preserve as a keepsake.

Whitman’s was run by the same family for three generations until 2006, when the Howell family sold it. The bakery quickly declined in popularity and lost its standing as a Main Street institution however, and the new owners were forced to close the doors for good two months ago.

Ownership reverted to the Howells, who began looking for a new buyer.

Jeff believes the business Whitman’s formerly enjoyed under its original owners can easily be rebuilt.

“I think people will at least give us a shot, and if we don’t drop the ball, I think we will be fine,” Jeff said.

City Bakery purchased Whitman’s old equipment and is leasing the building. The family has enjoyed working with the Howells to get a bakery up and running on Main Street again, Dennehy said.

“It was a family owned business similar to ours. I like that continuity,” Dennehy said.

All five of the Dennehy’s children have worked for them on and off.

“At one point or another, every one of them has been involved in various capacities of the business,” Dennehy said.

City Bakery’s evolution

Dennehy came to Western North Carolina in 2000 to take the job of general manager at the burgeoning Harrah’s Casino in Cherokee. It was a perfect landing spot after a long career in the casino industry, known for moving its managers from one casino to another every few years.

“Why do people want to retire to WNC? It is a beautiful relaxed area, and the people are wonderful,” Dennehy said.

Finding a home in Haywood County, Dennehy and his wife were exactly where they wanted to be as they headed into retirement — only to find themselves owning a successful trio of bakeries with a growing wholesale side. Since Dennehy was still managing Cherokee’s casino, his wife ran it in those early years.

“She always wanted to have a business,” Dennehy said. “We also wanted a business our children could be involved in.”

The Dennehy’s children were already grown, but all five followed them to the mountains one by one.

Ruth’s brother had started City Bakery shortly before the Dennehy’s moved to WNC. They took over the bakery from him and immediately began growing the beloved neighborhood bakery into a widely known brand in the greater Asheville area.

They opened a separate production facility to free up more retail space in their Charlotte Street location and later opened their signature store on Biltmore Avenue in the center of the Asheville’s downtown heartbeat.

The reason? They simply couldn’t keep up with demand, Dennehy said.

About 75 percent of City Bakery’s business comes from its existing two retail locations. The other 25 percent is wholesale, with their products appearing in 25 restaurants and grocery stores like Earth Fare, Greenlife Grocery and Ingle’s grocery stores in Buncombe.

Jeff hopes to expand the wholesale market in Haywood and other counties further west.

“I know there is potential there,” Jeff said.

It won’t exactly be new territory to him, as he’s worked the past three years in sales for Sysco Food Distributors, the largest food delivery company for restaurants in the region.

Smith plans to tap farmers and the local food scene in Haywood for their produce, following in the footsteps of the Asheville stores, which use local goat cheese, local honey and local roast beef in their menu items as well as local produce.

“I am excited about the tailgate markets and using local folks that actually grow stuff. It is sustainable and local. It is just the right way to go,” Smith said.

Two well-known Democrat senators from the mountains who lost in 2010 and hoped to reclaim their seats this year faced a conundrum.

Joe Sam Queen of Waynesville and John Snow of Murphy both wanted to run for the Senate again, hoping to take back the seats they lost to Republican challengers two years ago. But they found themselves at a stalemate after suddenly landing in the same political district when new legislative lines were re-drawn following the Census.

Queen’s home turf of Haywood County — once part of a jumbled legislative district that reached as far north to Mitchell and as far east to McDowell County — was grouped into a new district neatly comprised of the seven western counties. It put Queen and Snow in competition in their bid for office.

The upshot: only one of them would ultimately have their name on the ballot come November. Their choice: former political allies would have to run against each other in the May primary or one of them would have to gracefully concede.

As the clock ticked toward the opening day of candidate registration in February, no easy resolution was on the horizon.

“I think we are both electable,” Queen said as recently as last week. “I am not going to run against John and he is not going to run against me. We will evaluate which one of us should run.”

But the two political allies found an easy out after all. The unexpected and sudden news that Rep. Phil Haire, D-Sylva, would retire after 14 years in the legislature presented a solution.

Queen called it a “game changer.”

Rather than make a bid for the Senate, he would instead run for Haire’s old House seat.

“If (Snow) really has the fire in his belly and wants to do it, I will support him and run for Phil’s seat,” Queen said. “It is an attractive choice. It is serendipitous. It keeps experienced legislators in the game with the opportunity to serve.”

The Democratic Party is likely relieved by the development. At a regional meeting of the Democratic Party leaders from 12 counties last week, Brian McMahan from Jackson County cautioned against wasting political energy and money in a primaries against their own.

“Let’s harness our energy,” said McMahan, the chairman of the Democratic Party in Jackson County. “We don’t need to worry about primaries. Nov. 6 is Election Day. That’s where we need to make a difference.”

Queen said the party needn’t have worried.

“I assure you we were going to work it out because that’s what kind of guys we are,” Queen said. “I certainly would not have run against him.”

In the end, had it not been for the Haire “game changer,” it appears Queen would have had to be the one to acquiesce regardless. Snow said that he was committed to run for the Senate regardless of what Queen decided, however.

“To be real honest with you, I was willing to go through a primary if I had to,” Snow said. “I think it is obvious I would be the stronger candidate.”

Snow believes he has better name recognition in the seven western counties than Queen would have had. As a judge, Snow presided over court in those same seven counties for 30 years, plus served for six years in the legislature representing those counties already.

Queen, 61, pointed out that he is nine years younger than Snow. He believed he likely had more years of political service ahead of him — and in Raleigh, tenure can be everything.

“The biggest difference between John and I was our age. Who is going to claim this seat for a decade?” Queen asked last week.

Snow, meanwhile, pointed to his record as a more socially and fiscally conservative Democrat, a leaning that squares with voters in the seven western counties.

“Anybody that looks at my record can see I am probably one of the more conservative Democrats in the Senate,” Snow said.

Just as Rep. Heath Shuler is one of the more conservative Democrats in Congress, Snow said.

“That is a reflection of the people we represent,” Snow said.

Queen’s decision clears the path for Snow to emerge as the Democratic candidate in a November rematch against Sen. Jim Davis, R-Franklin, who squeezed out a narrow victory over Snow by just 161 votes two years ago.

Queen, however, will face a primary election against long-time judge Danny Davis of Waynesville, who has also announced plans to run for the seat formerly held by Haire.

Snow said that he would back Davis in the primary race as he and Davis both served on the judicial bench together for years and are personal friends.

South Main Street is a mess.

That’s the message from a consultant hired by the town of Waynesville to develop a revitalization plan for the struggling artery.

The consultant spent six months studying South Main and developing a master street plan. The challenges are great, based on the less-than-flattering language that peppers his report: deteriorated condition; not economically healthy; dilapidated structures; no distinct image; scrubby patches of overgrown and unattractive weeds; seldom pedestrian traffic; high vacancy rate.

Sometimes it takes an outsider to deliver such blunt news, Waynesville Town Planner Paul Benson said. Locals come to accept the status quo, and may not realize how bad it actually looks. Besides, the slow decline of South Main happened over decades, making the changes less noticeable until it became a blight on the town.

SEE ALSO: A bold fix for South Main Street

Many South Main property owners salivated over the coming of Super Walmart and Best Buy, putting their lots and businesses on the market before the big-box development had even broken ground. Four years later, they are still waiting for the land rush, wondering why Applebee’s hasn’t come knocking yet.

The answer is because South Main Street simply doesn’t look good, according to Rodney Porter, the corridor consultant who works for LaQuatra Bonci in Asheville.

“One of the challenges to this corridor is how do we make the road itself more accessible and pedestrian friendly. The other is how do we address the economic downturn of this corridor,” Porter said.

Luckily, the solution happens to be one and the same, he said.

“If you can design a road that is pedestrian friendly you can generate a more successful corridor,” Porter said. “A simple change of image will provide a new address for economic investment.”

The same elements that would make the road attractive to pedestrians — sidewalks, curbs, street trees, crosswalks, benches, a landscape median — will make it attract to commercial development, Porter contends.

“Pedestrian traffic is a critical ingredient to revitalizing a corridor,” Porter said. “It is critical to have this corridor be inviting and provide a sense of safety and welcome.”

Failure to do so could forever sentence South Main to its destitute status, according to Porter’s assessment. Traffic on South Main Street has actually declined over the past three years, according to traffic counts taken by the DOT shortly after Super Walmart opened and new traffic counts taken by Porter’s team.

“More people are actually going around South Main Street to get to Walmart. They are just hopping off the exit,” Porter said.

They aren’t being drawn to South Main, and instead opt to hop on and off the adjacent highway to get to Walmart. Until South Main’s appearance improves and lures more traffic, new businesses won’t be motivated to follow suit, Porter said.

“Until you set the stage with a new road coming in, there is no incentives for redevelopment along that road,” Porter said.

Benson agrees with the premise: make the street attractive and inviting, people and businesses will follow.

“It needs to be a more attractive environment,” Benson said. “That will be a key to promote retail activity.”

It will take more than throwing in a row of trees along the road and putting in sidewalks, however.

The road itself is missing many of the bare essentials. It lacks curbs, with parking lot after parking lot morphing into the road. The net result: a giant plain of asphalt.

Porter said South Main’s character is defined by the “overwhelming presence of parking lots.”

In the quest to bring renewed life to South Main, the middle-class neighborhoods of Hazelwood will be critical, according to Porter.

“The lack of users on South Main Street has in part contributed to the dereliction of the corridor,” Porter said. “The adjacent residential population is no longer devoted to the commerce on South Main Street.”

Benson agreed on this point as well.

“The idea is to connect with the neighborhoods, to make it easy for those folks to walk or ride their bike or drive to the corridor. A lot of it is based on a complete street concept that all users should feel comfortable on the corridor, not just the cars and trucks,” Benson said.

What’s next?

Porter was hired by the town to develop a proposed plan for South Main Street as a community-driven alternative to another plan devised by the N.C. Department of Transportation.

The DOT plan was less nuanced and more utilitarian. It calls for a wider road with fewer pedestrian features — concrete rather than planted medians, no dedicated bike lanes, narrower sidewalks and more lanes.

The town felt it wasn’t in keeping with its vision for South Main, and that’s largely what prompted the town to undertake an independent master plan.

“This is definitely a more tailored approach than the DOT study,” Benson said.

The town’s independent feasibility study cost $55,000, with 80 percent of the cost paid for with a federal planning grant.

Two community workshops were held to engage the public in creating the plan. Property owners, businessmen, as well as average residents, turned out to voice their vision for the corridor.

The town is now hoping the public will voice its opinions again now that a draft plan is on the table. A meeting to solicit input will be at 5:30 p.m. Tuesday, Jan. 17, at the new Waynesville town hall building.

Porter said “community consensus” is important to the success of the plan.

Based on the feedback, the consultant will finalize the plan before its adopted by the town. The town will then present its plan to the DOT in hopes of seeing the features it wants incorporated.

The DOT has cautioned that its feasibility study of South Main wasn’t intended as a detailed street design.

“It is not the Bible. It is not the final word on what is going to happen,” said Derrick Lewis, DOT road planner in Raleigh overseeing the DOT’s South Main feasibility study. “As a project moves thru the planning and design stages, the number of lanes, as well as the intersection configuration and design are always up for discussion based upon updated information and community input.”

The feasibility study took a broad look at how to best accommodate projected traffic 25 years from now. Details would not be hammered out in the final design stage.

Lewis said the DOT will listen to the town’s recommendations and decide whether to incorporate any of them. The DOT’s feasibility study is still considered in draft form.

“We put it in the holding pattern to see if there are any magic bullets come out of this study,” Lewis said.

Benson hopes the DOT will be receptive.

“I’m hoping he will look at this and won’t have any problem with what we came up with,” Benson said.

Based on a surface reading of the town’s plan, Lewis noticed several design features that may not jive with DOT street standards.

Want to weigh in?

Public input is sought on a plan to makeover South Main Street in Waynesville. A proposal to turn it into a vibrant, tree-line boulevard with pedestrian appeal will be presented at 5:30 p.m. Tuesday, Jan. 17, at the new Waynesville town hall building.

Ideas and critiques from the public will be solicited. To view the plan click here.

New owners of the high-end Balsam Mountain Preserve development aren’t daunted by the choppy waters of Western North Carolina’s real estate landscape.

Despite the still tepid demand for pricey second homes in the mountains, they say they have charted a course that will bring the beleaguered development out on the other side of the storm still raging across the rest of the region.

The 4,400-acre mega-development — one of the region’s few mountainside golf developments that can rightfully carry that tag line — has its share of battle scars. It’s been through foreclosure, repossessed by investors, hawked to the lowest bidder, babysat by an out-of-state caretaker, then put up for sale.

