MSIEDC should operate more publicly before receiving more public funds

“The public has a right to know how their tax funds are being used. If the EDC does not want to be subject to such provisions, the EDC ought to keep its hands out of the public coffers.” (Cabarrus County Commissioner in 2006)

Not to change the subject, but the Mooresville Downtown Commission isn’t the only “outside agency” asking the Town of Mooresville for public funding this year.

The Mooresville-South Iredell Economic Development Corporation (MSIEDC) wants $100,000.

Last year, the MSIEDC happily skipped away with $95,000 in public funds from the town. Then in January, the organization asked its executive director, Melanie O’Connell Underwood, to resign. In the following days, the Charlotte Observer apparently asked the MSIEDC for Underwood's salary. And in turn, the MSIEDC turned up its nose to the press and the people, basically saying that how it chooses to spend our money is none of our business. In fact, Sara Haire Tice, chair of the MSIEDC board of directors, was quoted in newspapers saying: “we … will not allow our internal business decisions, especially those involving the livelihoods of our employees, to become topics of public debate and display.”

The MSIEDC, since it is a “public-private” entity, does not technically have to disclose its financial information ... despite the fact that it’s funded in large part by tax dollars.

But that could soon change.

The Town of Mooresville has not yet voted on the MSIEDC’s funding for the upcoming fiscal year. And four town commissioners – Thurman Houston, Mac Herring, Miles Atkins and Chris Carney – said this week that they’d like to see the MSIEDC operate more publicly. The other two commissioners – Mitch Abraham and Frank Rader – disagree. (Actually, I can’t say with certainty that Rader disagrees. He told me in December 2006, when I was freelancing for the Tribune, that the MSIEDC should not operate publicly. But he did not respond to several Report e-mails in the last few days, asking if he stands by his 2006 comments.)

Commissioner Thurman Houston, however, said on Monday: “Personally, I would like to see that their financial statement was public record.” However, he added, “As a commissioner, I would need a few questions answered” first.

And that’s understandable. Most would agree that some aspects of economic development should remain confidential … but only for a limited period of time. But, as Commissioner Mac Herring put it, some “happy medium” should be reached so the MSIEDC can maintain the confidentiality of the businesses it’s trying to recruit to southern Iredell and the public can know how its money is being spent.

Commissioner Miles Atkins said this week: “I would expect there to be oversight and accountability for any organization that receives public funding.” The MSIEDC, Atkins said, “should be accountable for those tax dollars by operating publicly, and I would add that as a stipulation to their funding this year.”

Atkins was sworn into office in December 2007 – one month before Underwood was asked to resign. “You may be surprised to learn that since taking office in December, and with the termination of the executive director shortly thereafter, the MSIEDC has not officially communicated with the town board, to my knowledge, as to what their intentions are and where they are headed,” Atkins said.

So it sounds as though at least one town commissioner is as much in the dark as the taxpayers … which is indeed surprising, considering the mayor is also the secretary of the MSIEDC board.

Commissioner Chris Carney said in December 2006, and reaffirmed this week, that he believes the MSIEDC should operate more publicly. “(The MSIEDC) is using public money,” he said. “We understand the need for closed-session meetings when conducting deals, but after the deals are done, the information should be made public.

“I would want to see a happy medium between making sure public funds are being used appropriately, providing some openness, but not taking away from the competitiveness of the economic development group,” Carney added.

In FY2006, the Town of Mooresville and Iredell County approved a combined total of $201,180 specifically for economic development purposes. In FY2007, the MSIEDC – which reportedly has an annual income of $415,550 – received $209,230 in public funds, including $95,000 from the Town of Mooresville and $114,230 from Iredell County.

This year, the MSIEDC is asking for $100,000 from the Town of Mooresville and, according to newspaper reports, $117,000 from Iredell County. All public contributions are sent directly to the MSIEDC.

Despite those public contributions, two town commissioners – Mitch Abraham and Frank Rader – said in December 2006 that they do not believe the MSIEDC should operate publicly.

Abraham, in an e-mail to the Report on Monday, said he stands by his 2006 statements. “To my knowledge the MSIEDC is not a public body and confidentiality is a must,” he wrote.

Though Rader did not respond to this week’s e-mails, he said in December 2006 that “economic development with the town board is closed session with minutes sealed until fruition or not. Until economic development gets to the town board as a deal, the talk/negotiation and name of parties should stay very close to the vest. Otherwise, there will be no deal.”

Making the MSIEDC adhere to the public laws, Rader said in 2006, “would invert the effectiveness of our economic development, to the delight of every competitor in North Carolina and out. We compete with the nation and the world for economic development and need to build our deals quickly and quietly.”

Added Abraham at that time: “We did not make a stipulation that the new MSIEDC run by the open meetings act. It was not a discussion that was brought up in any meeting I attended.”

Carney said that was a mistake that the town board made. “We should have requested that at times when appropriate, the information should be made public. We did not discuss that. That’s our mistake, and it’s something we should keep in mind for next year’s request.”

The request wasn’t made that particular year, but Carney said this week he feels the same now as he did then. “I appreciate you bringing this back up,” he said, adding that he will address the topic when the town discusses the MSIEDC’s funding. It’s unclear exactly when that will happen.

“Anybody who receives public funding should be accountable,” Carney said Monday.

And contrary to what some might say, the arrangement can be carried out successfully. For example, Cabarrus County’s Economic Development Corporation (CEcD) was reorganized in August 2004. And as a stipulation of public funding, Cabarrus County included in its contract with the CEcD the requirement to adhere to the state’s public records and open meetings laws.

“All meeting minutes, annual audits, etc. are available for public review,” said CEcD Executive Director Ryan McDaniels in December 2006. Additionally, he said, “In our contract with Cabarrus County, it states that we follow the N.C. open meetings law.”

However, he added, “We do go into closed session in accordance with (N.C. General Statute) 143-318.11. This allows us to discuss confidentially businesses that may be looking to move or expand in Cabarrus County.”

McDaniels said in 2006 that the CEdC’s total annual budget is $734,000, with $553,000 of that being from municipalities’ public money. Private contributions account for approximately $181,000 of the CEcD’s annual budget, he added.

“With this amount of money,” said one Cabarrus County Commissioner, “the EDC (economic development corporation) ought to comply with the state’s public records and open meetings laws.

“The public has a right to know how their tax funds are being used. If the EDC does not want to be subject to such provisions, the EDC ought to keep its hands out of the public coffers.”

To the contrary, Mooresville’s Abraham said in 2006, and reaffirmed this week, that while he is “100 percent for our compliance to the open meetings and public records act,” he is opposed to adding a stipulation to the MSIEDC’s public funding that would require the organization to adhere to the public records and open meetings laws.

“Many economic development contacts need confidentiality for many reasons,” Abraham said. “I believe in this system. Its past accomplishments in Mooresville-South Iredell are very apparent and monumentally successful. Why change a system that has this type of success?”

Rader agreed. “Mooresville has very effective, efficient, productive and envied economic development program which the Town of Mooresville trusts and supports,” he said in 2006.

Added Abraham: “The Chamber and Melanie (O’Connell Underwood) have operated with great integrity and confidentiality in the past.” That’s why, he said, “no one brought up the notion of the open meetings rules.”