With Haywood County’s revenues down by 4 percent, schools are looking at another year of disappointing budget allocations at the local level.

Preliminary budget figures show the Haywood County public school system might receive $335,000 in capital outlay funding from the county — a far cry from the $735,000 it requested.

Capital outlay includes any costs related to buildings on school property, from replacing roofs to regular maintenance to new construction.

Meanwhile, Haywood Community College might get $165,000 for capital outlay needs despite its request for $500,000.

To make matters worse, both figures are part of a budget that is short by more than $738,000.

“With revenues as flat as they are this year, we may even have to cut that some more,” said Commissioner Kevin Ensley.

But HCC President Rose Johnson stressed that the college’s capital needs are even higher than the $500,000 it requested this year.

“We are serving a student population of 11,000,” said Johnson. “The stress of doing that in facilities that need major renovations and repair is becoming very strong.”

For example, the college must completely redo its heating and air conditioning system in Building 300, where general education and natural resources classes take place.

Replacing the heat pumps alone would cost $270,000, with the total for the project nearing $560,000, according to HCC.

Recently, the air conditioning went out in the cosmetology building at HCC, which alone will take $17,000 out of HCC’s budget.

Some county commissioners had suggested dipping into the quarter-cent sales tax funds HCC receives to cover maintenance needs for the time being.

Johnson and the board of trustees vehemently oppose the idea, stating that money from the quarter-cent sales tax was passed solely to fund new construction at HCC — and that’s exactly what it will be used for.

Johnson said with a growing population of students, that money should be used to build a creative arts building that meets the needs of today as well as the future.

“If we began to defer funding from that fund, then we are really sliding behind meeting the needs for the campus,” Johnson said.

Commissioner Kevin Ensley said all organizations should understand that the commissioners’ hands are tied.

“This year, we’re just trying to hang on,” said Ensley. “What they receive will reflect what the economy is giving us right now.”

Ensley says a tax increase to bring in more revenues is absolutely out of the question, considering how much citizens are still suffering under the recession. “Having to do with less, we can’t ask for more,” he said.

Commissioner Mark Swanger agreed, stating that he is “confident” that there will not be a tax increase this year. He praised department heads, along with Finance Officer Julie Davis and Assistant County Manager Marty Stamey, for cooperating under a tight budget.

Though public schools receive money from both the county and the state, HCC meets all of its capital needs from county funding alone. Drastic cuts in the county budget means the college is helpless in completing necessary maintenance.

Donna Forga, vice-chair of HCC’s Board of Trustees, said she like many others feels let down with what the county has pledged.

“We recognize the financial situation that the county’s in, that every organization is in right now, these are times that we’ve not seen financially,” said Forga. “While we understand that, we’re disappointed in that.”

A depleting reserve

Haywood County public schools have grown accustomed to seeing money flow in steadily from both the county and the state, but they’ve had to make a tough adjustment since the economic downturn.

Before the recession, Haywood’s school system annually received $600,000 from the county to support its capital needs. In addition, the board chipped in another $135,000 annually to meet its 25 percent match requirement for state per capita funds.

From the state, the school system drew in $500,000 each year in lottery funds, and $500,000 more in per capita funds, which are based on how many students attend Haywood’s schools.

Public school leaders have saved up this money from multiple sources for quite some time, but since county commissioners slashed their budget, they’ve had to dip into the pot.

“If it wasn’t for the lottery and the [state per capita money], we wouldn’t be able to do quite as much as we can do now,” said Tracy Hargrove, maintenance director for Haywood County Schools.

Despite the recession, commissioners have managed to come through with the 25 percent local match for state per capita funds, as required by law.

The county board recently approved allocating $106,500 to replace a flat roof at North Canton Elementary and begin an HVAC and electrical upgrade at Central Haywood High School.

Even though the school system now holds $1.16 million in lottery funds, it has devoted all but $286,000 of that money for two turf projects, according to Finance Officer Larry Smith.

Money is slowly but surely running out.

Assistant Superintendent Bill Nolte said the county has received no state per capita funding this year, and they will likely receive none next year as well.

“There’s just not a lot we can plan for,” said Nolte.

Hargrove said the schools will just have to prioritize with the money it is getting.

“It’s like anything else, you can always use more money,” said Hargrove. “Is there anything that’s live or die that’s being pushed out? No. We can survive.”

On Monday evening, the Jackson County Board of Commissioners met with leaders from Jackson County Schools to talk about next year’s budget, but any outstanding fears had already been put to rest.

County Manager Ken Westmoreland said because the county has spent 12 percent less than it budgeted for the current fiscal year, he didn’t anticipate cuts in any county departments.

“I do not anticipate any furloughs, layoffs, or losses of service,” Westmoreland said. “We’re pretty much just going to tread water.”

Jackson County Public School Superintendent Sue Nations said her staff had already submitted capital outlay and operating requests to Westmoreland for consideration. The school district is asking for a 2 percent increase in funding to offset increases in insurance premiums and deep cuts in state discretionary funds.

Westmoreland said the county would evaluate the school budget request in line with its other funding obligations.

“It’s not that they would be treated any differently than any county department or agency we fund,” Westmoreland said. “I’m not anticipating any cuts or expansions.”

For her part, Nations was confident that the county would come through for the school district, but she expressed concern about Gov. Perdue’s proposed budget.

“The county will give us the amount of money we had last year, and I hope they’ll give us the 2 percent increase,” Nations said. “But the county can’t pick up what the state won’t give us.”

Perdue’s 2010 budget calls for $135 million of cuts in addition to the $304.8 million worth of discretionary cuts already contained in the budget the General Assembly approved last year for the 2010-11 fiscal year. Overall, the governor’s budget calls for an additional 3.8 percent in cuts plus another $90 million in General Fund reductions to the K-12 budget.

According to the North Carolina School Boards Association, districts across North Carolina had 16,253 fewer state paid public education jobs, including 4,701 fewer state paid classroom teachers, in the 2009-10 academic year. The additional $135 million in discretionary cuts could mean as many as 2,430 additional teaching positions could be eliminated next year.

Nations said her district already employs 95 fewer people than it did in May 2008. She said she does not intend to cut any positions this year, because she hasn’t replaced employees that have left or retired.