Now, a rescue of Balsam Mountain Preserve has come full circle. Two wealthy homeowners in the development teamed up to buy the development for $6 million — a fraction of what it was once worth.

If there’s ever a development where millionaire homeowners could emerge from the ranks to become the owners, it’s Balsam Mountain Preserve. Harry Avant of Louisiana and David Carlile of Texas knew each other previously from the oil and gas industry, even before buying their respective property in Balsam Mountain Preserve several years ago.

They have hired two former members of the Balsam sales team to come back and run the place. Jimmy McDonnell and Bruce Fine both worked together at Balsam Mountain Preserve under the original owners and developers.

“We know the owners, we know the property, we know the employees, we know the project, we know the market,” Fine said of their return, this time as president and vice president.

The hunt for solid ground in today’s new real estate landscape is more than just a financial deal for the new team.

“If there wasn’t a significant upside from a financial and business perspective we probably wouldn’t have done it. These guys are not a nonprofit entity,” Fine said. “But to save a place that you really have an emotional connection to, and it could be a good business decision at the same time, is a win-win overall.”

For the past 18 months, Balsam Mountain Preserve has been in limbo. The former owners defaulted on $19 million in debt and went into in foreclosure. The development landed in the hands of a private equity firm that immediately began looking to unload it.

So what, exactly, did Avant and Carlile get for their $6 million purchase of Balsam Mountain Preserve?

For starters, they own a really, really nice Arnold Palmer golf course. All the amenities, from the swimming pool to tennis courts to clubhouse to riding stables, are also included.

But as for what’s marketable — the pieces of the development that are worth something — there are about 130 to 150 home sites left to sell off.

Only one lot has sold in Balsam Mountain Preserve this year, however.

“2011 was kind of a lost year for Balsam. It was for sale and people knew it was for sale,” Fine said.

Despite the unimpressive showing, the new team isn’t fretting over whether Balsam Mountain Preserve will make it. Optimism over the new owners is already fueling sales, Fine said. There are two contracts pending — one on a new lot and one on an existing lot being resold by a property owner.

“We have more activity in the week we have owned this place than we’d had all year,” Fine said early last month. “People are moving forward now because it is stable. They like the story about the homeowners who have joined together and bought the place.”

Few golf course developments can claim to have that bumpy road behind them.

“Every other one has the loom of foreclosure and takeover,” McDonnell said.

Fine said few are going to emerge as intact as Balsam.

“There are so many communities in the mountains that have nothing there other than a front entrance and some renderings on paper.  Those are the places that have fallen off the end of the earth,” Fine said.

At Balsam Mountain Preserve, there is enough “critical mass” already in play, Fine said. The golf course is finished, the swimming pool has water, a restaurant and clubhouse are functioning. Roads actually lead to the lots — a novelty compared to some subdivisions that lack even that bare essential.

Most importantly, though, are the 70 homes on the ground and another 110 property owners of lots. Too many subdivisions in the mountains are empty ghost towns, and just like no one wants to eat in an empty restaurant, no one wants to be the first to build — not when it’s such a buyer’s market. And that’s why homes on the ground are an important part of Balsam’s critical mass.

Nowhere to go but up

As the rest of the nation plunged into a recession in 2008, WNC seemed insulated from the real estate crash — its quality of life, desirable views and retirement reputation helped it hang on.

But by the end of that year, the economy finally caught up with the region — and with Balsam Mountain Preserve. Lot sales simply evaporated.

With no cash coming in, the former developers Chaffin and Light, a highly reputable company known for massive eco-developments from South Carolina’s coast to Colorado, defaulted on its $19 million loan.

Chaffin had bargained hard for a work out, hoping to get an extension or refinance on the outstanding debt. Meanwhile, property owners at Balsam made a bid to save their own development from foreclosure. They raised $8 million and explored forming their own LLC to bail out Balsam Mountain Preserve and own the development themselves.

But the private equity firm, TriLyn, was unwilling to negotiate for anything less than a full payoff of the $19 million owed.

Marc Antoncic, the managing partner of the firm, arguably was in a tough spot. He was supposed to be earning investors a return on their money — not losing their money. So he had a choice. Cut his losses, take what he could get and get out — even if it meant selling Balsam at a rather substantial loss.

His other choice was to step in to the developer’s shoes himself, hoping to turn it around.

“You can’t rescue everything, but you can’t just sit back and hope it goes away,” Antoncic said in an interview 18 months ago, shortly after his take over. “If you bail today, you lose all that. We would turn over a good asset to someone else.”

In hindsight, it now seems he made the wrong choice.

He didn’t turn it around, and only got $6 million for the development in the end.

“Literally every deal they had on the table, whether it was Jim Chaffin or the homeowners, everyone of those was better than what they ultimately got,” Fine said.

“They had some great opportunities in front of them they chose not to take,” McDonnell agreed.

Homeowners, for their part, are optimistic for the first time since 2009 when Balsam Mountains Preserve headed down the path to foreclosure.

“Ever since then Balsam has been in a real state of uncertainty,” Fine said.

What would happen to the golf course had been one of their biggest fears. Well-groomed fairways with that perfect phosphorescent green hue come at a steep price. The golf course had been losing $1 million a year. The original developers, Chaffin and Light, were underwriting the cost of the golf course operations. Picking up that price tag is part of what sunk the developers.

After foreclosure, homeowners had to pony up the money to operate the course.

A new model

There are only a handful of developments in WNC in the same league as Balsam Mountain Preserve: of a similar acreage, prestige, price range and quality. And they too are seeing a comeback, suggesting the market has at long last bottomed out, Fine said.

“Prices are lower compared to where they were at in 2006, but they are coming back,” Fine said. “It sounds cliché-ish, but for someone who wants to be here this is when people want to strike. We aren’t at the bottom anymore.”

That financial strategy is part of Fine’s sales pitch. But the other part is far more emotional.

“The person who is waiting for the bottom is putting off living their life,” Fine said.

Indeed, the pent-up demand is why Fine has such a rosy outlook for 2012.

“The dynamic is people have put their plans on hold for anywhere from three to four years,” Fine said. “I’ve been sitting on the sidelines, I’m not any younger, I’m not any healthier, my grandkids are getting older.”

And that reality could drastically change the real estate paradigm in WNC. Before, baby boomers looked for lots to build their dream home on. But building a house — from deciding on a layout for the master walk-in closet to choosing the color of granite for the kitchen counter — can take two to three years. These days, prospective buyers want to get on with it — and perhaps spare their marriage the strain of a custom-built house — even if it means they won’t be picking out their own light fixtures or tile floor design.

“People want something they can move into,” Fine said. “In conjunction with that dynamic, people are also no longer buying what they can afford, they are buying less than they can afford in a lot of cases.”

People used to buy at the upper end of their limit — assuming that real estate would always be worth more next year anyway. But with appreciation less of a sure bet these days, second-home buyers are rethinking.

“Seriously, do I need 6,000 square feet in retirement? That’s how affluent people are thinking today,” Fine said.

Which means Balsam Mountain Preserve must retool its model — as with the rest of WNC’s developers.

“It is not going to be all about 2-acre single family home sites,” Fine said. “If you sit around and wait for individual home site buyers to come visit you one at a time, it will be years and years and years before you sell through all your availability.”

What’s in Balsam Mountain Preserve’s cards now would have been borderline blasphemy several years ago: smaller lots, pre-built homes, and even perhaps townhomes.

“Balsam has never had that, ever,” Fine said.

There are about 35 lots in the current phase of the development already platted and ready to sell. Another 100 or so are in the works, and will like take the form of smaller, more closely spaced lots rather than larger, spread-out ones. And, they could be sold with homes already on them rather than empty lots.

As a development, Balsam Mountain Preserve doesn’t particularly want to get into the spec home business. Developers generally sell lots, builders build homes.

But that’s where Balsam Mountain Preserve once again hopes to tap its unique base of homeowners.

Homeowners, eager to see their own community succeed, may actually finance construction of model homes by a builder. The homeowner would theoretically be helping out the builder they used and liked when building their own home, make a little money and help land new neighbors to keep Balsam Mountain Preserve stable.

“The developers who can facilitate these alliances between people who can finance — i.e., non-banks — and the builders, those are the communities that are really going to thrive in this segment,” Fine said.

Two dogs in the rural countryside of Upper Crabtree in Haywood County died from antifreeze poisoning last week, a tragic fate that has left the dog owners wondering whether it was an accident or malicious deed.

Pat and Stone Reuning and their 4-year-old son woke up on Christmas morning to find their dog Badger staggering and throwing up profusely. The progression of symptoms was rapid and alarming. Pat had to make lots of noise inside so her son couldn't hear Badger having seizures in their backyard, and by the afternoon the dog was clearly in such agony that Stone shot it.

Their neighbor's dog, Abraham, started to show the same signs the next day, and his owner Ryan Sutton rushed him to the vet.

Unfortunately, it was too late. Antifreeze poisoning has to be caught within four to five hours after it is swallowed for treatment to save the animal's life, said Dr. Kristen Hammett, the owner and senior veterinarian of Waynesville Animal Hospital.

As soon as they got home, Sutton's wife typed up a flyer about the antifreeze poisoning and set out on a mission, hoping whoever had left antifreeze out would put it up and everyone with dogs — which is just about everyone in Upper Crabtree — would keep them close.

"She went to every neighbor in our immediate area," Sutton said.

Sutton called one neighbor who he knew "does a lot of mechanicing" and asked if he'd possibly left out used antifreeze.

"He said he knows better," Sutton said. "It is so well known that it is toxic, not just to dogs but to little kids, too."

That's what makes Sutton and the Reuning's so suspicious of the antifreeze poisoning.

"At first, I thought it was an accident. I really did," Pat said. But now she's not so sure. "Someone has been out here poisoning dogs — that's what we think," she said.

Badger and Abraham went everywhere together, whether loafing at each other's house or adventuring about. They mostly roamed on the Sutton's 150 acres but occasionally would stray. Dog owners are supposed to keep their dogs on their own property, according to Haywood County's animal laws. But, it's almost a given that in rural areas like Upper Crabtree, dogs can be found wandering.

"People used to let their dogs roam in this community, or at least they used to," Pat Reuning said.

"I growed up in Crabtree, and that's the way most people did," Sutton added.

Abraham is the second dog Sutton has lost to antifreeze poisoning in less than two years. Both were English Setter bird dogs, which run about $1,500 each not counting the hours of personal time spent training them. Sutton, an avid bird hunter, plans to buy another, but this time will put in an underground fence.

"I don't want another one to die. I am going to have to protect my investment this time," Sutton said.

Sutton said they will probably never know for sure whether it was an accident or deliberate.

"We thought and thought about what could have happened. It seems somebody is doing it on purpose," Sutton said.

One of their neighbors has complained about several dogs in the area, including Badger and Abraham.

Just before the antifreeze poisoning, Abraham was caught eyeing the neighbor's chickens so the neighbor tied him up until Sutton could come over and get him back.

Just before Sutton's last dog died a little under two years ago, Badger was caught eyeing the chickens and was accused of picking one off.

The neighbor had called Haywood County Animal Control to complain more than once about dogs in the neighborhood.

Haywood County Animal Control investigated the antifreeze poisoning last week several days after it occurred. If someone did it on purpose, they could be charged with animal cruelty.

"You have to be able to prove that the person deliberately set it out and was malicious about it. Whether they were upset with the person and the animal was going to pay the price or whether they were upset with the animal," said Jean Hazzard, the director of Haywood animal control.

Hazzard said she has not seen a case of deliberate antifreeze poisoning.

"Sometimes it is not always deliberate. You would be surprised the people who don't realize that dogs will lap it up. It is sweet to a dog," Hazzard said.

For Pat, she is still struggling to explain this first encounter with death and loss to her 4-year-old.

"So far he is still saying 'When is Badger coming back? When is Badger coming home?'" Pat said. "It breaks my heart."

The unusual, toxic properties of antifreeze

It takes just a thimbleful of antifreeze to kill a cat, less for a bird, a smidgeon more for a dog.

Once lapped up, the animal dies a highly unpleasant death in 24 to 72 hours.

Antifreeze tastes sweet to dogs but even the far more finicky pallets of felines have a weak spot when it comes to antifreeze, said Dr. Kristen Hammett, the owner and senior veterinarian of Waynesville Animal Hospital.

The first symptoms manifest almost immediately, with the pet essentially acting like a drunken sailor — staggering, wobbly and often throwing up. Then it clears up, leaving the owner to assume whatever had gotten into their pet is all better. But within a few hours, the irreversible damage of kidney failure has set in, with gruesome and agonizing seizures and convulsions. Blood tests and a kidney examination can confirm antifreeze poisoning.

"It is not something we see every month, but it is not rare," Hammett said. "Sometimes it is accidental, sometimes it is malicious."

