County manager: Economic development corporation spent more than $80K on employee bonuses, gifts

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On Tuesday, Brunswick County Manager Ann Hardy presented the board of directors that oversees business development and industry recruitment in the county with three options for restructuring the county’s economic development commission.

On Thursday, Hardy explained why.

Port City Daily made a public records request for financial documents pertaining to the Brunswick County Economic Development Commission, which is funded by the county, the economic development corporation–funded by land sales, including acreage in the Leland Industrial Park–and the foundation, a private entity used to solicit funds for economic development purposes outside the scope of what the county can fund.

Financial documents show the commission has been paying $900 a month for a vehicle to be driven by Jim Bradshaw, the county’s economic development director who announced Tuesday he’s retiring in October. Brunswick County Commissioner Randy Thompson took issue with the expense, saying it was not reported to the IRS as taxable income as required by law.

“I received an email in 2010 explaining that county employees would no longer be able to drive vehicles home,” Hardy, who was the county’s finance officer at that time, said. “I let him know that was where we were going. He never responded back to me. In fairness to Jim, he submitted mileage reports and I think the folks in finance didn’t know what to do with it. It didn’t come to my attention or [the deputy director’s] attention. He has said, ‘I know I was supposed to be taxed and I wasn’t.'”

The current finance officer is in the process of amending three years’ worth of W-2s for Bradshaw to reflect the fringe benefit of the vehicle, which can only be taxed for personal miles driven.

“When I was hired, as part of the agreement of my hiring, I was allowed to take the vehicle to and from home,” Bradshaw said. “I kept mileage records on a monthly basis for years and submitted them to the county for tax purposes. With the county’s assistance, I recently completed the final documentation required by the IRS.”

Bradshaw said the cost of leasing the vehicle, a Chevrolet Tahoe, was cheaper than buying it.

“The vehicle was the same type of Tahoe that had been leased by the commission long before I arrived,” he said. “The reason that size Tahoe is used is with economic development organizations throughout the country is because it sits seven comfortably, it is a four-wheel drive so I can take clients on most any of our industrial sites without getting stuck, and the vehicle is more comfortable than using a car.”

From 2009 until 2014, the Brunswick County Economic Development Corporation paid bonuses to three EDC staff members and the bonuses were reportedly disclosed on employees’ 10-99s as “non-employee compensation,” and not properly taxed, Hardy said

“Those payments should have been made through county payroll,” she said.

Bradshaw said EDC staff members have received bonuses from the corporation for more than 25 years. He said the bonuses were between 2 and 4 percent and, after taxes paid on bonuses, “we were lucky to clear $1,500 or so.”

“This was not started when my staff and I were hired,” Bradshaw said.

During that time, all county employees were under a salary freeze. Commissioners approved a one-time $1,000 bonus for all county employees–including EDC employees–during the five-year freeze.

Hardy said the EDC spent about $12,000 in insurance, which could have been covered by the county’s policy.

In 2009, the corporation had about $117,000 in its account. It’s down to less than $5,000 today.

“[The corporation] spent $9,200 in audit and tax preparation fees for an entity that has very few transactions,” she said. “They spent almost $64,000 from 2009 to 2014 in bonuses for three staff members. They spent $3,300 for artwork that’s in the Leland Center. They spent about $10,800 for gifts and their December meeting. Gifts were cheese and steaks from the butcher. They spent almost $7,000 in per diems.”

“$82,246 was spent on staff bonuses, [board of] director fees, gifts and Christmas meetings,” Hardy said.

Board of directors were paid twice for every meeting they attended–by the EDC commission and corporation–“for years,” Hardy said. “Also not taxed and should have come from county payroll.”

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