“I know we have to do our part. I really do,” Nations said. “But there’s a point at which it’s going to affect the classroom.”

Nations said the district would still benefit from federal stimulus money it received last year. Districts were instructed to use the money over a 27-month period, and last year the stimulus funds offset state cuts nearly dollar for dollar.

Haywood Community College remains hopeful that the county will increase funding to the college, despite reluctance by the county commissioners to provide what they see as special treatment to HCC amidst across the board budget cuts.

“I view it as an unresolved issue at this point,” said HCC President Rose Johnson.

During the recession, commissioners slashed capital funding to the college and public school system by two-thirds, cut out nonprofits completely and laid off nearly 40 county employees.

The county had previously promised to pay for two new roofs and a major renovation at HCC with the annual contributions. But now, commissioners plan to dip into a special sales tax fund to pay for the projects.

The special sales tax was approved by voters specifically to fund expansions at HCC — not maintenance, according to college leaders. The college wants the county to restore its annual maintenance budget and reserve every penny of sales tax revenue for new construction and expansion.

Johnson met with county commissioners earlier this month to plead the college’s case and plans to meet with the board again soon.

Haywood Community College leaders are at odds with county commissioners over funding for the college.

The county slashed capital contributions to the community college by two-thirds due to the recession. The college counted on the annual funding for repairs and renovations and is now hamstrung by the loss.

Unable to produce what was promised during better times, the county commissioners have pitched another solution: dipping into a special pot of money earmarked for expansion projects.

College leaders don’t like the idea. Dipping into the special pot of money to cover repairs — like new roofs or paving jobs — would sideline some of their expansion plans for new buildings.

College leaders responded with a two-fold appeal to the commissioners. They want their annual maintenance funding restored. And they want the special pot of money to be placed in a lock box to fund new construction only.

The college is entirely dependent on the county for construction dollars, whether it’s filling potholes, patching holes in the roof, replacing carpet or building new facilities. While the state funds community college operations, from salaries to the light bills, it doesn’t pay a dime toward upkeep of buildings or new construction. That is left up to counties.

“They have a responsibility to build the buildings the community college needs,” said Bill Bird, a supporter of Haywood Community College. “They need to find the money to do it.”

But the county claims it is cash-strapped and can’t afford to restore the funding that was cut.

“I am looking for a win-win situation, and it is tough to have a win-win situation when you don’t have money,” Commissioner Bill Upton said.

Bird said that the commissioners seem to find the money “to do they things they want to do,” however.

Recession hamstrings county

When the recession hit, commissioners slashed the county’s budget by $7 million. No branch of county government was spared. As a last resort, commissioners even enacted a slight property tax increase to avoid deeper cuts.

The college saw its annual contribution for maintenance and construction drop from $500,000 to $165,000.

“Capital outlay across the board was reduced by two-thirds. No particular entity was singled out,” County Manager David Cotton said.

Nonetheless, it created a backlog of repair needs at the college. The nursing building has no insulation and the siding is deteriorating, for example. That was on the list to repair this year, but got pushed back, said Debbie Trull, executive director of administrative services.

“I understand the commissioners are in a real problem financially with the amount of taxes they collect and the amount of wants,” said Larry Leatherwood, the leader of a group that supports full funding for the college’s needs. But the county can’t simply let the buildings at the college crumble, he said.

“If you don’t take care of what you got, you end up spending more in the long run to fix what you had,” Leatherwood said.

College leaders argued that HCC is an economic driver in the community. Its practical degrees, both for young students and the unemployed trying to re-enter the workforce, are invaluable. HCC even partners directly with industry in the county to provide job-specific training.

Enrollment has increased in recent years, and HCC will serve more than 10,000 students this year.

“That is a number, but behind that number is a lot of pressure on the college and its facilities,” said Dr. Rose Johnson, HCC president.

Even before the cuts, the annual funding wasn’t enough.

“We have a lot of buildings there now and to maintain what you own takes right much money every year,” said Neal Ensley, a member of the college board of trustees.

It certainly wasn’t enough to fund expansions. The master plan calls for a new building for the flagship arts and crafts program, an expansion of its equally renowned natural resources department and a new building for emergency services instruction.

“The money you get for maintenance is not sufficient to build new buildings or to make major additions,” Ensley said.

That’s why the college needed a special pot of money. And the perfect solution just happened to come along. In 2007, the state gave counties the option of enacting a quarter cent sales tax. In Haywood County, it would raise about $1.5 million a year — a nice sum to pay for HCC’s expansion plans.

Typically, counties don’t have the power to enact sales tax, but the state made an exception. It came with a hitch: counties could enact the quarter cent sales tax only if it was put on the ballot and passed a countywide vote. Commissioners decided to take the gamble, pledging to dedicate the sales tax proceeds to HCC if the measure passed.

Supporters of the community college mounted a campaign to convince the public to approve the measure, and it worked. The sales tax passed with 57 percent of the vote in May 2008. Haywood County was one of only a few counties where the voluntary tax passed muster with voters.

“I have to thank the people of Haywood County for passing that. It shows the people of Haywood County think the community college is a real source of help for them,” Neal Ensley said.

The pitch to voters throughout was clear. The sales tax would be set aside for construction and expansion on the campus of Haywood Community College.

“The money we were going to raise with the quarter cent sales tax was new money not to supplant or take the place of or eliminate the maintenance money,” said Larry Leatherwood, the chairman of Neighbors of Haywood Community College, a group that formed in 2008 with the express purpose of lobbying the public to pass the sales tax.

College leaders are upset at the prospect of using the special pot of money for general maintenance.

But Julie Davis, county finance director, sees the situation far more positively. The sales tax money offers the college a lucky break.

“If it weren’t for the sales tax, I don’t know that the county could come up with the money without increasing taxes,” said Julie Davis, county finance officer. “Thank goodness we have the sales tax to give.”

In reality, the county is only proposing that a small sliver of the quarter cent sales tax go toward maintenance: about $800,000 for two major roof repairs. The rest would still be going to new construction projects for now.

