August 09, 2012Tuesday night, August 7, the Greensboro City Council may have opened the curtain on the final act of a truly strange series of events involving Guilford County and the bizarro world of Guilford County Manager Brenda Jones Fox.
The City Council voted unanimously to accept the agreement already approved by the Guilford County Board of Commissioners to divvy up the money left in the joint city-county water and sewer fund, thus ending an agreement between Greensboro and Guilford County on water and sewer extensions that dates back to 1968 and was originally signed by former Mayor Carson Bain. Simply reading the contract is like taking a walk back through time, since it was renewed and signed by the mayors and chairmen of the Guilford County Board of Commissioners for over 40 years.
It all came to an end, of course, because nobody, with the notable exception of Chairman of the Board of Commissioners Skip Alston, can work with Fox.
One of the first things Mayor Robbie Perkins did after being sworn in as mayor was go to a meeting of the Board of Commissioners and make a deal to get Greensboro its money. The deal in Perkins' eyes is a great deal for Greensboro. It can certainly be argued that it is not necessarily a great deal for Greensboro, but it is a great deal for Perkins, who is in the commercial real estate business.
Still, it is a deal. The solution the previous council had discussed was to file suit against Guilford County, but that was back during the period where Fox simply refused to tell Greensboro how much was in the fund.
It is a joint fund. For some reason Guilford County got to hold the money, but the contract unambiguously stated that the money was jointly held, and when the contract was terminated Guilford County and Greensboro each received half.
Greensboro for over a year just wanted to know how much that half was. When he was Greensboro city manager, Rashad Young said he had been told there was about $14 million in the fund and said he was shocked to later be told that it was closer to $20 million. It turns out there was $27.5 million in the fund. It also turns out that the county had apparently been taking the interest on the fund and diverting that to the Guilford County account. In other words, the county was stealing from the city, except that the contract did not specifically state that the interest from the money in the joint fund would remain in the joint fund. It seems to be a given, but that is why good contracts are so long and boring.
Fox refused to authorize an audit of the fund because she said there was nothing in the contract about paying for an audit, even though the audit was agreed to by both Greensboro and Guilford County. Young, on behalf of Greensboro, agreed to pay for the audit at a cost of about $15,000.
Then the problem was getting access to the financial information in order to perform an audit. As late as November 2011, shortly before Young left for his new job in Alexandria, Virginia, he said he did not know how much money was in the fund. And even though the county had supplied the city with over 1,000 pages of information about the fund, the data to figure out what was in the fund was not available.
Shortly after The Rhino Times reported that the city still did not know how much was in the fund, Fox provided that information to the city, but it appears that information was not correct.
Guilford County also wanted Greensboro to pay for projects that Greensboro had not approved. Even Fox agreed that these projects had not been approved by Greensboro. The deal with spending money from the joint water and sewer fund was that both the Greensboro City Council and the Guilford County Board of Commissioners had to formally approve the appropriation before money out of the fund could be spent. What the Greensboro City Council discovered is that process was not being followed and Guilford County would get tacit approval from the city manager, city staff, one councilmember, a citizen walking down the street, or maybe approval would come to them in a dream. In short, they were spending money on projects that did not go through the formal approval process and now that the fund was being dissolved the county wanted the city to agree to pay for these projects.
Until Perkins became mayor the city and county were at an impasse. The city had voted to dissolve the contract in June 2010; the contract officially ended on Jan. 1, 2011. Greensboro was finally told how much money was in the fund in November 2011. But the city didn't want to pay for projects that it had not approved and also wanted the interest money that it was due. The audit showed that the county had accounted for the interest money since 2007 but had no records of interest before 2007. At one point the county had claimed that the $27.5 million was in a non-interest bearing account.
At another point in the negotiations, if they can be called that, Young showed up at Fox's office with the city attorney and city finance officer for a scheduled meeting to go over how the money should be handled. Fox had a simple solution; she refused to meet with them. She did speak to them briefly but said that since the county attorney was not present she couldn't meet.
Perkins was sworn into office on Dec. 6, 2011, and on Jan. 10, 2012 he was pitching a plan to the Guilford County commissioners. Perkins is in the commercial real estate business. Putting deals together and selling them is what he does for a living. This was just another deal for Perkins and, as in all deals, he did some give and take. Perkins agreed that money from the joint fund could be used for all the projects that Guilford County wanted to do, including the ones that Fox agreed the city had never approved, if the county would agree to put all the rest of the money into a project to extend water and sewer service along I-85/I-40 east of Greensboro.
The county agreed and Alston wanted the motion passed at its January meeting, but that didn't happen. Now it is August and the agreement to end the agreement has finally been passed by both bodies.
The deal is good for the county because the land that Perkins wants to extend water and sewer service to is in unincorporated Guilford County and, according to the current annexation laws, despite the fact that it will have city water and sewer the land will not be eligible for annexation for years. So if the 9,000 acres is developed as Perkins says that it will be, the county will reap benefits in increased property taxes, but the city will only benefit from increased water and sewer revenue. Water and sewer customers whose property is not in Greensboro are charged a little more than double the rates of customers who are in Greensboro.
Perkins notes that both the new American Express data centers are in this area and that – because of the roads, fiber optic network and electrical infrastructure – this is a prime location for development. He said everything was available except providing high tech industry a way to flush their toilets, and with this agreement the city should be providing that. That corridor has some of the most reliable electrical service in the country.
The end of the joint city-county water and sewer agreement should provide about $18 million for the project, but the numbers from Guilford County are far from reliable. What was $14 million became $27.5 million, so the $18 million could be $14 million or it could be $25 million. Even an audit probably wouldn't help.