In the summer, Hammett always keeps an eye out in parking lots for the telltale green sheen of an antifreeze leak, occasionally spewed out by an overheated radiator. If she spies it, she heads inside and implores the store owner to clean it up right away. She has seen cats die after licking spots of antifreeze from their owner's driveway.

Home mechanics should always dispose of used antifreeze immediately after changing their coolant, she added.

The treatment for antifreeze ingestion is an unusual but surprisingly simple trick of chemistry.

Antifreeze in and of itself is not toxic. The active ingredient, namely ethylene glycol, is technically harmless — except enzymes in the liver convert it into another substance, and that substance causes complete kidney failure.

The treatment for swallowing antifreeze is an IV of grain alcohol straight into the blood stream.

"It keeps the liver so busy converting the grain alcohol it lets the antifreeze pass through the body unchanged," Hammett said.

— By Becky Johnson

N.C. Rep. Phil Haire, D-Sylva, will retire from the state legislature this year after 14 years in office.

Haire will be 76 next year and said that he realized it’s time to trade in the long drives back and forth to Raleigh for some quality time with his grandchildren.

“I am in great health and everything but you don’t want to push the edge of the envelope too hard,” Haire said, citing the 300-mile haul to Raleigh.

Plus, he really wants to go to Alaska.

“I have never been to Alaska. I could never go because the time to go is in the summer and I am always tied up in the summer,” Haire said.

Although Haire said he has known for some time that this would be his last year in Raleigh, he kept the news of his retirement surprisingly close to his vest. Besides him, only his wife knew, Haire said.

“I didn’t want to say anything until now. The cat is out of the bag today,” Haire said Tuesday morning.

SEE ALSO: Who will Haire's heir be?

After Haire made the announcement, word was spread primarily by newspaper reporters, who broke the news to everyone from political analysts to party leaders in the process of calling people to get their thoughts and comments.

Among those who learned this way was Rep. Ray Rapp, D-Mars Hill, who served closely in the legislature with Haire — both as fellow Democrats and as representatives of neighboring legislative districts. Rapp met the news with “a great deal of sadness.”

“I am surprised that Rep. Haire will not be returning to Raleigh and more than a little disappointed,” Rapp said. “I think he has brought a very sharp mind and has been a strong advocate for Western North Carolina over these 14 years. So I can tell you his knowledge and his experience will be sorrowfully missed.”

N.C. Rep. Roger West, R-Marble, served with Haire for 12 of his 14 years in office, representing the counties that neighbored Haire to the south.

Despite being from the opposing political party, West only had good things to say about Haire. They disagreed philosophically on issues at the state level, but when it came to local issues important to the mountains they nearly always worked together, West said.

“Haire was a good legislator. He looked after the people in his district. I enjoyed working with Phil. I can’t say anything bad about him at all. We’ll miss him,” West said.

The two even carpooled to Raleigh occasionally or caught a plane together in Asheville. And besides, Haire’s son is married to West’s niece.

Janie Benson, chairman of the Haywood County Democratic Party, said Haire would be hard to replace.

“I think Phil has represented his district well, and stayed in touch with the people,” Benson said.

Looking back at 14 years of state office, Haire said one of his crowning accomplishments was the Safe Surrender Law, which allows a mother of a newborn baby to turn it over to a responsible party, such as a hospital or police department, and walk away without penalty. Haire fought for the law after a young mother in his district placed her newborn baby in a trashcan. The baby died and the mother went to jail. Haire realized a bill was needed making it legal to safely surrender the newborn without a parent being punished for abandonment.

Haire was also one of the leading advocates of the Clean Smokestacks Acts, and consistently received high rankings from conservation groups for his pro-environment voting record.

But it’s the little things that truly defined Haire’s career, the incremental measures he fought for every day, from funding for the N.C. Center for the Advancement of Teaching in Cullowhee to a highway appropriation for a second entrance to Tuscola High School.

“He’s been really dedicated about working hard for this area,” said former N.C. Sen. John Snow of Murphy, Haire’s counterpart in the state Senate for several years. “He dedicated 14 years to public service, and that’s no small thing.”

Few restaurants could afford to lose $1 on every meal they serve, but in Haywood County school cafeterias, that’s the reality faced every day.

It costs $3.75 to fix a lunch, including the food and labor. But, the federal government pays just $2.79 for students receiving free or reduced lunches — the sector that makes up the majority of kids going through the lunch line.

The loss of $1 per lunch adds up fast considering there are 5,300 lunches being served in Haywood County schools every day. That’s a loss of nearly $100,000 a month.

The plight is universally shared by every school cafeteria.

“You have to buy your food, your equipment, pay your employees and their benefits — you tell me what restaurant could do that at $2.79,” said Sherry Held, the nutrition director of Macon County Schools.

To plug the hole, schools peddle a la carte items — chips, cookies, ice cream, Gatorade and the like. In all, the sale of snacks generates a little more than $1 million a year in Haywood County to cover the losses on the lunch side.

Granted, the chips are the baked variety only and the cookies and ice cream are low-fat. But, they still aren’t healthy per se.

“I would love not to even put those things out there, but we have to offer them to make up that difference,” said Allison Francis, the nutrition director for Haywood County Schools.

In Swain County, a la carte snacks bring in $150,000 a year, money the school lunch program simply can’t afford to do without.

“They are forced to sell items that students will buy in order to generate money,” said Lynn Harvey, the director of child nutrition for the state of North Carolina.

Absent adequate funding from the federal or state government, the burden to supplement school lunches would fall to local school systems. But they, too, don’t have the dollars to spare.

“Most local boards of education would prefer to put their education dollars in the classroom,” Harvey said. “We need to help our decision makers recognize that adequate meals at school is a tremendous part of academic success.”

There is one school district in the state that has put its money where their students’ mouths are. Asheville City Schools subsidizes the school lunch program so elementary school cafeterias don’t have to sell snacks. Water, 100-percent fruit juice and animal crackers are the only supplemental items found in Asheville City elementary schools.

“The school system was willing to kick in funding to make that happen,” said Beth Palien, the nutrition director for Asheville City Schools. “We want to do what is in the best interest of the child.”

She estimates they are giving up at least $75,000 a year.

That’s something that’s simply not possible for most school districts, despite their hearts being in it.

“I would love to see the meals be part of public education like text books and transportation and not have to sell that other stuff,” Francis said.

Francis is grateful that in Haywood County, the local school system covers indirect costs such as electricity, which certainly helps.

Still, Haywood County is losing about $200,000 dollars a year. Right now, the balance is coming from savings, squirreled away in better times. That fund has been depleted to just $600,000 though and clearly won’t last forever.

Options on the table

Cost constraints are the primary hurdle faced by school cafeterias in serving healthier, better quality food.

Cafeteria workers wish they could serve apples instead of apple juice, baked potatoes instead of fries or even fresh green beans instead of canned. Francis recalled one school principal who asked why they couldn’t buy raw chicken breasts to grill instead of serving frozen chicken nuggets.

It costs 16 cents for four ounces of juice, compared to 30 cents for a whole apple, for example.

“Unfortunately a lot of healthier made-from-scratch items cost more. It takes more time to prepare so you have to have more labor,” Francis said.

That’s a luxury Francis doesn’t have. The workforce at the 16 school cafeterias in Haywood County has been cut from 120 to 107 in two years. Francis luckily was able to make the cuts through attrition rather than lay-offs.

Haywood cafeteria workers have seen a cut in their pay in an effort to make ends meet. They used to spend teacher workdays cleaning and repairing kitchen equipment. But this year, they will stay home on teacher workdays and lose nine days of pay as a result.

Baked, not fried

Another hurdle to healthier food is the right kitchen equipment — which, in the end, also comes down to money.

At Jonathan Valley Elementary in Haywood County, a fryer still claims coveted floor space in the kitchen, but it hasn’t been used in three years — at least not as a fryer. Until someone hauls it away, it’s been pressed into service as a counter for hot pots and pans.

Haywood, Jackson, Macon and Swain counties have phased out fryers almost entirely during the past few years.

“We have no fryers in our school cafeterias at all,” said Diane Shuler, the nutrition director in Swain County. “They are baked, steamed, broiled, boiled.”

It wasn’t cheap, however. Cafeterias had to replace their fryers with giant industrial ovens, lined with enough racks to warm hundreds of corn dogs and potato wedges at a time.

“A new oven is $15,000 to $16,000 dollars,” Francis said.

Discontinuing fryers also means more prep work at a time they are trying to cut back on labor.

“We are feeding such a larger volume of students in such a short period of time, to bake enough fries you have to start a lot earlier,” Shuler said.

In Haywood County, Francis budgets a measly $60,000 a year for equipment. Francis guards the money with her life for the inevitable equipment repair or breakdown.

The dishwashers in the schools date to the 1970s, but it would cost $35,000 a piece to replace them — hardly in the realm of possibility until they absolutely won’t function, she said.

“We joke that we use duct tape to hold everything together. We patch it up as long as we can,” Francis said.

Dollars and cents

Half or more of the student body at most schools in WNC qualify for free or reduced lunch. In Macon County, 60 percent of the student body is in the program. Here’s how it works:

•  For students on free lunch, the federal government reimburses the school for $2.79 a lunch. The student pays nothing.

• For those on reduced lunch, the government reimburses  $2.39. The student pays just 40 cents.

• For students who pay out-of-pocket, most school districts charge $2 for at the elementary level and $2.25 at middle and high school. The government kicks in 28 cents for out-of-pocket students.

While there’s little the school system can do about the reimbursement rate from the feds for free and reduced lunch students, it begs the question: why not, at least for out-of-pocket students, charge a price commiserate with the true cost of the lunch?

Out-of-pocket students account for just 10 and 20 percent of the total lunches served in area schools, but charging more for their plates couldn’t hurt. Or could it?

“We would be out pricing ourselves. Parents can’t afford to pay that much,” Francis said.

Raising the cost for out-of-pocket kids would be akin to shooting themselves in the foot, Francis said.

School cafeterias benefit from an economy of scale. It’s better to have those out-of-pocket students buying lunch at the current price than not at all, since the fixed costs of labor and overhead are the biggest expense behind that lunch — not the cost of the food itself. Francis estimates out of the $3.75 she has in every lunch tray, only $1 of that was actually spent on food.

“The more people that participate the better off we are,” Francis said.

But like it or not, schools will be forced by federal pricing mandates, starting next year, to raise the cost of lunch for out-of-pocket students by 10 cents a year during the next several years until it more closely matches its reimbursement level.

Francis had always wanted to go back to school on the side to get her master’s in nutrition. But, now, she is reconsidering which degree she really needs the most.

“The longer I have been in this job, I realize it takes an MBA,” Francis said.

Lunch programs by county

Haywood

• Total annual budget: $4.86 million

• Percent of budget spent on food: 34 percent

• Amount made selling snacks: $1 million

• Federal reimbursements: $2.3 million

• Self-pay lunches: $900,000

• Average number of lunches served a day: 5,365

• Percent that get lunch: 80 percent in elementary, 79 percent in middle, 65 percent in high

Macon

• Total annual budget: $2.5 million

• Percent of budget spent on food: 46 percent

• Amount made selling snacks: $400,000

• Federal reimbursements: $1.575 million

• Self-pay lunches: $450,000

• Average number of lunches served a day: 3,150

• Percent that get lunch: 77 percent in elementary, 66 to 71 percent in middle and high

Swain

• Total annual budget: $1.129 million

• Percent of budget spent on food: 35 percent

• Amount made selling snacks: $126,500

• Federal reimbursements: $642,000

• Self-pay lunches: $178,000

• Average number of lunches served a day: 1,443

• Percent that get lunch: 83 percent in elementary, 77 percent in middle, 66 percent in high

It was only 11 a.m., and already 60 fidgeting children had streamed down the lunch line at Jonathan Valley Elementary School, eagerly eying the pans of corndogs and beans, a steady barrage that would continue in five-minute waves until, some 300 lunches later, each class had eaten.

At the end of the serving counter they paused and peered into the milk cooler, pondering whether to grab chocolate or regular, while those lucky enough to have spare change in their pocket might make a dive into the most coveted bin — a freezer full of ice-cream.

Here’s what the kids don’t know. The chocolate milk is fat free, the ice-cream is low fat, and as for the corn dog? Try turkey dogs wrapped in whole-grain dough.

“We try to sneak it in there,” said Allison Francis, the nutrition director for Haywood County Schools.

There’s actually a term for that in school nutrition circles: “stealth health.”

SEE ALSO: Strained finances pose a hurdle to healthier school lunches

Despite the age-old stereotype, school lunches are the most mulled-over, fought-over, thought-out meal kids are likely to eat all day.