College leaders fear the commissioners are setting a precedent, however. Instead of restoring the annual capital outlay to pre-recession levels, the county may stick with the lower contributions and rely on sales tax proceeds to make up the difference.

“If we spend the quarter cent sales tax on anything but new buildings, we won’t get the new buildings we need,” Ensley said.

Commissioner Skeeter Curtis said that’s not what he intended nor what the voters were told.

“I looked at it as this was money you would have in addition to what we already gave you,” Curtis told the college leaders. “We have to decide which way we are going to go. Are we going to say we aren’t going to give them any money because the quarter cent sales tax satisfies their needs?”

Tension at work session

Community college leaders and county commissioners met last week to hash out the issue. Despite civility by both sides, the tension was obvious.

Commissioner Bill Upton opened the meeting in a friendly fashion, but admitted upfront that everyone may not get what they want.

“Tonight is for us to listen,” Upton said. “We’ll find out what we agree on and what we don’t agree on. We won’t always agree, but we will go away happy knowing that people are listening.”

“I appreciate you laying the groundwork for this being friendly and informative conversation. That’s how we are approaching it also,” Johnson replied.

The format wasn’t exactly what the college desired, however. The commissioners took their usual place behind a long meeting table at the front of the room, while college representatives sat in the audience. To speak, they had to take turns coming up to a podium and speaking into a microphone.

“We envisioned we would all be sitting at a big conference table to allow for more give and take,” Johnson said at one point in the meeting.

The community college came armed with a slide presentation, replete with bar graphs and charts. The first half was aimed at demonstrating the value of the college to the community, followed by budget numbers illustrating the funding shortfall.

The college produced staggering figures: $33.2 million is needed between now and 2014. The number includes new construction, repairs, renovations, equipment and infrastructure.

The figures weren’t pulled out of a hat. Johnson said college staff spent the past two weeks getting estimates from contractors for every item on the wish list.

Of the total, new buildings and major additions account for the lion’s share — $25 million. It would take 30 years for the sales tax revenue to cover it all — even if none of it is diverted for maintenance and repairs.

County Manager David Cotton said the college clearly has needs beyond what the sales tax will pay for at the moment, but there’s nothing the county can do about that.

“I understood the agreement was ‘pay as you go’ and the quarter cent sales tax, whatever that amount was, would be the cap,” Cotton said.

Flagship in tatters

The first new building the college plans to tackle is a creative arts building, one of the college’s renowned degree programs. The college teaches commercial woodworking, pottery, weaving, jewelry making and more, along with a business component that helps artists thrive as entrepreneurs.

“It so well-known that people move here to do that program. It has been very important to us,” Neal Ensley said.

But the arts and crafts building is also one of those most in need of repair.

“It was falling down around the students,” Leatherwood said.

The old one will simply be demolished after the new one is built. The cost is estimated at $10 million.

The quarter cent sales tax is on track to bring in $1.5 million this year. It’s enough to cover payments on a $12 million loan over 15 years. That leaves another $2 million on the table for other projects that could be wrapped into the loan and tackled immediately.

Plus, the sales tax will likely reap a little more each year as commerce increases.

“When the economy does recover, I would anticipate some natural growth in the sales tax so I would think over time there would be additional funds annually,” Cotton said.

Not every penny of the sales tax proceeds will go to the loan payments, leaving more to work with.

But, the problem remains whether the county will restore the college’s annual contribution, which went toward maintenance.

“If we don’t get that annual allocation, we can’t function as a college. So that is the true issue,” Johnson told commissioners.

Buildings on campus are valued at more than $50 million, and it takes money to maintain that kind of facility, said Neal Ensley, an engineer and a member of the HCC trustees.

“If we don’t get that [appropriation], it will be a serious problem for the college,” Ensley said.

But that’s something the commissioners can’t answer right now. Next year’s budget is still in its infancy. It will be refined over the next two months as commissioners grapple with the usual tough decisions.

With the economy holding steady if not improving slightly, the county’s revenue should begin looking up. As commerce increases, so do sale tax revenues, which the county gets a part of. And as construction returns, new homes and businesses get added to the property tax base.

The uptick will be slight if anything, and for now the county is banking on a flat budget for the coming year.

“We don’t have the money right now, and it is hard to make people happy when you don’t have money,” Upton said.

“This budget is going to be tough,” Commissioner Skeeter Curtis agreed. “We cut millions of dollars in the current budget. The employees gave up time and money out of their pocket to get us where we are.”

“And jobs,” Commissioner Mark Swanger added.

“We cut the school system, we cut the county, we cut a lot of other people,” Upton said.

The county would be in a difficult position if it restored the budget for the community college ahead of everyone else, Upton said.

“I’m sure our school people would come to us and say ‘How about reinstating our capital outlay,’” Upton said.

Root of the conflict

An underlying source of contention is whether the county has failed to deliver on financial promises it made to the college over two years ago.

In 2007 — before the quarter cent sales tax idea was on the horizon — county commissioners and college leaders struck an agreement to give the college an advance on their annual funding. The college had a couple larger than normal projects it wanted to carry out — projects that exceeded the $500,000 capital outlay it was getting from the county each year.

So the county commissioners agreed to take out a $2.6 million loan on behalf of the college to fund the work. The county would then deduct the loan payments from future contributions each year until it was paid off.

“We couldn’t see anyway to get anything done at HCC unless we borrowed the money and paid it back with the $500,000,” Upton said.

The college got to work preparing construction documents and paperwork for the loan. But the construction documents were held up at the state level. In all, the process took two years.

With everything finally in hand, the college came to the county last month ready to make good on the offer of a loan.

But along the way, things had changed. Most notably, the recession had a stranglehold on the county. As part of countywide cuts, the college saw its maintenance and construction funding slashed by two-thirds, from $500,000 to $165,000.

The county commissioners couldn’t guarantee when the annual funding would be restored. That threw a wrench in the plans for a loan. The annual contributions were supposed to cover the loan payments but were no longer enough to do so.

Upton said the commissioners were somewhat surprised when the college showed up last month asking the county to make good on the loan promise made over two years ago.

“For two years, we really haven’t talked about the $2.6 million,” Upton said.

“I disagree,” Dr. Johnson replied.

