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August 1, 2012

Mayor's plea falls on deaf ears

TARBORO — RALEIGH – Despite an uncompelling plea from Mayor Priscilla Everette-Oates, the Local Government Commission impounded the Town of Princeville’s books and took control of its financial affairs here Monday during a special meeting. The vote was unanimous.

It is just the fifth time since the 1930s that the state has assumed control of a North Carolina town’s finances — and is the second time for Princeville. The first takeover was in 1997 when LGC took the books from the administration of the late Mayor Walter Plemmer. The books were returned in 1998.  

The decision means Princeville's elected officials and town staff will not have any involvement with the town finances for an indefinite period. Three LGC staff members will manage the town’s day-to-day financial affairs and the commission also adopted an interim budget produced by its staff for the month of August.

Everette-Oates and commissioners Calvin Sherrod and Isabelle Purvis-Andrews were opposed to the LGC takeover, while commissioners Gwen Knight and Ann Howell supported the move. All five commissioners were given an opportunity to make a presentation to the LGC.

Howell and Knight both pointed out the division that dominates the board and pleaded for the agency to take over the books.

"My joy is on the rise and right now, my only desire is that I know that we are going to get a competent staff in our town hall shortly,” Howell said. “I'm leaving Raleigh quite happy today. I know that the citizens will be happy."

Before the LGC voted, Everette-Oates pleaded that the LGC consider giving the town more time to work on its problems.

"I don’t think the town needs to be taken," she said, addressing the commission. "I think that we should have more time to approve an operating interim budget tonight and give us until Aug. 31 to work on any other issues. (Our) accountant has lowered the taxes and the water and sewer (rates are) lower (in the proposed 2012-2013 budget). There’s no need to take over the town."

The takeover came 20 days after the commission first gave Princeville 14 days to improve its financial affairs, which left the town operating in the red and near default on a state loan. LGC's T. Vance Holloman, deputy treasurer of the N.C. Department of Treasurer, made the recommendation.

 Everette-Oates was apparently notified of Holloman's recommendation on July 27.

  "Today we're requesting that LGC take action to impound the books and records and take control of the finances of the Town of Princeville," Holloman said.  "... We feel without changes and without modification of the operation and the policies of the Town of Princeville, they will, in fact, default on debt that they have outstanding. In addition, we have found numerous of statutory violations in the operation of the town."

Holloman also said on several different occasions, the town current staff has a "lack of understanding" concerning the town's financial operation. Princeville fired former town manager Victor Marrow, who was also the town's finance director, in February. Following a split vote, the board hired Maggie Boyd as the interim town manager and Purvis-Andrews as the finance officer. Neither had any previous work experience in municipal operations or finance.

During that same period, an audit revealed the town finances were in dire straits. From that point until recently, LGC sent the town numerous letters expressing concern about the town's finances and operation. The tone of the letters was progressively serious.

One of the letters, issued on July 10 and in the form of a warning, stated the commission would impound the town's books if Princeville did not produce an adequate action plan that would result in the improvement of the town's finances and its water and sewer operation.

In an effort to ward off the takeover, the mayor scrambled for solutions to appease the LGC — including sending the agency a proposed 2012-2013 budget that included rate decreases. However, her proposals fell on deaf ears.

During her plea, Everette-Oates attacked Holloman personally, claiming he blind-sided her with the 14-day notice as well as the takeover. She said Holloman had been working with the town and gave no impression that neither one of the situations would occur.

After the meeting, she attacked Holloman again by calling him a "liar" and told him she didn't want him any where around her. Holloman attempted to give the mayor what appeared to be an envelope pertaining to the LGC order, but Everette-Oates refused to take it.

Purvis-Andrews also attacked Holloman's professionalism.    

"Vance was very inconsistent the entire time he was in," she told the LGC. "He tells us one thing and he does another."

Despite the bashing Holloman received, he said he didn't hold animosity towards Princeville's elected officials.

"This is something the commission staff and certainly the commission doesn't want to see happen," he said. "We would like to see the town manage their own business. We hold no grudges or animosity due to remarks made today.

"This not an indictment against the town or the citizens of the town. We’re doing this to help the town recover and helping the citizens of this town. We are very anxious to help the citizens of the town."

Secretary of State Elaine Marshall, who is a member of the LGC, didn't second-guess her vote.

"I think the town needs to have the help of the LGC on a temporary bases to make sure it gets back on the right kind of financial footing," she said. "Our job in this as local government commission is to make sure that the bond rating for North Carolina towns and counties stay at its absolute lowest possible amount. And when we have towns or counties that are on the verge of defaulting or close to defaulting, that has an effect on every one on 9.6 million people in North Carolina. Our obligations are to a lot of people and, in particular, to the folks of Princeville, to make sure that they have a financially healthy town."

The last time LGC took over the books of a government organization was in 2003 with the South Brunswick Water & Sewage Authority.

The town's monthly meeting, which had been rescheduled for Monday night in order to hold a public hearing on the proposed budget, was postponed.

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