“School food historically gets a bad rap,” said Sherry Held, the school nutrition director in Macon County. “But where can you get a meal as nutritious as ours?”

Held and her counterparts are quick to rally to their own defense.

“People say school meals are not healthy, but let me tell you something, they are,” said Diane Shuler, the school nutritionist in Swain County.

But it isn’t easy.

“It gets kind of complicated,” Shuler said. “People think all I do is feed kids.”

Meeting a litany of federal standards yet fixing something kids like — particularly within the dour budget at their disposal — is a challenge to say the least.

“We probably all need counseling, but it is rewarding,” Held agreed. “If the students are eating good food, it is going to help fuel their minds and bodies.”

School lunches are undoubtedly a big business. While school lunch planners at the local level agonize over their weekly menus, trying to shoehorn all the food groups into a meal kids will eat, giant food manufacturers are employing teams of lobbyists to work the halls of Washington, ensuring pesky details like the health of children don’t stand in the way of bringing their products to market.

Despite the powerful interests behind fried tater-tots and crinkle fries, the federal government is moving slowly but surely toward healthier school lunch trays.

National media made great hay out of the fight over school lunch standards last month — a now notorious debate over whether pizza constitutes a vegetable.

New federal standards for school lunches will be unveiled in January, something that has school nutrition directors waiting somewhat nervously.

“We are about to see a sweeping overhaul in the child nutrition program,” said Lynn Harvey, the state director of child nutrition. “We know it will include more fruits, vegetables and whole grains.”

It will undoubtedly cost more. The federal government will ante up an additional six cents per lunch to help defray the costs, but Harvey has heard estimates that the cost of providing a single lunch will increase by 56 cents.

Money problems limit solutions

Several years ago, North Carolina took matters into its own hands. No more waiting on the federal government to make school lunches healthier. The state would come up with its own guidelines.

Unfortunately, many of the lofty goals — like requiring whole grains and banning fryers — were ultimately side-lined because they cost too much. Instead of standards, they were downgraded to mere “recommendations.”

“The problem is those standards were never funded by the North Carolina General Assembly,” said Harvey.

The standards were tested in 134 elementary schools across the state, but when it came time to make them policy, without funding to help schools make the transition, they were deemed impossible and unfair.

Healthy foods not only cost more and require more staff time to prepare, but school districts would have to replace equipment such as fryers with ovens — something that would cost a single county hundreds of thousands in new kitchen equipment.

At the time, Francis worked in one the few school districts to pilot the standards contemplated by the state. One in particular sticks out in Francis’ mind: the idea of meeting the USDA food group quotas for each and every lunch. Previously, schools counted servings of fruits, vegetables, protein and so on during an entire week and took the average — rather than applying the exact food group standards to each meal.

“It was next to impossible. All of us were in tears trying to plan menus and make it work,” Francis said. That idea was soon dropped.

Unfortunately, so were the other standards.

But, local school districts have voluntarily implemented the recommendations from the state anyway — roughly 80 percent in all. Fruit plays a starring role in desserts, from apple crisp to sliced pears. Tacos are made with ground turkey. Fried foods have been phased out almost entirely.

All the milk is either skim or 1 percent. Salad dressings are low-fat.

In Macon County this year, all chicken products are now whole-muscle chicken, rather than processed parts.

It’s something Shuler would like to do in Swain County as well, but the cost is prohibitive. Whole-muscle chicken products are simply too costly, she said.

One of the biggest pushes has come in whole grains. Bread and buns are whole grain, even the pizza crust. It means brown rice instead of white. Whole-wheat pasta is being slipped into dishes. But, it’s a balancing act.

“If it doesn’t taste good, even if you follow all these guidelines, they aren’t going to eat it,” Held said.

It’s the challenge all school lunch directors face.

“You can make something as healthy as you possibly can, but if it is not something they like, it is going to end up in the trash can,” Francis said.

Francis understands picky kids. For years, she stuffed a peanut butter and jelly sandwich in her purse before going to out eat with her kids. There was no way she was going to order and pay for something on the menu her kids wouldn’t eat anyway.

Meanwhile, food companies have seen the writing on the wall. From Sara Lee to Kellogg’s, they offer special wholesale lines for school cafeterias that have lower fat, sugar and salt contents than the grocery store varieties.

Sure you might see pizza on the school menu but looks can be deceiving.

“Our pizza has whole-wheat crust and reduced fat-cheese and turkey pepperoni,” Francis said.

These facts are strikingly absent from the printed lunch menu, however.

“We don’t really want to tell children they are eating whole-grain pizza. We just tell them, ‘You get pizza today!’” Held said.

‘Baby steps’

Held has learned the importance of baby steps in the five years that she has been with Macon County Schools.

“We try to ease them in to making better choices, like whole-wheat spaghetti and slowly eliminating the not so healthy choices,” Held said.

They are also learning what simply doesn’t take. Kids are savvy. They check the school lunch menus, and if they don’t like what’s on it, they bring their lunch that day. The cafeterias can ill-afford to fix food that no one will buy.

Students have summarily rejected whole-wheat mac-and-cheese for example, Held said. In Swain, they learned that lesson the hard way.

The first time Swain County put whole-wheat mac-and-cheese on the serving line this year, kids eagerly loaded it onto their trays but were less than enamored with it once they sat down and started eating. Hoping once more, they went got it again the next time it made a lunch line appearance.

But the third time it turned up on the menu, they wouldn’t touch it. The school cafeteria had to crank out 130 peanut butter and jelly sandwiches — the staple substitute when standard menu items are rejected — as kids came through the line.

The problem, however, is that Swain County ordered copious volumes of whole-wheat pasta at the beginning of the year that still has to be used up.

“Live and learn, live and learn,” Shuler said.

Ultimately, the hope is that the good eating habits introduced at school will bleed over into their home life.

“If you daughter came home and said, ‘Mommy I tried sweet potato wedges at school today and they were really yummy,’ you might say, ‘Really?’” Held said. “We do the best we can with the time we have with them.”

Free breakfast!

Any K-12 student eligible for free or reduced lunch can now get breakfast at no cost — yes, that’s totally free — thanks to a new state initiative that recognizes kids don’t learn as well when they’re hungry.

School lunch by the numbers

• $2.79: federal reimbursement for students on free lunch

• $2: school lunch for elementary student paying out of pocket

• $3.75: average cost of preparing a lunch in Haywood County

• 16 cents: cost to school for 4 ounces of juice

• 30 cents: cost to school for an apple

• $15,000-$20,000: cost of an oven to replace a deep fryer

• 35 percent: portion of school lunch budget spent on food

• 65 percent: portion of school lunch budget spent on salaries and overhead

When bulldozers began demolishing trees on a hillside overlooking Waynesville’s main commercial thoroughfare this summer, Byron Hickox was bombarded by a flood of inquiries from suddenly civic-minded citizens.

The highly visible slope along Russ Avenue was denuded in a matter of weeks, followed by a steady parade of dump trucks carting off soil.

“I was getting five calls a day,” said Hickox, who works in the Waynesville town planning office.

Some wanted to know what in tarnation was happening to the mountainside along the town’s most well-traveled corridor. The clear-cut is even visible from the Laurel Ridge Golf Course two miles away, pointed out Chuck Worrell, a local business owner and golfer.

“It is going to be such an eyesore,” Worrell said.

Others were simply curious what was afoot.

“People wanted to know what was going in there, and the answer was nothing,” Hickox said.

Not a Taco Bell, not a Chick-fil-A, and definitely not a Cracker Barrel. The dozers weren’t clearing the way for anything in particular. It turns out the goal of the earth-moving venture was the earth-moving itself. The soil was mined to feed a federal clean-up of contamination at a former apple orchard in Haywood County. Arsenic-laced pesticides had polluted the soil there over the decades, but it was discovered only after the land was turned into a housing development.

The Barbers Orchard site landed on the Environmental Protection Agency’s Superfund list, triggering a $15 million federal clean-up, according to the EPA.

The massive operation called for digging up the top foot of soil from 88 acres, trucking it off and hauling in clean dirt to replace it with — more than 100,000 cubic yards of dirt in all.

Caroline-A-Contracting, run by Burton and Caroline Edwards of Maggie Valley, landed a $3 million contract to provide all that dirt and began looking for places to get it from. The 3.5-acre site on Russ Avenue across from Kmart — a stone’s throw from the highway and a straight-shot to Barbers Orchard — was a prime candidate.

“We purchased it mainly for the dirt,” Caroline Edwards said of the site on Russ Avenue. “We really don’t have any plans.”

The hope, of course, is that the previously forested and steep hillside is now more attractive to a potential developer looking for a visible lot on the town’s prime commercial corridor.

The site is still steep, but it has the making of a switchback driveway leading to a modest flat spot carved into the hillside about half-way up — hopefully making it marketable. So far, there are no takers, but grading only recently wrapped up.

“We are open to whatever,” Caroline Edwards said.

Selling dirt for the Superfund clean-up subsidized the cost of buying, clearing and grading the site, but fell short of bankrolling it entirely.

“By no means did we sell enough dirt to pay for it,” Caroline Edwards said of the property.

According to county property records, the site was purchased for $225,000.

The Russ Avenue property wasn’t the only one — not even the main one — used as a source for clean soil. A much larger digging operation in Maggie Valley supplied most of the clean soil, on a site owned by Burton Edward’s father, Kyle Edwards.

That site was a major nuisance to Chuck Worrell, the owner of High Country Furniture on Dellwood Road, which is located near the soil mining operation. The equipment was noisy, mud ran down the road, trucks tore up the road, and dust blew everywhere, Worrell said.

“I can’t even open the windows because the dust comes through there,” Worrell said.

Both sites were under the erosion control jurisdiction of the N.C. Department of Environment and Natural Resources. Wayne Watkins, a state erosion control officer based in Asheville, was assigned to monitor the work. He ended up with his fair share of calls from the public as well.

“Anytime people start cutting trees, the general public has a varying degree of sensitivity to that. Some see it as foul play and others don’t understand it is a work in progress,” Watkins said.

On a few occasions, Watkins had to ask the Edwards to fix erosion control measures, but they “responded appropriately,” Watkins said. Watkins required them to put in additional silt fences and beef up their groundcover of the bare soil in places. The Maggie Valley dirt-mining site even experienced at small slide that had to be stabilized, Watkins said.

The Cashiers Travel and Tourism Authority briefed Jackson County commissioners on some of their marketing campaigns from the year, responding to calls that the agency was too insular.

Mark Jones, a member of the Cashiers tourism board who is also a Jackson County commissioner, gave a presentation on the agency’s advertising for the year, including samples of ads that have been placed in various magazines and travel articles written about Cashiers.

Jones said the Cashiers tourism board plans to get new software that will allow it to share  the names and contact information for prospective tourists with lodging owners and other tourism businesses. When prospective tourists call, email or respond to magazine ads requesting information on visiting Cashiers, the Cashiers tourism agency sends them brochures. A new system will allow the database of names to be made available to those in the tourism industry who may want to follow up with brochures and literature of their own, Jones said.

Jones said the Cashiers tourism agency is more than happy to provide a regular report to the county.

“We truly want transparency,” Jones said.

Sue Bumgarner, the director of the Cashiers Travel and Tourism Association, had not responded to earlier requests by the county to provide a progress report on its tourist promotions. Tourism in Jackson County has taken a hit in the recession, spurring interest at the county level on how to improve marketing.

All the invoices for the Cashiers tourism agency go through the county finance office, and Bumgarner has said she thought those invoices served as adequate reporting to the county on the agency’s activities.

It’s not too late for Jackson County leaders to go back to the drawing board on a state bill that consolidates the county’s two separate tourism agencies.

Commissioners have found themselves in the hot seat over a bill that would do away with the Cashiers Travel and Tourism Association and instead merge it with a single countywide entity. Cashiers tourism leaders have decried the plan. They argue that Cashiers needs its own tourism agency — with its own funding stream — to cater to its own unique visitor demographic apart from the county as a whole.

Those who support a merger believe it would be more effective, eliminating the duplication that currently exists and putting the money to wiser use.

The idea to merge the Cashiers tourism agency with the greater Jackson County Travel and Tourism Association was embedded in a bill to raise the room tax on overnight lodging from 3 to 6 percent. Raising the room tax was the chief objective of the bill and was supported by the majority of commissioners. But the origin of other parts of the bill is murky and has been blamed in part on a legislative mix up.

N.C. Rep. Phil Haire, D-Sylva, appeared before the Jackson County commissioners this week to let them know the bill can be changed if they don’t like it. Haire even took the prerogative to bring a new, marked-up version of the bill that would undo the changes made by the previous bill passed this summer.

That seemed to irk at least one commissioner, who asked Haire why he would bother drafting changes to the bill before commissioners officially decided whether they wanted any changes. Commissioner Doug Cody was confused how the bill had been preemptively rewritten.