“Where was it talked about?” Commissioner Mark Swanger asked Johnson.

Johnson said the college board of trustees and the college strategic planning committee regularly referenced the pending loan from the county. County Manager David Cotton was a part of those meetings, and Johnson assumed he was reporting back to the commissioners.

“There seems to be a disconnect between what has been discussed very thoroughly in strategic planning meetings and what has been presented to the commissioners from those meetings,” Johnson said. “We made decisions based on what we were understanding from county staff.”

Johnson said that appears to be the source of the misunderstanding.

Cotton took issue with the comment and called it disparaging.

“You address your board and I address mine. I feel I have kept them up to speed on the process. I did take offense to that remark,” Cotton said.

Johnson apologized and said she didn’t intend it that way. Johnson said the college trustees “moved forward in good faith” on things that apparently weren’t hard and fast decisions.

Swanger said discussions the college leaders had with county staff during planning meetings are just that: discussion, not decisions.

“They are not binding,” Swanger told Johnson. “We need to make sure that monetary decisions are not made based on conversations that were not formally endorsed by this board.”

However, Johnson assumed she would have been corrected somewhere along the way if the loan had been taken off the table.

Upton asked why it took so long for the loan to get squared away.

“Our request for that construction was stalled at the state level for many, many, many months,” Johnson said. “It was not lack of work on the behalf of the college. It was beyond our control.”

Johnson said county staff was updated regularly of the status.

The college had two projects in mind for the $2.6 million: $1.8 million for an expansion and $800,000 for major roof replacements.

As the college waited and waited to get construction documents approved on the expansion, it chose to move forward with the roof repairs. To pay for it, the college borrowed from flood settlement funds. The flood money stemmed from the 2004 flooding along the Pigeon River, which destroyed several satellite HCC buildings near downtown Clyde.

The flood money was supposed to go toward only new construction, theoretically to replace the destroyed classroom buildings, and not things like roof repairs. But the college planned to pay back the borrowed flood money as soon as the loan from the county came through.

Johnson said it is “critically important” to repay the flood money.

“We need to repay the flood settlement fund for monies that have been diverted for other purposes,” Johnson said.

Johnson said the county had previously agreed to pay back what was borrowed from the flood account with the $2.6 million loan.

Commissioners seemed puzzled, however, and asked County Manager David Cotton if he could remember such a promise.

Johnson said she thought the commissioners passed a resolution to that effect. Cotton disagreed. The commissioners did pass a resolution pledging to help the college with a loan, but it made no reference to paying back what was borrowed from the flood settlement fund.

“I wasn’t aware there was an agreement for you to spend money and get reimbursed,” Davis said.

“I wasn’t aware of it,” Commissioner Skeeter Curtis said.

“I wasn’t aware of it,” Commissioner Mark Swanger echoed. “I wasn’t even aware that money was being used. I reviewed the minutes, and it is not reflected in the minutes.”

Mark Bumgarner, chairman of the HCC Board of Trustees, then stepped up to the microphone and said the more important issue was that the county had promised to take out a $2.6 million loan on the college’s behalf. The college was counting on that, he said.

The college will still get the money, Davis chimed in. It will just come from a different source now.

The sales tax has been accumulating since October 2008. In another few months, there will be just the right amount saved up to cover everything the college needs without taking out a loan.

“We will end up with $2.6 million sitting there,” Davis said. “They are going to get the money, it’s just we aren’t going to have to borrow it.”

“And that is from the quarter cent sales tax money,” Dr. Johnson clarified.

“Right,” Commissioner Kevin Ensley said.

Ultimately, county commissioners voted not to do the loan, but instead to use money from the quarter cent sales tax.

Using the accumulated pot of sales tax money won’t affect the county’s ability to still take out a $12 million loan for the creative arts building, Davis said.

Pinching pennies?

Commissioners questioned whether the college is making the best use of the money it has.

Commissioner Kevin Ensley did a cost comparison of the creative arts building and other construction projects in the county in recent years, including the new jail, justice center and Bethel Elementary School.

“I am a little it concerned with the cost. This is the most expensive building per square foot that I have seen in Haywood County by far,” Ensley said.

“You would have to compare apples to apples,” Johnson replied.

Johnson said the creative arts building requires dust collection systems for the woodworking classrooms, air ventilation for jewelry making and extremely high-energy use for pottery kilns. The college also has to meet energy efficiency mandates imposed by the state for new buildings. The energy used by the kilns and shop tools made it particularly costly to meet those state mandates.

Under Johnson, the college has embarked on green initiatives aimed at sustainability. Commissioner Swanger questioned whether green features incorporated into the building cost more.

Johnson said the building’s green features don’t cost any more than a traditional design would, according to estimates of both.

Nonetheless, Ensley asked the college leaders to go over the plans for the creative arts building and look for savings.

“I want to be a good steward of taxpayers money, and I really wish y’all could take a good look at this,” Kevin Ensley said. “That is my honest opinion — it is a couple, three million too high.”

But it may be too late to realize substantial returns.

“We may have approached the creative arts facility a little differently knowing the facts we know today, but we are sufficiently on the train tracks, and it is really hard to make changes,” said Bumgarner, chair of the HCC trustees.

Commissioner Skeeter Curtis asked why all this mattered since the money is coming out of a special sales tax fund anyway.

“I think we have lost focus here,” Curtis said. “The people in this county voted that in and the quarter cent belongs to the community college. It is their money.”

Swanger said it is still tax dollars being paid by county residents, and it should be spent prudently.

In this case, Curtis said, it was up to the college to be prudent with the money.

Swanger disagreed. If the college overspends on the creative arts building, “then the college comes back to us for additional appropriations to fill in other gaps,” Swanger said.

“We aren’t picking up the gap anyhow,” Curtis countered.

Curtis made it clear that he wasn’t happy about the cuts the college suffered at the hands of the county.

“By law, the county is supposed to keep it up, and we just let it go a long time. It was falling apart out there. We have let a lot of our facilities end up like [that],” Curtis said.

“We have to decide what are we going to take care of. This is going to get worse as years go on. That’s the reason we are in the situation we are in now because we haven’t done anything,” Curtis said. “We need to keep this from happening to the next board.”

