Did Mayor operate outside state law?

“The definition of insanity is doing the same thing over and over again, expecting different results.” (Anonymous)

The South Iredell Community Development Corporation (SICDC) has paid its debt in full to the Town of Mooresville. All’s well that ends well.

Or is it?

Although we have extended sincere thanks to the SICDC for remedying this situation after it was exposed, we believe the mayor should not be let off the hook for his part in the matter.

Mayor Bill Thunberg – who also sits on the SICDC board of directors – single-handedly, and apparently without authorization from Mooresville commissioners, signed away the town’s collateral when he signed release deeds on two pieces of property that the SICDC sold earlier this year.

And it appears he may have acted outside of state law in doing so.

Town Attorney Steve Gambill recently stated in an e-mail to the Report: “State law does not address, nor lay out, the specific authority a mayor has. It seems to me that it would be a practical impossibility for the law to address each thing a mayor can do.”

And Gambill is right. But just because the law is silent about the mayor’s specific authorities does not mean that the mayor has a “free pass” to do whatever he wants, whenever he wants. In fact, state law very clearly spells out that the authority of the people is invested in the “body politic” – and in our case, that is Mooresville’s board of commissioners. Essentially, outside of breaking tied votes, the only power that the mayor has is that which our town commissioners expressly and deliberately grant him.

N.C. General Statute 160A-12 states: “All powers, functions, rights, privileges, and immunities of the corporation shall be exercised by the city council and carried into execution as provided by the charter or the general law. A power, function, right, privilege, or immunity that is conferred or imposed by charter or general law without directions or restrictions as to how it is to be exercised or performed shall be carried into execution as provided by ordinance or resolution of the city council.”

Bottom line: Neither state law nor the town charter clearly specifies the mayor’s authorities. And in the absence of those specifics, the “city council” (Mooresville’s board of commissioners) is obligated by state law to provide that power to the mayor “by ordinance or resolution.”

Yet, on behalf of the town earlier this year, and without the town board's authorization, Thunberg signed release deeds on two pieces of property that the SICDC sold in the Mooresville Business Park for a combined total of $1 million – despite the fact that at the time the SICDC owed the town more than $388,000 and had defaulted for two consecutive years on its repayment plan with the town. (See “SICDC defaults on payments to town,” April 10.)

Because the mayor – who we would certainly assume was aware of the SICDC’s debt and default – signed the release deeds, the town could not foreclose on those two specific properties and sell them to secure the money that the SICDC owed, in the event that the organization refused to pay the town.

An agreement forged between the SICDC and the Town of Mooresville in 2002 (which was unanimously approved by the town board at that time) stipulated that the SICDC would pay the town 10 percent of its outstanding balance each year and half of all proceeds from land sales in the Mooresville Business Park on Mazeppa Road until the debt was paid in full. But before the town received a check last week, the SICDC was not only two years behind on its annual payment, it had also not paid the town any portion of the $1 million it had made from the two land sales earlier this year.

Thunberg’s signing of the release deeds put the Town of Mooresville in an extremely vulnerable position. And while the town did eventually receive a final payment from the SICDC, our mayor’s actions have raised serious and fundamental questions about the democratic process in our town – such as who holds the power and who has true authority over the public’s business and our assets.

The short answer is that the people hold the power through our six elected commissioners, and our mayor did not have the authority to sign those release deeds because our commissioners had not granted him express permission to do so.

But at least two town officials say the way the situation was handled is acceptable, simply because that’s the way it’s always been done.

“In the nine years I’ve been here, the Mayor has always signed release deeds,” said Town Clerk Janet Pope when asked by the Report to produce any and all documentation showing that the town board had authorized the mayor to sign the release deeds.

Whether or not the mayor signs release deeds, however, was never the question – the question was whether he typically signs them with or without town board approval. But when asked that question, Pope did not respond.

Stated Gambill: "I believe the Mayor was acting as his predecessors had acted in an attempt to facilitate the closing of loans which would generate funds so that the Town could be paid.

"In these two instances," Gambill continued, "the town did not have advance notice of the closing dates in order to take them to the Board, and the release deeds were presented to the Mayor for signing so that the loans could close.

"All of this to say that sometimes a Mayor has to make a decision and act according to the circumstances," Gambill said. "Please note that I was aware of the release deeds and concurred with the ability of the Mayor to sign them so that funds could be generated from the sale of this property."