“Who is the author of this?” Cody asked Haire of the new version.

Haire said he took the initiative to revise the bill based on feedback he’d gotten. Feedback from whom, Cody wondered.

“I didn’t realize we were doing an opinion survey of what changes we want to see,” Cody said.

“If you don’t like it, we will throw it in the waste paper basket,” Haire said of the new version.

It became clear that in Cody’s eye, Haire had jumped the gun with new language before the majority of commissioners reached a consensus on what to do.

“I think this needs some work,” Cody said.

County Manager Chuck Wooten portrayed it as a miscommunication. Wooten said he passed along the concerns raised at the last commissioners meeting over some aspects of the bill. Haire perhaps thought the concerns were universally shared by the commissioners when in fact the only commissioner vocalizing any concerns has been Commissioner Mark Jones, who works in the Cashiers tourism industry and sits on the Cashiers tourism board.

“I believe Mr. Jones is the only one that spoke up as having these concerns,” said Wooten.

Commissioner Charles Elders said commissioners need to decide collectively how, if at all, the bill that passed should be changed.

“We need to get our thoughts and recommendations together of what we would like to see,” Elders said.

Haire said he intended the new language to simply be a “starting point.”

While commissioners said Haire was premature in penning a new bill, Haire’s point was clear. The bill can be changed — and that lands the ball and all its political repercussions squarely back in the commissioners’ court.

Until now, the county had blamed at least part of the controversy on an unintentional hiccup in the legislative process: the bill that ultimately passed in Raleigh was not what the county initially asked for.

Haire didn’t intentionally set out to introduce and get passed a different bill than what county leaders wanted. The county failed to make its request in time last spring. By the time they asked Haire for a bill to increase the room tax from 3 to 6 percent, the deadline for introducing new bills had passed. So Haire looked around for a similar bill to piggyback on. He found one from Alleghany County, which was also looking to raise its room tax, and tagged Jackson County’s name onto it as well.

But in the process, the language didn’t come out quite right, Haire said.

Commissioners had partly disowned themselves from some of the controversial parts of the bill — instead directing blame at a bureaucratic system of lawmaking.

But, Haire now says it is no problem to change it — putting commissioners on the spot to either stand behind the bill in its current form or tell Haire how they want it changed.

“I hope we can get it the way we eventually want it,” Haire told commissioners helpfully.

Haire did explain that the state’s travel and tourism branch wants to bring uniformity to the myriad of tourism bills for each county in the state, and there is pressure to use similar policies and language, he said.

Commissioners plan to take the issue up in January.

Concerns with the Jackson County room tax bill

Jackson County commissioners plan to increase the tax on overnight lodging from 3 to 6 percent. Doing so requires permission of the N.C. General Assembly. A special bill to increase the tax was passed in Raleigh earlier this year at the county’s request. The language in the bill calls for other changes to the county’s two tourism agencies as well, including:

• Create a single countywide tourism development authority. Currently, there are two — a Jackson County Travel and Tourism Association and a separate Cashiers Travel and Tourism Association. The Cashiers tourism arm currently gets 75 percent of the room tax generated in the Cashiers area to spend on its own marketing.

• Expand how the tourism tax revenue could be spent. Currently, the money generated from the room tax must go solely to tourism marketing and promotions. The new bill would allow money to be spent on “tourism-related activities,” including capital projects. Putting on festivals, building greenways or assisting the Great Smoky Mountains Railroad with the cost of an engine turntable could all be legal uses of the tourism revenue under the new bill.

More than two dozen popular festivals in Haywood County are at risk of losing funding from the county’s tourism agency, hampering the ability of organizers to advertise and promote their events.

Grant funding for festivals, typically ranging from $2,000 to $5,000 a year, would be cut off after four years under new guidelines being considered by the Haywood County Tourism Development Authority. The money would instead be funneled to new, up-and-coming festivals and initiatives.

“We felt like there were enough new events coming in that needed help getting started,” said Marion Hamel, a member of the tourism authority board.

Long-running festivals that have come to rely on the funding year after year are monopolizing tourism dollars at the expense of start-up events desperate for seed money to get off the ground, Hamel said.

But if the money dries up to promote signature festivals — perennial favorites like Folkmoot USA, the Church Street Arts and Crafts Festival and the Apple Festival — they may no longer attract the giant crowds of the past, organizers say.

Meanwhile, the new festivals may be a flop and fail to pick up the slack.

“People come up with an idea for a new event every day, but it doesn’t mean they can make it happen,” said Buffy Phillips with the Downtown Waynesville Association. “Is it going to a be a quality event that is going to put heads in beds?”

CeCe Hipps, director of the Haywood County Chamber of Commerce, said the chances are “slim” of an individual pulling off a large-scale festival successfully without the backing of an established organization.

“You have to know what you are doing and have the infrastructure to do it,” Hipps said.

But if new events never get a chance, how do you know which ones hold great promise, Hamel said.

“You can’t say, ‘Gee, that won’t do anything for us,’” Hamel said.

Continually funding the same events year after year isn’t growing the county’s tourism base, according to Lynn Collins, executive director of the Haywood tourism authority.

“If we don’t have new events then we are not bringing new people in necessarily,” Collins said.

She pointed to the plethora of festivals held the second and third weekends of October as a prime example — and the empty squares on the calendar come the fourth weekend.

“How helpful would it be to extend the season by having something going on that last weekend?” Collins said. “If we can provide seed money to make that happen, then it is a win-win for everybody.”

Collins hopes organizations such as the Haywood Chamber and Downtown Waynesville Association respond by coming up with new festivals.

But organizers say that’s the last thing they’ll do — losing funding for their signature events won’t inspire them to take on the risk of new ventures during uncertain economic times.

“We are maxed out with events as it is now,” said Hipps. “Taking money away from us for one event is not going to be any incentive for us to go out and create another event. It is just not going to happen.”

Phillips agreed.

“We have a reputation of doing very successful, very well done, very organized events,” Phillips said of the Downtown Waynesville Association. “There is not enough staff time to create new events to apply for the funding.”

Unintended consequences

The strategy to fund new festivals could end up being a wash for tourism if existing festivals fold because of lack of financial support, said Tim Barth, the town manager of Maggie Valley.

“What if it jeopardizes existing events? If existing events go away because it doesn’t get funded, it is harder to start a new event than to keep an existing event,” Barth said.

Maggie Valley knows all too well what can happen when even the most esteemed of events fails to get the attention it needs. The Maggie Valley Moonlight Race, which historically attracted over 1,000 runners, was canceled in its 29th year after dwindling numbers made it financially unfeasible. TDA funding actually helped revive it last year.

While festival organizers are looking out for their own events, however, the tourism authority must weigh what’s best for overall tourism.

“They have to look at ways of trying to spread the tax dollars around to do the most good,” said Tom Knapko, owner of Creekwood Cabins in Maggie Valley. “If you have a successful event, you should be able to do it on your own.”

Knapko said he doesn’t have a problem with a four-year cap on funding.

“If you are going to have a successful event, you are going to have to get your act together,” Knapko said.

Staging a festival is costly, however, and even the most popular events struggle to cover those costs. Canton’s Labor Day Festival is the county’s longest running event — clocking in at 101 years and counting. But it is hardly self-supporting.

The town ponies up $20,000 each year — for bands and musicians, porta-potties, stages, tents, clean-up crews and law enforcement.

“It is absolutely a dead loss,” said Al Matthews, Canton’s town manager.

The Labor Day Festival has gotten an average of $4,000 a year in TDA funding recently, and that’s allowed the town to bill the event to a regional rather than local audience. Without the funding, “We would be hampered in some of our advertising,” Matthews said.

Likewise, Phillips said she would have to scale back advertising for the Church Street Arts and Crafts festival, a stalwart event of the Downtown Waynesville Association that draws thousands of people every year. It relies on advertising money from the TDA to rake in those crowds, Phillips said.

“I get results,” Phillips said. “Where other communities’ festivals are dying, it isn’t the case in Waynesville because we have money to promote it.”

Phillips said she would no longer be able to advertise the Church Street festival in national publications and would instead have to focus on the immediate region.

Folkmoot USA, the international dance festival headquartered in Haywood County, would be in the same predicament.

“We would not advertise as much outside the region if we didn’t get that funding. It is more expensive to put an ad in something like ‘Southern Living,’” said Karen Babcock, the executive director of Folkmoot. We would fall back on local publications to target “the people who are already your fans and customer base.”

The Lake Logan Triathlon, a weekend of competitive outdoor adventure races held every August, is also at risk of losing its funding, which has come in at $3,000 the past four years.

The event attracted 700 racers last year, plus their families and friends who come for the weekend. The race organizer, Greg Duff of Glory Hound Events, estimates it has a $200,000 economic impact.

“I think those are the things that should be evaluated when determining whether it has a return on the investment, and for the Lake Logan Triathlon, the answer is definitely ‘yes,’” Duff said.

However, name recognition of established events should counter the need for as much advertising, according to Marion Hamel, a member of the Haywood tourism authority.

“We really felt as though those events that have been going on a long time, people are aware of them and they probably don’t need as much advertising,” Hamel said. “We really feel like the events that have done well and do put heads in beds have had the opportunity to build up more sponsorships to help with funding of advertising.”

Making the cut

Several festivals managed to win a spot in the funding line-up for the first time this year: Art After Dark gallery stroll in downtown Waynesville, the Smoky Mountain Folk Festival, a Fourth of July festival in Maggie Valley, three different car and truck shows in Maggie, Lake Junaluska’s Easter Celebration and the Haywood County Fair.

While only two of these are actually “new” events, they are all new to the funding pool this year, showing it is possible to make room for at least some new events without completely cutting out the old ones.

But many other events applying for the first time weren’t so lucky, including craft shows in Maggie Valley, events at the historic Shelton House Museum and a bluegrass concert at Francis Farm Mill.

“There just wasn’t enough money to go around,” Collins said. “Perhaps this would allow them to fund some of those things there isn’t enough funding for.”

Meanwhile, events hitting their four-year cap include the Church Street festival, Friday Night street dances in downtown Waynesville, The Whole Bloomin’ Thing spring festival and the International Festival Day held during Folkmoot in late July.

Also at risk is funding for a festival director in Maggie Valley. The festival director is tasked with coordinating and recruiting new events to the town-owned festival grounds. The town pays half the salary and a tourism grant foots the other half.

The salary subsidy would be phased out under the four-year cap, however. Ironically, the festival director’s job is to recruit new festivals to town.

“We wouldn’t have somebody who is actively looking for new events,” Barth said. “I think it would make bringing new events to the area more difficult because we wouldn’t have a point person making that happen.”

The proposal will be discussed and likely voted on at the tourism board meeting at 2 p.m. Wednesday, Nov. 30, at the Bethea Welcome Center at Lake Junaluska. Collins said she doesn’t know whether it will pass.

More than half the tourism board members appear to support it already, however. The proposal has been discussed by both the finance and advertising committees and appears to have their approval.

However, none of the key players in the county’s tourism industry seemed to be aware that such a change was in the works. They only learned of the proposed change Monday after fielding calls on the issue from The Smoky Mountain News, which had noticed the issue on the agenda for the upcoming tourism meeting.

The tourism board plans to vote this week, since it’s their last meeting before the application period for next year’s grant funding opens in January.

A primer on the Haywood tourism funding stream

The Haywood County Tourism Development Authority brings in more than $800,000 a year through a 4 percent tax on overnight stays in hotels, motels, cabin rentals and B&Bs.

A quarter of that — about $215,000 this year — is earmarked for special tourism initiatives.

Five areas of the county — namely Waynesville, Maggie Valley, Canton, Lake Junaluska and Clyde — get their own piece of the pie based on how much of the room tax was collected in that area. While the exact amount will obviously fluctuate depending on how tourism shakes out this fiscal year, a rough estimate of what each area gets is:

• Maggie Valley: $121,000

• Waynesville: $69,292

• Canton: $15,500

• Lake Junaluska: $9,282

• Clyde: $648

Each area has its own committee to divvy up its share. The committee sorts through all the applications for funding and decides how much to award for the various festivals and projects.

The tourism authority has final say over the funding, however. In all but a couple of instances, the tourism authority has simply rubber-stamped the committee’s decision. After all, that was the whole point of setting aside a share of tourism tax dollars – for individual communities to spend as they saw fit.

“The TDA tries diligently to abide by that,” said Lynn Collins, director of the Haywood TDA.

The proposal to limit how long a festival is eligible for grant money is nothing new. It has been debated for more than decade. The tourism board has periodically discussed whether long-running events should be weaned from grant money and learn to stand alone.