Curtis expressed similar sentiments last month when the commissioners became the new owner of the fairgrounds. The Haywood County Fair board had relied on an annual contribution from the county to pay off a loan for a new arena. When the recession hit and the funding was cut, the fair board couldn’t pay the loan and faced foreclosure.

So the county stepped in to rescue the fairgrounds, anteing up the money to pay off the loan after all and assuming ownership of the fairgrounds from the nonprofit in the process.

Curtis had the unique stance of voting against a slight property tax increase last year during the thick of the recession. His reason: it wasn’t enough of an increase. Curtis felt the cuts to the county budget went too deep and too far. Curtis’ seat is up for election this year, but he is not running.

Commissioner Ensley pointed out that the county is paying $300,000 a year on a loan for the construction of the HCC Child Development Center, a teaching institution and daycare combined.

“I think it is important that everyone know the full contributions the county is making,” Swanger chimed in. “The child development center is substantial.”

The county also donated a tract of land to the college for future expansion that is valued between $650,000 and $900,000.

With a large loan payment looming and not enough money to pay it, the fairgrounds turned to Haywood commissioners this week to save it from foreclosure.

Commissioners voted Monday to purchase the fairgrounds facilities and apply for a 40-year U.S. Department of Agriculture loan of between $600,000 and $800,000 to pay off the outstanding debt and make improvements.

The fairgrounds board had counted on annual contributions from the county to cover loan payments on two new additions: a covered arena the size of a football field and a second indoor exhibition hall.

But the fairgrounds, along with all other nonprofits, lost all its funding when the county cut its budget after the recession struck.

“They more or less left us holding the bag,” said Skipper Russell, a farmer and president of the fairgrounds board.

The loan on two buildings totals roughly $337,000.

The county has already pumped $989,871 into the fairgrounds since 1999. Haywood owns the 25-acre property, but not the facilities on it, which include two large exhibition buildings, a livestock barn and a covered arena.

Since the 100 percent cut in its county funding, the fairgrounds has been limping along. It hasn’t been able to install restrooms, concession stands or bleachers at the arena, making it difficult to attract events to the 68,000 square foot venue.

“I think our board of commissioners have put them in a bad position,” said Commissioner Kevin Ensley, who also serves on the fairgrounds board.

On Monday, the county agreed to be responsible for about $15,000 annually in property and liability insurance, as well as $25,000 to $40,000 in start-up costs the first year.

Haywood commissioners will also appoint a seven-member governing board to replace the now 27-member fairgrounds board, though a new advisory board will also be created.

Fairground revenues will pay for a full-time fairgrounds manager responsible for marketing, as well as maintenance and utilities. Commissioner Kirk Kirkpatrick has proposed that the revenues in excess of a certain amount should go toward the loan payment.

If the USDA loan is approved, it would likely carry debt payments of $40,000 per year — far less than what the county has contributed annually in the past.

In previous years, the county had devoted $150,000 annually to the fairgrounds.

“It’s just a Catch-22,” said Commissioner Mark Swanger. “With an incomplete fairgrounds, it’s difficult to attract the venues and events that would make the center profitable. But you can’t get the money to do that because you don’t have the events.”

Swanger said the board would face the same conundrum year after year unless commissioners made a decision to assist the fairgrounds. Most commissioners were quick to distinguish the fairgrounds from other nonprofits since the county owns the fairgrounds property.

They also stressed that the fairgrounds drives the local economy, with 55 to 60 events per year and monthly flea markets that bring 100 vendors to the venue.

“Don’t forget that money passes through our economy two or three times,” said Swanger. “It is part of the economic development engine for the county.”

Citizen Jonnie Cure remained unconvinced.

“I believe this is nowadays what we call a bailout,” said Cure, who accused the commissioners of once again using fuzzy math to justify their actions.

Ensley emphasized that the county would be paying far less annually with the 40-year loan than it had been in the past.

“I’m looking at that as a savings, whether that’s fuzzy math or not,” said Ensley.

Russell admitted he felt bad asking taxpayers to contribute to the fairgrounds when they’re struggling to make ends meet.

“I hate it, but there’s no other option available for it,” said Russell.

Commissioner Skeeter Curtis reluctantly voted for the measure. He criticized the board for cutting funding in the first place and for not taking care of its properties and obligations.

“In the past, we haven’t done what we should have been doing to keep our facilities and our commitments up,” said Curtis. “As long as we keep doing that, we’re going to keep having situations like this.”

Haywood

The Haywood County board has five commissioner seats. Three seats are up for election this year. A party primary in May will narrow down the field to three Democrats and three Republicans for the three vacant seats.

Haywood Commissioner Skeeter Curtis will not be running for re-election this year, meaning at least one new face will join the board come fall.

Curtis said he will not run for a second term in order to focus on family issues. Curtis, a former deputy commissioner of insurance, has been working as a consultant in the past few years, but will return to a full-time position.

“I just really feel right now I need to put all my efforts on that side, on the family,” said Curtis. “I just wouldn’t have enough time to devote to the job [of commissioner].”

Curtis said he’d like to see a lot of people run, especially those from the younger generation.

“I think it’d be good for them to get involved in their county government,” said Curtis.

Fellow commissioners Bill Upton and Kirk Kirkpatrick said they will both seek another four years on the board.

“I would like to help assist the county in continuing to get through this difficult economic time,” said Kirkpatrick, who has been on the board eight years and serves as chairman.

Kirkpatrick initially thought he would step down after this year, but in recent months committed to running for another term.

Upton said he’s had a positive experience serving on the board during his first term.

“I see some good things going on, and I want to see that continue,” said Upton, who commended the board for moving forward on the Wal-Mart purchase and for operating openly.

“There are very few things we don’t televise,” Upton said. “And our chairman has allowed people to speak at work sessions. I feel like we as a group are good listeners.”

Challengers prepare

Mary Ann Enloe, a former commissioner, is undecided whether she attempt to regain the seat she lost two years ago.

