Folwell, Penny spar over EC at LGC meeting
By Paul Nielsen Staff The Daily Advance Writer Mar 10, 2023
State Treasurer Dale Folwell and state Secretary of Revenue Ronald Penny had a spirited discussion about the state of Elizabeth City’s finances at a meeting of the Local Government Commission’s Board of Directors earlier this week.
Folwell, who has been critical of the city’s cooperation with the LGC on addressing its financial problems, told the nine-person board Tuesday that it is a “very disturbing situation.”
“The reason I want to bring this up is that you all need to know it is disturbing,” Folwell said. “This doesn’t need to jump up on the table one day and you ask, ‘Where did this come from?’”
But Penny pushed back, saying the current City Council in Elizabeth City inherited many of the city’s ongoing financial problems. He also said the city took a financial hit in the aftermath of the fatal shooting of Andrew Brown Jr. in April 2021. He said that he would be willing to sit down with city leaders to discuss the situation.
Tuesday’s discussion was the first time that Folwell and the LGC staff have talked about the city’s financial problems publicly with the full board.
Elizabeth City is on the LGC’s Unit Assistance List mainly because the city still has not filed with the state its required audits for the fiscal years 2020-21 and 2021-22. The city and the LGC entered into a financial accountability agreement last October.
“The transparency, competency and governance needed to pull Elizabeth City out of the ditch, I’m not seeing any of it,” Folwell told the board. “It’s a serious, serious situation.”
Penny told the LGC board that the city has faced a set of unusual situations over the past several years that have put stress on the city’s finances.
Penny has been the Secretary of Revenue since 2017 and owns a home in Pasquotank County that is serviced by the city’s electric department. He has also in the past provided legal advice to the local NAACP chapter in its effort to restructure the county’s Board of Commissioners.
“Let’s be fair to the (current) elected leaders, some of them were not the elected leaders five years ago,” Penny said. “The mayor (Kirk Rivers) was just elected, he hasn’t been (mayor) five, six years. In all honesty, they have inherited some of this.”
Penny mentioned COVID and problems with a billing software conversion as two issues the city has faced the last several years. But he specifically talked about the financial impact that the deadly shooting of Brown had on the city.
Brown, who was unarmed, was shot and killed by three Pasquotank sheriff’s deputies on April 21, 2021. Former District Attorney Andrew Womble later ruled the shooting was justified. The county agreed last June to pay Brown’s family $3 million to settle a $30 million civil lawsuit against the Pasquotank County sheriff and the three deputies.
Penny said the city had over $1.5 million in police costs associated with months of daily protests following the shooting. He said no small city is able to incur such costs without it having an impact on its finances.
“While the city was not involved with the shooting the city bore the brunt of some 100 days of demonstrations with policemen having to get out and basically keep the factions apart and keep the people safe,” Penny said. “They should have billed the county for it because they got them into the trouble.”
Folwell responded by saying: “I don’t see that we would be in any different place today than we were if that had not occurred.”
Penny also said that until both of the past-due audits are completed it is impossible to “know what is going on” in Elizabeth City.
“I would be more than happy to sit down with those leaders and have some discussions,” Penny said.
Folwell said the state’s efforts to help the city are not racially or politically motivated. Folwell, who is a Republican, is considering running for governor next year.
“Every suggestion we make (to the city) is, ‘Oh, that is racial, that is political,’” Folwell said. “That shows there is no interest in figuring out what is right, getting it right and keeping it right. If they want to label everything as being racial and political they can have it because I am not going to tolerate it.
“You can’t look at the color of my skin, or my political party or my gender and know anything about my background,” Folwell continued. “I’m not going to let anybody on this board or in Elizabeth City paint my barn about who I am and how I feel about this. Period.”
Interviewed after Tuesday’s meeting, Rivers said the city has been cooperative with the LGC, claiming, “we have not thrown stones at anybody.” He said some of the requests made by the LGC, like changing the city’s utility billing policy, can’t be completed “overnight.”
“This City Council and mayor, we are not about trying to settle this in the newspaper,” Rivers said. “Our goal from day one has been to meet with (Folwell), and we have had meetings with him and his staff to work this out together. We will not and have not disrespected the office of the treasurer by feuding. We will continue to work together in the spirit of cooperation to better Elizabeth City.”
At one point Tuesday, Penny responded to Folwell by saying “let’s calm this down.”
“Just as you feel you have been imputed by them, your statements make them feel imputed,” Penny said. “If this was going to be this important of an issue it should have been on the agenda. Let’s get the facts. If we are going to talk about their finances let’s make sure they get their finances in.”
LGC Staff Director Sharon Edmundson also told the board that some city leaders are more interested in working on economic development than on the city’s finances.
“I understand that, they are a hub for that part of the state,” Edmundson said. “But you can’t move forward without a solid foundation and they do not have one.’’