Chowan County begins cuts before chief unveils plan

By Connie Sage

Correspondent

EDENTON, N.C.

The Chowan Arts Council will lose all of its nearly $20,000 in county funding. The Senior Center's exercise classes will cease today. When the new library opens next week, the county's allocation for books will be severely cut. Social Services has laid off six part-time or provisional personnel. Employees in some departments are working with the lights off.

Chowan County executives, bracing for what could be severe cuts in services and personnel, already are scaling back in advance of County Manager Peter Rascoe's proposals to pull the county out of its fiscal morass.

Chopping the library's book budget to $5,000 would have been "disastrous," said Kay Davis, director of the Pettigrew Regional Library, which includes Edenton's library.

However, the local library's advisory board has agreed to take about $22,000 out of its trust fund to make up the lost revenue for books, as well as pay for audio-visual materials and supplies.

While neither the library, nor the Arts Council, is a county department, each relies heavily on cash from the county.

The Chowan Arts Council won't get $19,500 that it had budgeted from the county, according to Executive Director Brenda Russell. The council, which still will receive $6,000 from the town, is ramping up its membership drive to bring in cash, Russell said.

On June 17, his first day on the job, Rascoe said he learned from Finance Manager Lisa Jones that the county had a serious cash flow problem. A reserve fund that had up to $29 million a decade ago was nearly depleted, leaving the county unable to pay its bills.

Rascoe called in the Local Government Commission, which said the county's cash flow issues were "serious" and had to be addressed to comply with the Local Budget and Fiscal Control Act. Failure to balance the budget could result in the fiscal watchdog agency taking over day-to-day operations of the county.

"The devil now is the cash flow challenge," Rascoe said Thursday.

"We're constantly having to address the lack of operating funds. Obviously, we're having to continue to cut costs and we are seeking to offset some debt payments and other financial obligations due in the fall," he said. "A lot of these extensions will be contingent on the budget being balanced."

A month ago, Rascoe asked department directors to pare 10 percent from their budgets. He also has asked local residents, especially businesses, to pay their taxes now instead of in January.

By Thursday, Rascoe said Charlie Creighton, chief executive of Colony Tire Corp., had paid tens of thousands of dollars in taxes, spurring nearly a half dozen other businesses and individuals to pay early.

Rascoe succeeded Cliff Cope-land as county manager on June 16. Rascoe had planned to take over on July 1 when Copeland retired. But after the 2008-09 budget was approved on June 16 - with no tax increase - Copeland sat down in the audience and a surprised Rascoe took charge.

Two months earlier, the county Board of Commissioners at a closed meeting had agreed to retain Copeland as a "special consultant" for about $10,000 a month after his retirement.

The commissioners, who said they were "blindsided" by the budget crisis, hired attorney John Morrison, senior partner of the Twiford Law Firm, which has offices in Elizabeth City and Moyock. Morrison also is the Camden County attorney and has held comparable positions or worked with Currituck, Pasquotank and Gates counties.

Following an executive session of the commissioners on Wednesday night, Morrison said that the county had severed all ties with Copeland.

To balance the current budget - which the Local Government Commission said had not happened for at least five years without using cash from reserve funds - Edenton and Chowan County residents now will pay more taxes, see a cut in services, or both, according to Rascoe.

Rascoe will present proposals to balance the budget to the Chowan County Board of Commissioners at 6 p.m. Monday. The meeting has been moved to Swain Auditorium to accommodate what is expected to be a big taxpayer turnout.