“I still have to give it some more thought,” said Enloe, who was a commissioner for eight years and mayor of Hazelwood for 12. Enloe said many in the community are encouraging her to run

Michael Sorrells, a 53-year-old native of Haywood County and Democrat, said he plans to run for the board, a decision spurred by Curtis stepping down.

Rhonda Schandevel, a 45-year-old dental hygienist and Haywood County native, hopes to land a spot on the Democratic ticket as well.

Three Republican candidates who are considering a run include David Bradley, Tom Freeman and Elizabeth Norris.

“I think there are a lot of changes that need to be made,” said Norris. “We need to become fiscally responsible.”

Freeman and Bradley, who serves as the treasurer and executive officer of the Haywood County GOP, could not be reached for comment.

Sorrells owns and operates a service station, convenience store and café in Jonathan Creek, a family business that’s served the rural community since 1968. Sorrells has served on the Haywood County school board for about six years.

Schandevel, who resides in Canton, is an advocate for those with special needs. She has had leadership roles in several boards, including The Arc of Haywood County, The Waynesville Recreation Board, the Tuscola High School PTO, and the United Methodist Women group.

Schandevel said it was important to have a balance on the board, which currently has only males.

“Women and men see things differently,” said Schandevel. “I think that’s very important.”

All eyes on the budget

With the economy still in a recession, the county’s budget will sit at center stage in the upcoming election.

“One of the major issues will be the budget,” said Curtis. “There’s no question about it.”

The current board came under fire last year for raising property taxes by 1.7 cents during a recession. Commissioners said it was necessary to make ends meet and avoid painful cuts to core county services.

“To me, the big issue is still the budget and making the best of not having the monies we had in the past,” said Upton.

Kirkpatrick said this would be another year of slashing every non-necessity from the budget, all the while keeping property taxes as low as possible.

“It will be difficult as it was last year in cutting down some of the needs to determine what has to be spent to continue to keep the county going,” said Kirkpatrick.

Sorrells said he would try to lighten to load on the taxpayers “if at all possible” by reevaluating every department to see where cuts could be made.

Kirkpatrick agreed but said candidates should detail exactly how they plan to lower taxes during hard times.

“Everybody wants to cut the tax rate, but nobody can ever point to what it is that they’re going to cut,” said Kirkpatrick.

Western Carolina University professors who haven’t already done so are running out of time to take a mandatory 10-hour furlough by year’s end.

Earlier this year, Gov. Bev Perdue issued an executive order calling on all state employees to take 10 hours off, equivalent to a pay cut of a half of one percent.

While many of the state’s employees cashed in the furlough for a longer-than-usual July Fourth weekend, for teaching faculty in the university system, the furloughs have had a longer shelf life.

Western Carolina University’s staff and administrative employees all took the equivalent of a 10-hour furlough over the July Fourth weekend, but the teaching faculty returned this fall to learn that they would have to take their furloughs over the course of the current semester.

Rather than micromanaging faculty members with irregular office hours and teaching schedules, the university provost’s office, which directs academic affairs, decided to leave it up to the college deans how to handle the furlough — with the stipulation that it should in no way affect the instruction of students.

Dr. Richard Beam, Chair of WCU’s faculty senate, said his department has instructed faculty to record their 10 hours of leave over the course of the semester and to take it at times convenient to them. Beam said the policy is working fine, but it’s not really a true furlough.

“Most faculty have accepted the situation. We’re only talking about 10 hours spread over a 15-week semester,” Beam said. “We’re talking about maybe one hour a week that can legitimately be called furlough time. I suppose it’s possible that some faculty are playing up the issue, but I’m certainly not hearing it’s an issue for the majority.”

Beam said the faculty has essentially treated the furlough as a pay cut and gotten on with their teaching.

“My impression is that most faculty are pretty much doing what I’m doing which is ignoring it,” Beam said. “We got a pay cut, and we’re living with it.”

Dr. Beverly Collins, who serves on the faculty senate and as a delegate to the UNC Faculty Assembly, said the implementation of the furloughs has been confusing but hasn’t disrupted teaching schedules.

“I think faculty now are confused about what the flexible furlough program means for them,” Collins said. “Most faculty members I have talked with simply are continuing to teach classes, attend meetings, and mentor students as usual.”

Local libraries report that more people are streaming through their doors as a direct result of the recession. Area residents are increasingly heading to the library rather than doling out dollars for books, CDs and DVDs, as well as newspapers, magazines and Internet subscriptions.

“They look for the free option,” said Jeff Delfield, librarian at the Marianna Black Library in Bryson City. “Why buy a brand new John Grisham book for $25 to $30 when they have it for free at the library?”

Libraries have also seen more attendance at workshops on topics that are especially relevant during a recession, such as tips on writing an effective resume or searching for jobs online.

The Marianna Black Library’s latest statistics show a 12 percent increase in door count and a 20 percent increase in total program attendance in July and August, compared to figures from the same period in 2008.

Employees at the Marianna Black Library were delighted to see a record 466 people walk in on a single day in July. A week later, the newly instituted record was broken again with 476 visitors in just one day.

Dan Sikorra, a Bryson city resident and realtor, is one frequent visitor to the Marianna Black library. Sikorra said he visits the library two or three times a week to catch up on latest news in The Wall Street Journal, as well as other periodicals and magazines.

Sikorra has always enjoyed making the walk over to the library from his office to get a much-needed break, but with the weak economy, Sikorra said he is finding himself at the library more than ever.

“Before, I used to not be able to leave the office,” said Sikorra.

Though some librarians might be happy to see more people like Sikorra coming in simply because of a passion for their calling, there is definitely a downside to libraries’ success.

“It’s a higher burden on the staff,” said Delfield.

While for-profit businesses can add on more employees with an increase in clientele, libraries just have to make do with the staff they already have.

Thankfully, Swain County commissioners did not cut the library’s budget this year, but they did not provide the library an increase to accommodate its growing number of patrons either.

Libraries across the Fontana Regional Library System — which represents Jackson, Macon and Swain counties — have seen their door counts and circulation increase in the past year.

The total number of people visiting those libraries is up about 6 percent from the previous year, while 12 percent more items were checked out this year.

“We’re glad that people are using the library. It’s a good value for taxpayers,” said Karen Wallace, director for the Fontana Regional Library system.