Up for discussion

After years of lobbying and months of hard negotiating, the Eastern Band of Cherokee Indians sealed a deal with Gov. Beverly Perdue this week to bring table games, real cards and live dealers to Harrah’s Cherokee Casino and Resort.

“It has been along hard process,” said Cherokee Chief Michell Hicks. “With any negotiation you are going to have doubts but at the end of the day we kept pushing.”

Hicks has spent his eight years in office working toward a deal.

The addition of table games will mean hundreds of new jobs, thousands of new tourists and millions dollars more flowing through Western North Carolina.

“Lots of people claim their huge economic impact and you can kind of see it if you squint and tilt your head the right way — but with these guys you can probably see it from outer space,” said Stephen Appold, senior research associate with the UNC-Chapel Hill business school, who authored a report on the casino’s driving economic force in the region.

The tribe is still one step away from final success, however.

The tribe needs the General Assembly to ink the deal. The General Assembly is out on winter break, aside from a brief return to Raleigh this week to take up pressing issues that couldn’t wait. The deal with Cherokee was supposed to be one of those issues, but Perdue is at odds with the Republican leadership in the General Assembly over the state’s cut of revenue off the new table games.

Perdue wants the money to be placed in a trust fund and funneled directly to public education in K-12 classrooms across the state based on student population. GOP party leadership, however, wants the money to go directly into the state’s general fund with no special strings attached.

Republicans balked this week at quick-signing the compact, saying they need more time for review. Sen. Jim Davis, R-Macon County, said the GOP-dominated General Assembly simply didn’t have adequate time to read and review such a lengthy document.

“I regret we weren’t able to vote on it this session,” Davis said. “But for the Governor to drop this in our laps without giving us a chance to read it seems shortsighted.”

Hicks said the tribe isn’t worried that the deal will fall apart, but merely sees it as a delay.

“It is frustrating but I am pleased we have progressed to the extent we have and I am confident in the very near future it will be approved,” Hicks said. “We’ve taken a giant step forward.”

Hicks, the vice chief, half a dozen tribal council members and a delegation of advisors from within the tribe and hired lobbyists spent the first part of the week in Raleigh getting the gaming compact signed by the Governor and pushing the General Assembly to take it up.

While the General Assembly doesn’t officially reconvene until May, Hicks hopes legislators will return to Raleigh soon to decide on the bill.

“We truly hope we don’t have to wait for May,” Hicks said.

The region desperately needs the jobs and the state desperately needs the revenue. Calling a special session of the General Assembly during the off-season to take up economic development isn’t unheard of. The state did it to approve incentives for Dell Computer several years ago.

“We are like any other company or organization. We feel if we are creating jobs, we should have our Governor and legislature get behind us,” Hicks said.

In the meantime, there is plenty of work to be done to prepare for table games, and the tribe and Harrah’s aren’t wasting any time.

“As of yesterday the planning process was rolling,” Hicks said Tuesday.

Table games must be bought, space made for them on the casino floor, and an army of dealers must be hired. The hiring and specialized training of the casino dealers will be the lengthiest part of the process.

Hicks said the timeline for the roll out of live table games will be laid out within the week.

A delicate dance

Ultimately, Cherokee is giving up a share of its revenue on the new table games to secure the state’s approval. How much revenue has been a chief issue in the negotiations. The tribe also wanted a guarantee from the state that no other casinos will be allowed to encroach on its territory.

The two issues were linked at the bargaining table. Cherokee offered up a bigger piece of the pie if the state would promise to keep other casinos out of the rest of the state.

The state would only agree to a relatively small exclusive territory, however, and settled for a smaller share of revenue as a result.

Cherokee will give the state 4 percent of gross revenue off new table games for the first five years, 5 percent for the next five, 6 percent for the next five, 7 percent for the next five and 8 percent for the final 10 years of the 30-year gaming compact.

This helps Cherokee in the early years after rolling out table games, when the tribe is still paying-off its start-up costs for the games and realizing their potential.

As for exclusive territory, Cherokee got less of what it wanted. The state would only grant exclusive gaming territory west of I-26 in Asheville.

Written correspondence between the tribe and the Governor’s office over the past four months paints a picture of their respective positions, and the compromises they arrived at as negotiations played out. Neither side would talk about their positions during the deal making, but letters between the two provide a surprisingly candid storyline of where the parties stood.

Only in retrospect are the tactics and bargaining positions of the tribe truly apparent.

“We knew where the stopping point was. Again in any negotiation you have to have a starting point and a stopping point. We knew how far we could push and how far we could be pushed,” Hicks said.

Those decisions were made in concert with the vice chief and tribal council, Hicks said. Cherokee drew on its history of more than 300 years of experience negotiating deals with other governments, “not all in our favor,” Hicks pointed out.

But in this case, the gaming compact is fair to both parties, with neither trying to take advantage of the other, Hicks said. Hicks said the tribe is pleased with its deal.

The tribe has reaped about $226 million a year off the casino recently. Half funds tribal government — from education to housing to health care — while half goes to tribe members in the form of per capita payments.

That amount is sure to increase with the addition of live table games.

Until now, the casino has been limited to digital video gambling machines. Despite the handicap, the Eastern Band of Cherokee has catapulted to the forefront of WNC’s economy.

The approval of live table games comes just in time. The tribe is nearly finished with a $633-million expansion of the casino that remade the property into a destination resort.

When the tribe embarked on the expansion six years ago, it hoped that live table games would be in its cards one day — rather than the video gambling machines it had been limited to.

The expansion has already proved its worth, even without live table games rounding out the picture. Revenue peaked at Harrah’s Cherokee in 2007 before the recession began to take its toll. Profits have been on the rise since 2010.

Casino General Manager Darold Londo predicts Harrah’s Cherokee will return to its pre-recession levels by the end of next year — even without the addition of table games.

“That’s quicker than the industry,” Londo said, crediting the Cherokee expansion project. “The industry doesn’t expect to recover sometime until 2014 or beyond, whereas we expect to hit that sometime in 2012. We’ve had the ability to control a little bit more of our own destiny.”

When Brooks Robinson left his manager’s job at Domino’s Pizza to be a dealer in the fledgling casino market of Tunica, Miss., he wasted little time finding that first rung in his climb up the corporate ladder.

“I had never been in a casino,” Robinson admits. But he knew an opportunity when he saw one.

“The gaming world was coming to Mississippi, and it was so interesting to me. There was a great opportunity in that market. I had high hopes of quickly moving up the ranks,” Robinson said.

Now 18 years later, Robinson has gone from frontline card dealer to the general manager of the $500 million a year operation of Harrah’s Cherokee Casino and Resort.

Robinson takes over the top position at Harrah’s Cherokee this week from Darold Londo, who has steered the casino through a major $633-million expansion over the past six years.

It’s Robinson’s job to follow through on the expansion, not only overseeing the final phases of construction over the next year but managing the opening of myriad new restaurants and retail shops within the resort.

His biggest challenge is far less tangible, however.

“People say if you build it they will come, but in the state of the world we are in today that is not always the case,” Robinson said. “We have to go out and do a strong job of promoting this new resort and sharing with the rest of the world what we have to offer.”

Indeed, that’s the ultimate jackpot behind the expansion. It has set the stage for Cherokee’s casino to capture not only a new demographic of gamer, but any tourist looking for a destination resort in the mountains. More than 1,000 first-class hotel rooms, an array of restaurants, nightlife, big-name entertainment, shopping, and even a spa will remake Harrah’s Cherokee Casino into a bona fide resort unrivaled by any other in North Carolina.

“We can appeal to a whole segment of the market we haven’t been able to previously,” Londo said. “Brooks is taking charge of an organization that is bigger, more dynamic, more complex. It has more potential than what we had six years ago.”

Potential, however, is the key word.

“You can build the box and create the structure, but the marketing piece and the delivery of service, the promise to our guests of a different experience and feel of this property is something we have to really focus on,” Robinson said.

For Harrah’s Cherokee to come into its own as a true resort, Robinson has to inspire a new culture among its 2,000-plus employees. Working at a resort takes a different mentality.

“It is more than excellent customer service. It is creating and environment that is totally resort like,” Londo said.

Every employee has to be part-salesman. Room service waiters should be able to tell guests what concerts are coming up, valet attendants should be familiar with the restaurants menus, and so on.

It’s true now more than ever, after news this week that the casino will at last be able to offer live table games — something Robinson didn’t know for sure when doing the interview for this article.

When the tribe embarked on the casino expansion six years ago, it hoped that live table games would be in its cards one day, rather than the video gambling machines it had been limited to. Live table games with real dealers was contingent on approval from the state, however.

After years of lobbying and months of hard negotiating, Gov. Beverly Perdue signed a deal with the tribe this week to make that dream a reality (see related article).

It makes Robinson’s job all the more daunting — and exciting — to overhaul the casino floor and bring the new table games online.

Robinson has put down roots in Haywood County, where he lives on five acres in Bethel with his wife and two teenagers. He is the only casino general manager at Harrah’s that raises goats and chickens and harvests vegetables from a backyard garden — although his wife takes most of the credit for their family experiment in farming.

When Robinson made the move to Harrah’s last summer, he knew the general manager post might be in the cards one day.

“It was like that rookie quarterback in the NFL that is behind a superstar waiting in the wings to take over,” Robinson said.

The Cherokee casino is a standout among the 40 properties under the Harrah’s corporate brand, Robinson said.

“The reputation of this team is something that is known across our company,” Robinson said. “It was clear when I got here they had truly adapted and wanted to be the best they could possibly be.”

Robinson came to Cherokee from Harrah’s Louisiana Downs casino where he served as vice president of operations.

The roll of assistant general manager will be filled by Lumpy Lambert, an enrolled tribal member and current vice president of casino operations.

“The long-term experience and proven track record Lambert brings will help us complete our transition to a resort destination,” said Robinson.

Lambert joined the casino in 1997, its very first year in business, as a casino operations supervisor. In 2002, he became vice president of operations. Lambert was a critical member of the team who defined the property's master plan expansion project.

As for Londo, he has taken on a new role at the corporate level of Harrah’s over new and expanding markets. It will be Londo’s job to size up locations for new casinos and envision what type of casino would work.

The expansion in Cherokee proved Londo has a knack for turning dreams into reality.

“Obviously I didn’t join Harrah’s thinking I was going to be a development guy,” Londo said. “But I love it, it is fun.”

The Eastern Band of Cherokee Indians has agreed to give up 8.5 percent of the gross revenue from new table games if the state will open the doors for live dealers at Harrah’s Cherokee Casino and Resort.

In addition to the live dealers, the tribe wants a guarantee from the state that no other casinos will be allowed to encroach on its territory. The state has agreed in principle — but exactly where to draw the line around Cherokee’s exclusive gaming territory remains a major sticking point.

The tribe and the state have made major strides in working out a deal, however. What was once a wide chasm in their negotiating positions has closed to a mere gap over the past 11 months of talks and correspondence.

“I believe we are on the verge of success,” Cherokee Principal Chief Michell Hicks wrote to the governor’s office earlier this month. “Let us resolve these few remaining concerns in short order. Hundreds of new jobs and much needed revenue for the state depend on it.”

Hicks urged the governor’s office to agree on a deal by this week, in time for the General Assembly to take up the issue. State lawmakers are usually on a prolonged recess this time of year, but returned to Raleigh this week to take up a handful of pressing issues that couldn’t wait until the new year.

An agreement with the tribe is tentatively on the General Assembly’s agenda, should the governor and tribe manage to work out their differences.

Where to draw the line

Initially, the tribe agreed to give up 8.5 percent of gross revenue from new table games if the state promised no other casinos would be allowed anywhere in North Carolina.

The state countered that was too big a territory. Cherokee conceded, agreeing it would settle for being the only casino west of I-95. That would satisfy the state’s Lumbee contingency, which hopes to one day get federal recognition as an Indian tribe and potentially open a casino in the eastern part of the state.

But the state again said Cherokee was asking for too much exclusive territory. In the latest counter offer from the tribe, the tribe said it would settle for being the only casino in the western half of the state — determined by the state’s geographic mid-point. But if the tribe had to acquiesce in its quest for exclusive gaming territory, it was no longer willing to give the state an 8.5 percent cut of profits, and instead offered 4.5 percent.

“The portion of our revenue to be shared with the state will depend upon the area of exclusivity provided to the tribe,” Hicks wrote in a letter to the state this month.

The governor’s office replied that it wanted at least 7 percent of the tribe’s revenue, and wanted to limit the tribe’s exclusive casino territory to merely “west of Asheville.”

Gov. Beverly Perdue’s office has more than the tribe to contend with in the gaming negotiations. Perdue and Republican lawmakers are at odds over what the casino money should go toward.

Perdue wants it earmarked for education, namely pre-K education initiatives that saw budget cuts from Republican lawmakers this year. But Republican lawmakers want the Cherokee casino proceeds to simply go into the general budget with no restrictions on their use.

