By Debbie Hall
Less than three months into a new fiscal year, Patrick County intends to borrow up to $3.5 million to pay bills and meet its payroll.
Repayments to the Tobacco Region Revitalization Commission were said to be part of the culprit in the county’s current financial dilemma.
The county and the Patrick County Economic Development Authority (EDA) approved a total incentive of $1,250,000 million to a company that planned to locate in Patrick, create jobs and grow the tax base. The loan was made between January 15 and September 12, 2013, according to court records.
A portion of the funds ($675,000) were from the commission, and included a claw back in case the company failed to meet certain benchmarks in terms of job creation or capital investment.
The company did not locate in Patrick, and the locality was required to repay the funds to the commission.
Budget records indicate the debt was satisfied in 2017.
According to records from the EDA, the county’s debt to the commission was paid in four installments of $168,750 starting on Sept. 23, 2014, with payments Oct. 1, 2015; Sept. 21, 2016 and the final payment made on Sept. 6, 2017.
The county paid all of the initial repayment; the county and EDA split the remaining payments, with each paying $84,375. The EDA also has taken legal action to recoup more than $1.7 million loan repayments and other costs in an alleged breach of contract suit filed in 2017.
“It was a secured loan,” said Lock Boyce, chairman. “I was led to believe we would get this money back.”
“We’re trying,” County Administrator Tom Rose said.
The project “really looked like a winner and we did have attorneys and we did do due diligence.” The company just needed it to cover their cash flow problems. Can this be handled, yeah, this can be handled. I don’t think we need to be pessimistic about the whole situation.
“We had to build a new jail. The schools had been neglected and we were really running into trouble with our state and federal funding because our schools were not up to standards. … Somehow we fell out of control,” Boyce said.
Crystal Harris, of the Smith River District, said the failed project marked “the first one that I’ve ever known that we’ve ever lost money on” and that she had said early on “we’ll all take a bow or we’ll all have egg on our face.”
Sarah Jordan said she was disappointed with the board.
“You said you all are sitting here with egg on your face for $1.5 million. No you’re not.” Rather, Jordan said county residents/taxpayers are those paying the debt because the county may have to raise taxes to pay its debts. She expressed concerns about the responsibility being imposed on those on fixed incomes, seniors who must choose between food and medicine.
She said the county administrator should have known. “I’m sorry, you should know what the budget is,” Jordan said. “You should know what our bills are or if you’re approving it, you’re guilty. You’re all guilty. This county is going to die. We might as well write up the obituary…. the people of this county deserve better.”
Ricky Fulcher, of the Peters Creek District, said the financial situation is not “any one person’s fault.” He noted the board is trying to juggle the additional demand for services from residents as well as state/federal mandates the county is required to pay.
“We’ve allowed ourselves to not move forward as a fear of change. We need to implement a revenue plan while growing our overall tax base,” he said, and added residents must support the board and additional revenue opportunities such as the meals tax and liquor by the drink.
“Tom, I would like to see you more involved in that, getting us an actual cash flow and getting something in a simplified format that’s easier to understand,” Fulcher said. “Guys, we need to step up and get something in place that’s going to make this work. I hope and I pray every day for this county.”
Jane Scales Fulk, of the Dan River District, was not on the board when the project was approved.