Robert Busko, library director for Haywood County Public Library, said libraries in that county have yet to monitor door counts; however, there are noticeable signs of a rise in clientele.

“Our computers are used virtually the entire time we’re open in all our branches,” said Busko. “Parking is a continued problem for us. We are much busier than we have been.”

Busko said Haywood libraries are doing their part to help ease the effects of the recession.

“We changed the circulation period from two weeks to three weeks,” said Busko. The change was made partly to allow patrons to save on gas and ironically, make fewer trips to the library.

The recession has finally caught up with Swain County.

While other counties began bracing for declining revenues in late 2008, Swain County has only just begun to tackle a $1 million shortfall eating its way through the county budget. Swain County is working to plug the hole, but failure to take action sooner has caused the county’s fund balance to dip below the state’s benchmark for sound fiscal footing.

The Local Government Commission recommends counties maintain a cushion of 8 percent of their annual budget — essentially one month’s operating expenses to guard against a cash flow crisis. Swain County has dipped to less than 7 percent, however, according to preliminary audit figures for the 2008-2009 fiscal year ending June 30.

This will trigger budget oversight by the N.C. Department of Revenue until the situation is corrected.

County Manager Kevin King said the county has already figured out how to make up the shortfall and implemented a plan.

“In my opinion, there is not going to be any problem in turning this thing around,” King said. “It is not as dire as everybody is painting.”

King said he wasn’t oblivious to the mounting shortfall and has known since the spring that the county would dip below the 8 percent benchmark.

“We looked at doing furloughs in February and decided not to,” King said. “At that time the economy was getting ready to turn around, or so they said.”

Commissioners were reluctant to cut pay for county employees, who haven’t seen a raise in three years, he said.

“We just didn’t feel like we wanted to do a furlough to employees. They wanted to wait it out and see what would actually happen,” King said.

King emphasized that the county is not facing a deficit. It is merely a matter of its savings account being too low.

“It means you have less cash flow,” King said.

Root cause

King points to several factors playing into the shortfall, blaming the sheriff’s office and jail as the primary culprits (see related article).

Property tax collections were down by about $195,000 over last year, as the recession made it more difficult for residents to pay their tax bills.

Another cause of the shortfall is a convoluted state formula that swapped out the county’s Medicaid costs for sales tax revenue. The state agreed two years ago to take the burden of Medicaid off the county, but along with it, the state would keep some of the sales tax revenue that previously went to counties. While Swain will eventually be better off divesting itself of Medicaid even if it means losing a sliver of sales tax revenue in exchange, the switch was only partially phased in this year and the result was a net loss to the budget.

“There are all kinds of weird things in that formula,” King said. “We didn’t come out on the good side of it.”

Making up the difference

The county has already cut half a million from its budget compared to the previous fiscal year. The cost saving measures went into effect with passage of the new budget July 1.

The county cut eight jobs: five in the sheriff’s office and jail and three from other departments. The county also froze overtime.

With half a million in savings already penciled in, that leaves another half million the county needs to come up with. King recommended a five-day furlough without pay for the county’s nearly 200 employees, netting $100,000 in savings. County government will shut down on Oct. 30, Nov. 10, Dec. 23, Dec. 31 and Jan. 19. Offices that can’t simply shut down for a whole day will work out the furloughs amongst the staff. Emergency workers who can’t take off at all will simply see a pay cut. The sheriff’s office is exempt and will see neither furloughs nor pay cuts.

King is going to take another $100,000 out of a capital reserve account used for school maintenance and construction. The reserve account has accumulated a surplus, thanks to a little being squirreled away every year to pay for future school construction.

In a lucky break, the county will be getting an extra $150,000 in taxes this year from Tennessee Valley Authority for Fontana Dam, which King factored in to help cover the shortfall.

That still leaves $150,000 to finish plugging the hole. King doesn’t have a specific plan to get there other than across-the-board penny pinching.

“We are basically going to stop spending as much as possible,” King said. A hiring freeze on vacant positions is also in effect.

Day late and dollar short

Other counties anticipated fallout from the recession and began taking steps much sooner.

In Haywood County, leaders implemented a hiring freeze in the late summer of 2008. By fall, department heads were asked to trim 1 percent off the top of their budgets. By spring, department heads were searching for a 7 percent cut, a move that spawned furloughs and 36-hour work weeks. Haywood County also cut all contributions to nonprofits over the winter, a suspension in funding that has continued into the current fiscal year. Finally, the county increased property taxes and permanently eliminated 35 positions, many of which were already vacant due to attrition, however.

In Macon County, leaders began grappling with a projected $1.4 million budget shortfall over the winter as well. County commissioners put the onus on department heads to trim their own budgets in hopes of avoiding cuts to employees. A hiring freeze was enacted, but the lion’s share of savings came from suspending purchases and delaying maintenance.

Amy Street thought she could finally afford health insurance this year. But that was before Street’s employer slashed 25 hours from her 40-hour work week.

Street, a 62-year old Waynesville resident, recently applied for retirement and social security benefits, but said while that would help, it’s simply not enough.

When Street was recently told she might have kidney cancer, she fretted about more than her health. She worried she would lose her car and her home trying to scrape up enough money to pay for expensive treatment. Even worse for Street was the possibility of no one being around to care for her disabled daughter.

“I was in shock. Sometimes, I cried. Sometimes, I said wait and see,” said Street.

Luckily, Street learned she did not have cancer, but her continuing kidney problems have driven her to seek on-going care at the Good Samaritan Clinic of Haywood County, one of the few free clinics in Western North Carolina. While she waited for her appointment on a recent afternoon, a fellow patient who did not want to be named said she found out she had cancer just the day before.

Patients like Street represent almost 19 percent of Haywood County residents who are uninsured, a figure that includes 1,400 children.

While the number who can’t afford health insurance is on the rise, free clinics like the Good Samaritan are facing economic woes of their own due to funding cuts, forcing them to scale back services at a time they are needed most.

The Good Samaritan Clinic, which has offices in Waynesville and Canton, has reduced services by 40 percent and is no longer accepting new patients, who once came in droves of 40 each week.