Cherokee has been lobbying the state for more than five years for permission to bring in live dealers with dice and cards and real table games rather than the electronic and video gaming the casino is currently limited to. But negotiations hit a brick wall under former Gov. Mike Easley but were reopened under Gov. Perdue.

The tribe and the governor have bandied offers and counter offers back and forth since January. In one of the most recent exchanges, the state went out of its way to compliment the tribe on the nature of the parley.

“At the outset, I want to express how much we appreciate the cooperative and collegial manner in which we have concluded these negotiations as we work together on these important issues,” Mark Davis, general counsel to the governor, wrote to the tribe’s Attorney General Annette Tarnawsky.

Who has the upper hand at this juncture isn’t clear. Getting live dealers at the casino is critical to the tribe’s financial wellbeing: The Eastern Band has a $633-million expansion to pay for at a time when the recession has taken a toll on casino business.

Meanwhile, the state has budget problems of its own that need solving, and the prospect of a lifeline from Cherokee is coming none to soon.

A houseboat on Fontana Lake was dismantled and hauled off this month after the owner repeatedly failed to dispose of waste properly.

For more than a year the houseboat owner dodged rules against straight piping sewage into the lake. The owner also skirted rules that limit how long a houseboat can sit in the same spot on the lake if it isn’t in a harbor.

The houseboat owner was sent warning letters from the Swain County Health Department, which polices sewage disposal by houseboats on the lake. After certified letters went unreturned, a notice was posted on the front door of the owner’s house, said Linda White, director of the Swain County Health Department.

After still no response, the county attorney sent him a final warning telling him to remove his houseboat or face fines and even criminal charges for violating the county’s houseboat waste disposal ordinance.

The houseboat owner finally took notice — but instead of complying he tootled down the lake to the Graham County side, out of Swain’s jurisdiction.

Graham County also has an ordinance that prevents houseboats from dumping their sewage into the lake, but after six months of getting nowhere, Swain authorities were happy to let someone else try. Graham didn’t have much luck either, however.

Meanwhile, the houseboat owner was loitering too long in one spot. Houseboats have to either be tied up in a harbor or on the move —  moving at least one nautical mile every two weeks. Tennessee Valley Authority flags boats that set up camp in one place on the open lake for too long. House boats outside a harbor aren’t supposed to be left unattended longer than 24 hours, either.

There are five private boat docks on the lake that will harbor houseboats in coves that branch off the main stem of the lake. Most of the 500 houseboats on the lake never budge from the boat dock where they lease harbor space. The owners use their houseboats as a home base on the water but use motorboats or pontoons to venture from the shoreline and play on the open lake.

The dock owners also handle houseboat sewage, using a fleet of pump boats to collect sewage from all the houseboats in their harbors and haul it to shore.

But this renegade houseboat owner simply idled around the lake.

“He refused to go to a harbor,” said David Monteith, head of the Fontana Lake Users Association and a Swain County commissioner. “He did not want to get into compliance and get into a harbor and sign a pumping contract.”

Ultimately, however, the lake itself dealt the houseboat a fatal blow. During a storm, it broke lose of its moorings and capsized.

“It was a navigation hazard,” said Darrell Cuthbertson with the Tennessee Valley Authority, which manages the lake. “Only two feet of one corner was sticking up from the water, and we were afraid someone was going to hit it so we drug it over to the bank.”

The closest shoreline happened to be National Park Service property. The Great Smoky Mountains National Park wasn’t exactly fond of a soggy, capsized houseboat on its lakeshore and asked the owner to claim his houseboat.

When he didn’t meet the deadline, Tennessee Valley Authority dismantled it and hauled off the scraps, Cuthbertson said.

Lake sewage rules

A local push to clean up Lake Fontana was set in motion about 10 years ago following a revelation that the bacteria level in the water was unsafe — five times above accepted fecal coliform counts.

All that sewage, not only from toilets but also “gray water” from showers and sinks, was polluting the lake.

Those who used the lake banded together under the Fontana Lake Users Association to address the issue. The group lobbied officials in Swain and Graham counties to pass ordinances regulating houseboat waste and secured more than $700,000 in grants to get a fleet of pump boats up and running.

Houseboats now collect their own sewage in tanks and have it pumped out and hauled ashore periodically by boat dock owners.

Houseboat owners must display a sticker on the outside of their boat showing they are in compliance with the law. To get a sticker, they have to provide a copy of their pumping contract with a boat dock owner.

Interestingly, houseboat owners go through the county property tax office to get their stickers since houseboat owners are supposed to pay property taxes on their boats anyway.

The sewage ordinance actually killed two birds with one stone: it cleaned up the lake and dramatically increased the number of houseboat owners paying taxes on their boats — much like your license plate renewal is tied to automobile inspection.

Monteith hopes this will be a lesson to any houseboat owner thinking of skirting the waste disposal laws on the lake.

“To me, it goes to show this is what could happen if you fail to get in compliance with this ordinance in Swain and Graham County. This is what could happen to anybody’s houseboat, it could be dismantled,” Monteith said.

A challenger for the mayor’s seat in Waynesville protested the election results this week, claiming residents of a new apartment complex were disenfranchised.

A mapping error caused temporary confusion on Election Day over whether residents of the apartment complex were eligible to vote in the town election.

Hugh Phillips, who lost his bid for mayor by 31 votes, filed a formal protest with the Haywood County Board of Elections calling for a special election that would give 81 registered voters living in The Laurels at Junaluska a second chance to cast ballots.

The protest was denied, however, after the election board ruled that there was no evidence any voter was turned away from the polls or prevented from casting ballots.

“I can’t find that we denied anybody the right to vote,” said Grover Bradshaw, a member of the Haywood Election Board.

Phillips plans to appeal to the N.C. Board of Elections.

Phillips was joined in the protest by a resident of the apartment complex, Ed Henderson, who ultimately voted in the election but not without some hang-up. Henderson went to the polls the morning of Election Day and popped his head in to ask whether his name was on the roster as being eligible to vote in the town election.

“I didn’t think I was in the city, but I wanted to make sure. They could not find me so I simply said ‘thank you’ and turned and left. I didn’t fuss or protest because I thought they very well might be correct,” Henderson said.

The Laurels at Junaluska is on the outskirts of town. The apartment complex for elderly and disabled residents was built in 2007. It’s located near the Junaluska Golf Course, off of Russ Avenue past K-Mart. This was the first town election since the complex opened.

Because of a mapping error, it didn’t show up in the election database as being inside the town limits.

Once back at his apartment complex, however, Henderson decided to double-check with the apartment manager to determine if they were in the town limits, he said.

“I have been a voter all my life. I have never missed an election,” Henderson said.

When he learned they in fact were in the town limits, he called the county election office, which put him on hold to figure out what had gone wrong.

Henderson said county election workers were “profusely apologetic.”

“They said if you will please go back down to the precinct we will make sure your vote is taken. They were very concerned that I have that opportunity,” Henderson said. “I certainly don’t perceive this as being a deliberate act. It was a clerical error.”

Meanwhile, a couple who lives in the apartment complex had also come to the polls to vote, but unlike Henderson who informally popped his head to see if his name was on the roster, they officially presented themselves to vote. Precinct workers couldn’t find their name on the list.

In practice, the couple should have gotten special paper ballots. Known as provisional ballots, they would have been set aside and dealt with after the polls closed.

Poll workers are given marching orders that no one leaves without voting, according to O.L. Yates, chairman of the Haywood election board.

“Everybody that comes in, if we can’t find them, we give them a provisional vote,” Yates said. Election workers later research whether the voter is indeed eligible, and if so, the “provisional ballots” are tallied into the results.

In this case, however, the couple became angry when their name wasn’t on the voting roster and left before poll workers could offer them provisional ballots, said Robert Inman, the Haywood County election director.

“(She) was upset and decided to leave before there was an exchange of communication that would have led to her casting a provisional ballot,” Inman said.

Even though the couple left, the poll workers called the county election office and reported the incident. They researched the couple’s name and address and discovered the mapping error. The couple was contacted and asked to come back in and vote, which they did.

The mapping error was fixed and all residents of the apartment complex were added to the voting roster by 10:45 a.m. on Election Day. Both Henderson and the couple who were initially told they weren’t on the roster came back in and voted. Ultimately, nine residents of The Laurels at Junaluska voted in the election.

“If you had been denied your right to vote we would have a problem with it because we don’t want to deny anybody the right to vote,” Yates told Henderson at a hearing on his election protest Monday, Nov. 21.

Henderson agreed there is no way of knowing whether anyone tried to vote and couldn’t, especially since the error was fixed by mid-morning.

Yet Henderson believes that everyone who lives at The Laurels was disenfranchised from the outset — simply by not knowing whether they were in the town limits in the first place.

“They had no idea they were eligible for this election,” Henderson said.

Anyone in the apartment complex who had registered to vote in the past four years had been issued incorrect voter registration cards that failed to include they are eligible to vote in town elections. Phillips questioned whether voters may have called the election office in advance of the election to see if they were eligible to vote, and being told no, never bothered to come to the polls in order to cast a provisional ballot.

Inman said that while the mapping error is regrettable and being taken seriously, the election board isn’t responsible for making sure people know whether they reside in the town limits.

Henderson pointed out that in such a close election — only a 31-vote spread between Mayor Gavin Brown and Phillips — the voters in the apartment complex could have swung the election had they voted. Only nine of the 90 registered voters in the apartment complex cast ballots.

“The 81 votes that were not cast could potentially effect the outcome for mayor,” Henderson said.

“We can’t be responsible for the ‘what if’s’ if they did and ‘what if’s’ if they didn’t,” Yates replied. “We can’t be responsible for the 81 people who didn’t vote.”

That’s the whole point of provisional ballots, Yates said. Anyone who shows up to vote gets to do so, even if they have to fill out a paper ballot and have it verified later.

“If they had gone by their precinct, they would have gotten a provisional ballot,” Yates said.

Besides, the only remedy would be to hold an entirely new election. It would be illegal to hold a special second election for a select group of residents in the apartment complex, said Chip Killian, the attorney for the county election board.

Holding a new election for the whole town would cost $10,000 to $15,000 dollars, Yates said.

Hugh Phillips said he doesn’t want to cost the county the money of holding a second election but doesn’t think it is fair that people were led to believe they weren’t in the town limits and that they may have voted otherwise.

“I hold the Town of Waynesville and Haywood County responsible for this snafu,” Phillips wrote in his election protest. “Someone in the town or county should have made known to the Board of Elections that these residents were citizens of the town and had the right to vote.”

Phillips said he got a list of registered voters from the election board when campaigning, and that list didn’t include The Laurels at Junaluska. As a result, he didn’t reach out to them with his candidate message.

Henderson made it clear in his protest that he wasn’t happy with the election outcome. He wanted Phillips to win.

But he says even if Phillips had won, he still would have filed his election protest on principle.

Lake Junaluska Conference and Retreat Center has reached a critical crossroads on the eve of its 100-year mark. It’s headed toward financial insolvency, and the only thing that can save it now is a bold and aggressive makeover aimed at reclaiming dwindling guest numbers.

The Methodist institution and Haywood County landmark has struggled to stay relevant in a changing world. Lake Junaluska found itself suddenly marooned — caught off guard and with no lifeboat in sight — as the audience for its mainstay church conferences and theological retreats aged.

Meanwhile, its outdated facilities failed to keep up with the tastes and expectations of guests it could have otherwise courted to make up for the lost numbers.

Failure to change course is certain death. But the road to recovery is marked by a modicum of risk — taking on debt in order to bail itself out.

The Smoky Mountain News had a candid and open conversation with the man hired to turn the ship around, Lake Junaluska’s new executive director Jack Ewing.

SMN: So just what is Lake Junaluska’s financial status?

Jack Ewing: “The bottom line is in the last six years we have balanced our budget only once, and I am sorry to say in all probability we will end 2011 with a deficit budget as well.”

Losses have ranged from $200,000 to $400,000 a year recently out of a nearly $9 million budget. Reserves have made up the difference, but those reserves are running out, down to around $2 million.

Meanwhile, guests continue to decline. And subsidies from the Methodist church have been taken away, making the situation even worse.

Why is the conference center losing money?

The Lake has seen a 17 percent decline in overnight stays since 2007. Overnight stays are the conference center’s main source of revenue, and more than 90 percent of its hotel guests are part of a group conference or retreat held on the groups.

“We are heavily dependent on groups for revenue. It is not good for us to be heavily dependent on group business because our group business is declining. Here is another unfortunate truth about group business. A majority of our groups book two to three years in advance. The projection for 2012 is worse than the projection for 2011.”

Is there a clear road back to financial solvency?

