NAVASSA — The small town of Navassa is yet again in financial peril as it has found itself soon without an administrator, finance officer, adopted budget or cooperative council.
In a May 23 letter, the Local Government Commission — which oversees municipalities’ finances as an extension of the Department of State Treasurer — told the town it has “serious operational issues” in bold font. On multiple occasions, the town has called meetings to address its shortcomings and directives from the LGC, but all five council members failed to form a quorum.
It is now on its fourth attempt to call a meeting, scheduled for Thursday morning, to sort out issues. As of press, it was unclear who would show.
“We’re hoping that the local elected officials will come together, meet under the rules and charter of that community, and listen to the advice of former Governor Jim Martin, who always tells us doing right’s rarely wrong,” North Carolina State Treasurer Dale Folwell said. “And the right thing to do is to convene a meeting and get a finance officer appointed as well as adopting a budget.”
If its elected officials do not succeed in those tasks, Navassa could wind up joining the eight government units currently under the LGC’s financial control.
Mayor Eulis Willis did not respond to phone calls for comment but sent texts confirming council has not met to address the LGC’s list of orders because of problems uniting as a full board. He indicated part of that was due to his own personal reasons.
Also, he added the agenda “ballooned to 18 items and half the council is saying that’s too much without necessary information.” The plan for the meeting includes references to altering the town’s government style and representation.
He said that the town attorney, who did not return a phone call by press, had the list of items he requested be removed. None of those items were relevant to LGC’s request, the mayor clarified.
Asked again if he would attend Thursday’s meeting, Willis texted at 4:45 p.m.: “Will the agenda be adjusted [in] less than an hour? … At least half of us want that.”
At least one April meeting and two May meetings were unable to proceed due to a lack of attendance, despite the current statewide Covid emergency order that allows remote participation.
“There’s obviously a struggle,” Folwell said. “If one person doesn’t want to play the game, that keeps everything in gridlock. And I don’t think that’s in the best interest of any citizen, but especially the lower- and fixed-income citizens of that community.”
Financial woes are not new to the town of Navassa. It is a longtime member of the LGC’s Unit Assistance List, an annual log of local governments and public authorities facing severe financial and governance challenges.
“Some of their financial issues have been masked by the fact that they’re one of the fastest-growing areas of the United States,” Folwell said.
The treasurer said internal control issues often bleed into budget problems, but if sales tax money and other revenues come in higher than projected, those deficiencies are sometimes covered up.
In September 2021, Navassa signed a fiscal accountability agreement with the LGC as a promise to straighten out operations.
“It basically creates a recipe with guardrails,” Folwell said.
As part of that consensus, the office visited the town May 17 and identified four critical concerns. By May 27, according to the letter shared by the treasurer’s office, the town was expected to respond, addressing each finding and outlining its remedy. Town administrator Claudia Bray wrote in an email the reply was complete and awaiting council’s signature. As of press, she had yet to share a final copy.
The top pressing issue is Bray’s impending resignation, effective Friday. She holds double duties as the town administrator and finance officer. Without a finance officer, the town cannot write checks, and therefore could default on debts or fail to pay its staff, including police officers. The public safety department has faced its own crises in the past. At one point last year, district attorney Jon David and the Brunswick County Sheriff’s Office urged the town to contract with deputies because no officers were patrolling the town. In one unexplained case, a man was charged with impersonating a police officer while driving a marked Navassa vehicle.
The LGC’s letter underscores one employee executing multiple financial tasks — including writing and approving checks and reconciling the bank account — as a “significant internal control weakness.” It advised town leaders to immediately assign the reviewer role to another qualified individual, such as the deputy finance officer.
The board must appoint, at the least, an interim finance officer by the end of Bray’s last day and pen a transition plan to fill the position with a permanent employee. LGC recommended Navassa work with the Cape Fear Council of Governments in its recruitment efforts.
Another issue at play is the budget. Across the state, fiscal year budgets are due by July. If the town does not approve a financial plan, it must at least adopt one in the interim. Without a budget, it cannot conduct payroll or spend any tax dollars. At this time, the town has a $4-million draft.
On the agenda for Thursday morning’s special meeting are discussions about the LGC’s demands and the currently vacant town planner and administrative assistant positions. Council also needs to set a date for a budget workshop and appoint points of contact for grants. It is in the midst of projects with the Natural Resource Trustees to develop the former Kerr-McGee Superfund site. Those are major and potentially transformative undertakings in the town, now at risk of delay.
It also includes research to “switch the style of government” and for “equal voting representation.” Currently, the elected board has three District 1 seats, a District 2 and 3 seat.