The clinic had 4,500 patient visits last year, but can only afford to see 2,590 this year due to financial constraints.

Haywood County cut half of its funding to the clinic last year and ceased its funding completely this year, although it still allows the clinic to use one of its buildings for just $1 a year.

Donda Bennett, executive director of the clinic, said there’s little the clinic can do but step up fundraising efforts.

“Our budget is cut and dry, as bare as you can make it,” Bennett said. “There’s nowhere to cut it and still provide quality health care.”

No free ride

At a time of increasing need, free clinics across the area have had to turn away patients.

“We’re seeing a huge number of new patients coming to the clinic. People that have either lost their job or lost their insurance or both,” said Jerry Hermanson, executive director of the Community Care Clinic of Highlands-Cashier. Patients there are now waiting as long as three weeks for their appointment, and though the clinic does allow walk-ins, it has had to send away patients “more and more,” Hermanson said.

Haywood County’s Health Department, which sees 1,000 mostly uninsured, Medicare and Medicaid patients each month, no longer offers clinic hours on Tuesdays and Thursdays and has eliminated five positions. The department’s budget has decreased to almost $4.9 million, compared to about $5.7 million last year.

While government support is important to free clinics, contributions from individuals are just as vital. The Community Care Clinic of Highlands-Cashier has seen donations from individuals fall 20 percent below what was budgeted this year.

The Good Samaritan Clinic of Haywood County is reaching out to individuals and local churches but is still below target.

“A lot of people just think, we’ve been around since 1999, so surely we’ve figured it out and are able to support ourselves,” said Bennett. “Some people might not just realize it totally depends on individuals and organizations.”

While securing grants would certainly help, these types of clinics face tough competition.

“Most grantors want to fund something new and innovative and fun,” said Bennett. But when free clinics can’t even afford basic operational costs, it’s hard to pursue creative projects like the ones that attract potential grantors

Becky Olson, executive director of the Good Samaritan Clinic of Jackson County, also acknowledged that securing grants has been a bigger struggle this year with less money and more competition.

“At this moment, I’m working on four different grants to get a little piece for here, a little piece for there,” she said. The clinic is also trying to get more doctors to volunteer to expand the clinic and accommodate the increase in demand for services.

Meanwhile, the Community Foundation of Western Carolina has recognized the needs of clinics like Good Samaritan and the Community Care Clinic, and provided assistance through its Recession Response grants.

And the Good Samaritan Clinic of Haywood County is receiving help from churches that have stepped up and added the clinic to their budgets.

Dalton’s Christian Bookstore in Waynesville is teaming up with the clinic for nearly three months, to offer customers an opportunity to donate to the clinic, while the clinic will go in and do blood pressure checks on customers.

Good Samaritan continues to give presentations to a lot of churches to hopefully raise awareness about the clinic’s existence, as well as its troubles.

Turning to the big guys

Good Samaritan has been in talks with Haywood Regional Medical Center for two months now to see if the hospital can contribute financially to the clinic, as well as donate medical and office supplies.

HRMC already donates thousands of dollars annually in free laboratory and radiological services to the clinic each year.

“The hospital really realizes that we are struggling right now. By us cutting services, it puts them in a situation where they have to see more people who are uninsured,” said Bennett.

For every patient who does not pay up for an emergency room visit, it costs the hospital an average of $400, according to Good Samaritan’s research.

Carole Larivee, a retired nurse who works part-time at HRMC and volunteers at Good Samaritan, said helping the clinic would be beneficial for the whole community.

“The hospitals can’t turn people away who come to the ER. By the time they get to the ER, treatment is very, very expensive because they had to wait so long,” Larivee said. “Even before I was with Good Samaritan, I would see people admitted to the hospital because they couldn’t go to the doctor for preventative care. They had to get very, very sick.”

By the time the patient got to the ER, it would sometimes be too late, she said. “Whereas, if they had been seen regularly, what was wrong with them could have been treatable.”

Hermanson said about 10 to 12 percent of patients at Community Care Clinic would go to the emergency room if the clinic were not open. But most of the patients he sees at the clinic do not say they would have rushed to the nearest hospital.

“We ask every patient on every visit, ‘If we weren’t here, where would you have gone?’” Hermanson said. “The vast majority of patients say we wouldn’t have sought treatment.”

Catch-22 for the underserved

Carmine Rocco, health director at Haywood County Health Department, emphasized the need for the public to do their best to stay healthy, especially now.

“As more folks become uninsured, it’s even more crucial now that people do what they can personally to help reduce the risk factors that they have control over,” said Rocco.

The underlying issue, though, is that uninsured people who face a chronic condition have trouble managing what would be easy to handle — if they could afford care.

“Most people don’t worry about prevention if they feel well,” said Hermanson. “They may be diabetic and not treating it. Promoting wellness is a great thing, but getting it accomplished is another.”

Hermanson said one of the first patients at his clinic came in with a blood sugar level of more than 500, when 105 is the highest end of normal.

“It’s people like that who end up in the emergency room,” he said.

Street confirmed that it has been difficult for her to stay healthy without insurance.

“It’s really frustrating because you want to be ahead of the game to keep yourself healthy, but you can’t afford to do that,” she said. “It’s disheartening.

Even when patients get in through the door at swamped clinics, some have concerns about the quality of care.

Cynthia Teesateski, 49, said she worried that health care available to the uninsured might not stand alongside the care offered to patients backed by insurance companies.

Street said the urologist she was referred to did not fully inform her about her kidney troubles. It was only after she hunted down information on the Internet that she discovered more about her condition and decided to schedule another appointment at Good Samaritan.

Even if she wonders sometimes about the care she receives at clinics, Teesateski said she glad to have someplace to go to – for now. “As I get older, what’s going to happen? Will I have any place to go?” she asked.

Donna Brooks, a 46-year old patient at Good Samaritan in Canton, said she doesn’t worry about the care she receives at the clinic she refers to as her “lifesaver.” She has even become good friends with her doctor there.

Brooks is an avid supporter of the clinic and hopes it will make it through the recession.

“There should be no reason for these clinics not to stay open,” Brooks said. “If they don’t, not only me, but hundreds of people, are going to be in a world of hell.”