“You might look at this and say, ‘It is bleak. You may as well shut the doors.’ It is bleak until you stand on the balcony of the Terrace Hotel and say, ‘This is unbelievable.’ The potential is great. Once we have lodging, food and meeting space that meets or exceeds our guests’ expectations, it will be so easy to sell Lake Junaluska. But, it is going to take some money. We’ve got to find some money to make it happen.”

What solution have you and the board of directors decided on?

“The world is changing. What people want is changing, and what people are willing to pay for is changing, and therefore Lake Junaluska will have to change as well. The first major challenge we have is the condition of our dining, lodging and meeting space are not of the standard that will sustain our traditional guest base nor attract a broader guest base.”

What do you mean by a larger guest base?

“We have to figure out how to optimize our leisure vacation business, because who would not want to come and stay at Lake Junaluska. We are open to people to come off the street and say ‘Can I stay at your hotel?’ They don’t have to be United Methodist, they don’t have to be part of a group. Our lodging facilities are open for people to stay.”

With an annual occupancy rate of only 26 percent, revenue simply isn’t covering the overhead of keeping the facilities open. The Lake has to increase its guest numbers, and that means tapping the vacation market and going after secular conference business.

Why didn’t the administration take action to right the ship sooner?

“It is always easy in retrospect to look at things and say ‘Why didn’t we figure this out earlier?’ I think it is a combination of several factors.” In a sense, the Lake was hit by a perfect storm that is obvious in hindsight but perhaps not so much at the time.

The traditional audience for church conferences and retreats is aging. Meanwhile, the Lake put off make-overs to guest rooms and failed to keep its facilities modern and as a result couldn’t attract new business to make up for what it was losing.

Were you hired as the turnaround guy?

In short, yes, Ewing said.

“I didn’t know the details of the challenge, but I knew the challenge.”

He took over as director of Lake Junaluska in January following the 11-year tenure of former director Jimmy Carr.

Ewing comes from a background in college education, serving as the president of two Methodist colleges during 16 years. He equates his role now with his role at Dakota Wesleyan University, where there hadn’t been a balanced budget in 10 years and a sense of hopelessness had set in before Ewing arrived.

“It is amazing how a sense of hope helps both the employees of and organization and the supporters of an organization. I am trying to give hope. It is not a pie in the sky hope, it is real.”

Lake Junaluska was dealt a major blow four years ago when the Southeastern Jurisdiction of the United Methodist Church began phasing out $1 million in annual subsidies for operations. How is that going?

“Hear me loud and clear: we are exceedingly grateful for the funding the church has provided us. The church has made it possible for us to remain in business.”

The loss of that funding, however, was major.

“That is a huge challenge for us going forward. It is the crisis that helps us to focus our efforts and energy going forward.”

Why are fewer groups booking conferences at Lake Junaluska?

Part of the problem is the traditional demographic that attended Methodist conferences.

“United Methodists are aging and are not being replaced by younger people attending events. They are either dying or they are not physically capable of coming. We are going to have a very focused effort on trying to attract children, youth and their parents.

How do we get those young people to come to Lake Junaluska?

It is going to require us to think differently. The playground built 35 years ago may not be the right playground for children today.” The same for other athletic and recreation facilities.

Where will you pick up extra business if Methodist conference attendance is dropping?

“We are going to have to attract some secular business.”

Lake Junaluska plans to heavily market itself as an ideal retreat and conference venue to the non-profit world.

But the Lake also hopes to pick up business from individual guests who just want to come on vacation to Lake Junaluska. Right now, only 10 percent of guests staying at the lake are simply vacationers unconnected to a conference or group. That has to increase for the operations viable.

What does Lake Junaluska have going for it as a conference and retreat center, or vacation destination for that matter?

“What makes Lake Junaluska so spectacular are the outdoors spaces. The lake is by far our greatest asset. We have got to take care of it, we have got to invest in it. We have to make sure we are protecting our shore and our water quality. All our renovated facilities on the lake need to engage with the lake.”

How much will renovations and new facilities cost?

About $20 to $30 million. But it’s sizably less than a master plan for the lake created three years ago, with a price tag of twice that amount.

What role will fundraising play?

“I think we can raise half of that money. There’s a lot of people who have money who want to give it to Lake Junaluska, they just don’t know it yet.

“Because of the incredible experience people have had at Lake Junaluska over the years, when we tell the story and give specific examples of how a gift can impact the future of Lake Junaluska, they will want to give.

“It is really beautiful when you can sit down and say, ‘Here is what we are trying to accomplish’ and connect with the need all of us have to be a part of something significant beyond ourselves. They are ready to give but they want to know what we are going to do.”

Where will the rest of the money come from?

“We are going to have to borrow some money in order to make this happen.”

Ewing hopes to take out a traditional loan from a financial institution, but as for collateral, that “is an existing question we would have to look at.”

The lake has undeveloped land it could put up for collateral rather than the facility they are taking out a construction loan for. To pay back the loan, the Lake will need to net more each year than it spends on operations — not only erase its deficit but actually create a positive balance sheet — to make the loan payments.

The lake only has $2.5 million in current debt.

What if the extra business you are banking on doesn’t materialize after taking on the debt?

“Who has ever been successful in their lives from an entrepreneurial perspective if they haven’t taken the risk?”

But in this case, Ewing sees the risk as almost nil.

“We have confidence this will happen.”

Stuart Auditorium is old as Lake Junaluska itself, originally little more than a canvas roof over a tent frame, holding the very first Methodist sermons when the institution was founded in the early 1900s. What will become of this large lakeshore venue?

“When Stuart was built in 1913 it was not intended to last for two centuries.”

It isn’t big enough — it seats 2,000 but really the Lake needs a venue for closer to 3,000. It has exorbitant heating and cooling costs. It doesn’t meet modern audio-visual standards. In short, it might be torn down, although complete overhaul isn’t out of the question.

“Stuart is a place people love. While I strongly desire us to have a facility that meets our need going forward, if it can be done by preserving the current facility, great. But what is most important is to have a forward-looking building.”

Whatever is built back in Stuart’s place will have the same signature look of a giant revival tent.

“If we replace it, people will know it is Stuart Auditorium. It would be a newer version, a 21st century building that meets our space needs going forward. Stuart will be the signature building going forward for the next 100 years.”

What else could face the wrecking ball?

The Harrell Center falls dismally short as the primary meeting space on the grounds and fails to accommodate the needs of groups coming to the Lake. A new Harrell Center will be outfitted with flexible meeting space and will tie in with the new Stuart Auditorium next door — as well as integrate with the underutilized lake shore.

A new Harrell Center would be able to host a 400-person banquet. The largest banquet space on the grounds now is 150.

Jones Cafeteria is also on the short list, but like Stuart, could be fixed with a major, major renovation instead of complete tear down.

What about the Terrace?

Ewing called the Terrace an unfortunate example of the “architecture du jour” syndrome. It looked great in the 1970s — but the fleeting look didn’t last.

The Terrace needs façade work to make it more attractive from the outside, new furnishings in all the guest rooms, and complete gutting of the guest room bathrooms.

It is terribly dated. Most hotels update their rooms every five to seven years. It’s never been done at the Terrace since it opened in 1977, and people aren’t getting the value of what they are paying now, Ewing said. A major interior renovation is in the cards.

Any plans for the Lambuth?

Ewing wants to transform the stately inn into a “grand hotel experience.”

“I like to think about it being Greenbrier like. People will want to come to Lake Junaluska to stay at Lambuth Inn.”

Renovations will make it into a luxury hotel, although not with the luxury price tag.

What’s the time line?

Everything must be finished in five years. The Terrace will likely come first, then the Harrell Center, then Stuart, then the Lambuth.

How did you decide what needed fixing most?

“How do we strategically invest in things that will be revenue producing? We cannot be spending money on things that will not have a return on investment.”

A strategic planning committee in concert with the board of directors for the lake developed the master plan for what had to be done. Also, a facility audit of every building at Lake Junaluska was prepared by an outside firm with the help of a local architect.

What will you do about the deficits until the Lake’s new image and facilities start to bring in increased revenue?

The Lake will balance its budget starting in 2012. It has to come up with at least half a million to do so — enough to cover the $200,000 to $300,000 operational deficit it has been running and to cover the last $250,000 in subsidies from the church that will be phased out next year.

“Everybody on the staff has been challenged to think of ways to optimize revenue and control expenses.”

If demand doesn’t justify keeping all the buildings open, why not shut some down?

“We have the same number of facilities open today as we had 10 years ago. We may have to in the short-term ‘right size’ the organization before we can grow bigger and grow stronger. We may have to shut down some buildings.”

In fact, the Lake has been shutting down the Lambuth Inn – and occasionally even the Terrace – during slow weeks in the winter for a few years already.

“It is not new. We are just trying to be a little bit more strategic in the way that we do that. But it isn’t what we want to do long term.”

Has Lake Junaluska considered offering alcohol to appeal to a broader market and younger demographic? Or at least allowing it under special use permits?

“There is nothing in this plan about serving alcohol to attract groups from the outside. There are plenty of groups that would love to come that do not expect or need to have alcohol. We are planning this future with a clear understanding and commitment of Lake Junaluska as a place that does not include alcohol.”

Besides, the property deeds that govern facilities at Lake Junaluska ban alcohol.

“So at this point it is a moot issue. There may be a need for that issue to be evaluated at some point in the future, but it is not part of our planning process.”

Is charging for a grounds pass on the table, rather than allowing free public access to the walking trail, rose walk and gardens, playground and other recreation sites?

“The way I am approaching that is not from the perspective of charging people to come but giving people the opportunity to spend money when they arrive. There is a tremendous opportunity for a place where we are not charging somebody for the experience but giving people an opportunity to get something they want and that will be beneficial for us.”

This means ice cream, coffee, sandwiches and retail — perhaps by vendors but perhaps food ventures run by the lake itself. Ewing envisions a plaza lakeside around the new Stuart Auditorium.

A baby bear went on a romp through downtown Waynesville last week before finally being cornered and captured by police officers on a preschool playground on Main Street.

The bear was first spotted on the playground of the First United Methodist Church preschool. Preschool staff called the police department then tracked the bear cub as it moved through downtown, keeping tabs on its whereabouts until police arrived.

Two blocks later, it jumped the fence of another preschool playground, First Baptist Church.

It was a stroke of luck for those trying to catch the bear. The sunken playground is surrounded by a brick wall or fence on all sides. A growing field of spectators pitched in, surrounding the playground and running interference to keep the bear confined while waiting for an animal control officer.

By now, three Waynesville police officers had arrived and orchestrated the efforts to keep the bear inside the playground, shooing and clapping at it each time it attempted to scale the wall or climb the fence. But the cub was growing increasingly agitated, fueled partly by the mounting number of onlookers with cell phone cameras encircling the playground. One spectator fetched a rope from his truck, tied a loop in it and began trying to lasso the bear cub.

With still no sign of animal control officers and no indication of how soon they would arrive, Waynesville Police Officer Kenny Aldridge decided the officers needed to act.

He jumped the fence into the playground and began working the bear cub into a corner.

“I was somewhat concerned about all the people. A small bear can still do major damage,” Aldridge said. “I was also afraid it would get spooked and get out in traffic.”

Meanwhile, Deputy Micah Phillips donned his leather gloves and began moving in on the bear. Aldridge chased the cub toward a brick wall, and as it began to scramble up, Phillips seized the moment. He dashed up behind the bear and quick as a flash grabbed it by the scruff of its neck.

The bear cub turned into a writhing, flailing ball of fur and claws, which were easily two inches long despite his stature of only 20 pounds or so. Letting go wasn’t an option at this point, so Phillips held tight, even as the bear cub extended both his paws, and reached behind his head groping for his captor. The bear’s claws closed in on Phillips’ wrist, but luckily his gloves proved just long enough — the bear’s groping claws came within half an inch of the top of Phillips’ gloves. Phillips strolled out of the playground, opened the back door of his patrol car and flung the bear inside before slamming the car door.

“I’ve never grabbed a bear before,” Phillips said. When asked how he knew his gloves were just long enough to spare his wrist from being torn to shreds, “That was just a gamble,” he said.

The baby bear’s mother was nowhere to be seen — perhaps killed, but most likely out of the picture due to the food shortage facing black bears throughout the mountains this fall. Mothers unable to provide for all their young will abandon some of their cubs. A cub going into the winter without its mother is certain death, however. The cubs don’t yet know how to find food on their own, nor do they understand how to den up and hibernate for the long winter.

Making matters worse, the bear cub had not faired well on its own and was clearly malnourished and underweight for its age, hardly equipped to survive the cold season ahead.

The bear cub was taken to a bear rehabilitation and rescue center where it will spend the winter and then be released into the wild next summer.