Commissioner: Board’s ‘mismanagement and lack of accountability’ led to economic development shake-up

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During an April meeting of the Brunswick County Economic Development Board of Directors, the board unanimously voted to move $50,000 from the county-funded economic development commission to the private economic development corporation, or “slush fund,” as one board member called it.

But that didn’t happen.

Instead, the board of directors voted on Tuesday to move to separate from the county after being given an ultimatum of sorts on how the county would allow the commission and its board of directors to proceed as an agency.

Read related story: Economic development commission to separate from county; director to retire

During the April 9 meeting, Diane McRainey, who has since resigned as the board’s treasurer and secretary, made a motion to “replenish” the corporation’s coffers from the commission’s account.

“We basically have $124,000 in…the commission account, and we used to–years ago–move any extra money at the end of the year to the corporation. That gave them some power to help with industries or trying to do some things that the commission, itself, can’t do.

“We used to do it every year. The only reason I was thinking about doing it now was to make the move in case the county came back and said anything–I don’t know that they review anything–we’d still have time to reverse it,” McRainey said.

The board hadn’t moved the money in Brunswick County Economic Development Director Jim Bradshaw’s eight-year tenure, and “now we’re up about 100 grand,” McRainey said.

When asked by another board member why the move was suggested, McRainey responded: “We can write checks differently on the corporation. The commission, it’s still considered county funds and…they can only be for a certain set of purposes.”

The commission is county-funded, while the corporation is funded by land sales, including acreage in Leland Industrial Park.

Commissioner’s response

Brunswick County Commissioner Randy Thompson said he became aware of the discussion from the April 9 meeting–which he considered a red flag about the board of directors and the agency–in early May.

“At our first commission meeting in May, we heard the audio,” Thompson said. “Following that meeting, we immediately requested that a meeting be set up with the executive leadership of the EDC, which occurred the latter part of the first week in May. It was shared with them what we had heard.”

Thompson also said they had difficulty receiving the requested information. After eventually receiving the requested information, including the April 9 meeting audio, “it was expressed to them, and I, personally, expressed my disappointment, with the discussion. It was unacceptable conduct.”

“I expressed a desire for [EDC leadership and board members] to accept responsibility and accountability and address the serious matter,” Thompson said. “On May 20, I did not feel like they had, so I sent a letter to my District 1 representative, Diane McRainey, and I told her that because of her actions related to the issue concerning the request for moving the money, and the descriptive language she used for the money [“slush fund”], and the fact that the newer members of the commission were told that this was something that had been done in the past–when, in reality, it had not been done–that she should resign.”

On May 28, McRainey wrote Thompson that she had resigned, Thompson said.

“I don’t think that we have resolved all the situations with this involved, as far as the [April 9] discussion went. The discussion talked about breaking [$50,000 transfer] into smaller increments, I don’t think that we have addressed it–with all of those involved as of yet–to hold those accountable.”

“It’s amazing to me what’s actually taken place,” Thompson said.

Next steps

County commissioners will have a joint meeting with EDC Board of Directors at 3 p.m. June 30, when they will discuss the economic development agency’s future.

Brunswick County Manager Ann Hardy gave the board of directors three options to move forward with the EDC’s future on Tuesday.

Hardy gave them the option to operate the EDC with the EDC managing all funding and operations, but with the county managing all financial transactions. Another option Hardy presented would have required Bradshaw and EDC commissioners to resign their posts so that the county could develop a county EDC that would report to the county manager and county commissioners.

Ultimately, the board accepted Hardy’s third option for the EDC to become “a truly separate organization” from the county government.

“The county would enter into a contract for services to support the organization,” Hardy’s proposal states. “The EDC would solicit funds to from other entities to assist with operations. ”

The EDC, which is currently housed in the Brunswick County Government Complex in Bolivia, would also have to find another location off-campus or reimburse the county “for space and services.” The foundation would also be required to become a non-public and separate entity from the EDC. EDC employees would cease to be county employees and the EDC would be responsible for salary and benefits of its employees, which currently is made up of a director, assistant director and economic development manager.

The new EDC structure will take effect Oct. 1, when director Bradshaw retires.

“I think whatever all the activities that have taken place and what’s been uncovered, I think the possibility of the same thing happening again could every easily happen again,” Thompson said. “There are areas of mismanagement and lack of accountability.”

Port City Daily news reporter James Mieczkowski contributed to this report.

Caroline Curran is the managing editor of Port City Daily. Reach her at (910) 772-6336 or caroline.c@portcitydaily.com.