Gambill basically states that the mayor was acting in the best interest of Mooresville taxpayers by signing the release deeds to "generate funds so that the Town could be paid."

But the SICDC did not pay the town immediately after closing on the property. In fact, three months passed from the time the mayor signed the first release deed until the town was paid, and that payment arrived only after the matter was publicly exposed.

Why did the SICDC not send the town a payment as soon as the properties closed?

HUD-1 settlement statements, which are forms used to give borrowers and sellers a complete list of their incoming and outgoing funds for a real estate transaction, provide two separate lines for a seller to list any money it owes another bank/agency. If any debt is listed in those two lines (titled “Payoff of first Mortgage” and “Payoff of second Mortgage”), those banks/agencies will be cut a check at the real estate’s closing.

But according to the settlement statements provided to the Report by the SICDC last week, the SICDC did not disclose its debt to the Town of Mooresville on either settlement statement for the tracts of land sold earlier this year.

If Thunberg had the power to sign the release deeds, he also had the power not to. Because he has an obligation to protect the taxpayers of this town – and his position as mayor should have easily trumped that of an SICDC board member –Thunberg should have never signed a release deed without the SICDC paying its debt current or at least disclosing its debt on the settlement statements so that the town would have known that “the check's in the mail.”

Gambill also stated that the town “did not have advance notice of the closing dates in order to take them to the Board,” so “the release deeds were presented to the Mayor for signing so that the loans could close."

It is intellectually dishonest to insinuate that a sense of urgency existed and that the mayor was therefore justified in operating outside his powers. Why? Because closings don’t happen overnight. The SICDC failing to give adequate notice to the town should have been the SICDC’s problem – not the town’s. Mooresville’s town board can call a public meeting at any time of its choosing, as long as it gives the public a 48-hour notice of the meeting. In other words, the town board could have called a special meeting to grant the mayor the authority to sign the release deeds. And it would have taken only two days, from start to finish, to make that happen.

Further, we might be able to buy the “no-advance-notice” argument if it had only happened once. But Thunberg signed two release deeds – one on Jan. 18 and the other one more than one month later, on Feb. 27.

Reminds one of the old adage: Fool me once, shame on you. Fool me twice, shame on me.

Gambill also says that he “concurred with the ability of the Mayor to sign” the release deeds. But from the perspective of state law, Gambill is not the “body politic” any more than the mayor is, so Gambill’s concurrence with Thunberg’s actions is irrelevant. What is relevant is that it is incumbent upon the town attorney to ensure our elected officials adhere to the law.

At the end of the day, the mayor signed the release deeds without the consent or approval of elected commissioners because "that’s the way it’s always been done" in Mooresville. But just because it’s always been done that way does not make it right or lawful.

Furthermore, this isn't the way it's always been done in Mooresville. Take, for example, this very month’s town board meeting: our commissioners were asked to “authorize the mayor” to sign a document related to a real estate transaction. To be specific, and to quote the April town board agenda, commissioners were asked to “Consider adopting a resolution accepting the bid of $1,375,000 from LB Builders Construction Groups, Inc. for the Bandit Lane property and authorize the Mayor to sign the offer to purchase contract.”

Why did the mayor have to receive board authorization to sign documents related to that transaction, but not for the release deeds on the two tracts of land that the SICDC sold earlier this year?

The mayor does not and should not have the authority to sign anything he wants, anytime he wants. That is a slap in the face of the very democratic principles he was sworn to uphold. After all, this is a person who state law does not even allow to vote except in the event of a split vote by commissioners.

Immediate Calls for a Specific and Clearly Defined Policy
If, as Gambill admitted, state law “does not address, nor lay out, the specific authority a mayor has,” then the onus is on Mooresville’s town board to immediately develop and enact a policy that does. Commissioners have two choices: they can either establish a policy that gives the mayor carte blanche authority to sign documents at his pleasure, or they can require the mayor to receive town board authorization each and every time he signs a document on the town's behalf.

We should not, and will not, be satisfied with this particular story’s “happy ending,” because through it, we have learned that our business can apparently be conducted and carried out by one single person. And I do not care how benevolent that person is or believes s/he is, in our system of government it is not acceptable that s/he alone holds that much power.