A $120k Mistake

The Board of Commissioners swallowed hard tonight and authorized a $120,000 payment to a Carteret County woman to satisfy a five-year-old court order that the town had mistakenly ignored.

This wasn’t easy for any of us, but we really had no choice but to reach in to our reserve fund and make the payment. This won’t affect the current year’s budget or your taxes.

The payment to Miranda Glover stems from the town’s purchase in 2009 of property at 106 Church Street, popularly known as “the cigar shop,” from the estate of Hepsey Bishop. Many might remember that this was a turbulent time in town history that saw wholesale changes in town staff, including the manager. That figures into what happened.

The interest-free promissory note required a down payment on the cigar shop property with a final payment of $190,000 due to the Bishop estate in 2015.

The staff at the time, though, was unaware that a Carteret County court had ordered the town two years earlier to make the payment to that county’s Clerk of Court office to satisfy a $100,000 judgment against Scott Padrick, Bishop’s grandson and her executor.

“The new town manager and the new town finance director had no knowledge of the court order. Neither did the new town attorney,” explained Michael Parrish, the current Swansboro town attorney. “So, the town paid the $190,000 to the estate. That money was then distributed to Scott Padrick.”

Town staff in 2013 put the court order in a “legal folder” in the town’s vault, Parrish explained. Unfortunately, a copy was not placed in the town’s active file relating to the cigar shop property, he said. The current finance director, unaware of the court order directing payment to the clerk’s office, made the payment in 2015 as stipulated by the purchase agreement.

I should note here that Padrick knew that the payment should have been made to the court, but he apparently pocketed our check.

The town learned of the error in November when Glover’s attorney contacted Parrish’s law firm, Ward and Smith of New Bern, asking about the payment to the clerk’s office. The $100,000 judgment had by then ballooned to more than $150,000 after interest had accrued at about $1,000 a month.

The commissioners met several times in closed session to discuss our options

“We believed that the order was enforceable against the town, and that failure to honor the town’s obligations would not only be legally futile, but also embarrassing,” Parrish said tonight.

We directed him to work with Glover’s attorney for several months trying to locate Padrick to get our money back. When that failed, we negotiated with the Glover family to purchase the judgment at a discounted $120,000.

Doing so allows us to enforce the judgment against Padrick to try and recover the town’s money. We intend to do all that the law will allow.

The judgment against Padrick resulted after his dog bit Glover, then a minor, in 2007 in Carteret County. Four years later, a Carteret court issued a $100,000 judgment against Padrick to pay Glover’s medical bills and pain and suffering. After Padrick failed to pay the judgment, the court ordered the town to direct the real-estate payment to the clerk’s office, which would have forwarded the money owed to Glover and given Padrick what remained.

Not making the payment would have exposed the town to a lawsuit and more legal fees and accrued interest.

I’m with Mayor John Davis on this. “On behalf of the Town of Swansboro, I apologize that we allowed such an error to occur,” he said tonight. “We believe this was an error of omission and was due to not having adequate transition processes for leadership changes.”

Though the circumstances are extremely rare, current staff assured the commissioners that this can’t happen again because of their improved bookkeeping and filing systems.

It better not. While I like hanging out at the cigar shop, I didn’t want to pay for it twice.

Thanks to the Glover family. They were willing to work with us and settle the claim at a discount.

Special Session Has Full Agenda

One-way streets downtown, devising a meaningful land-use plan that serves as our blueprint for growth and modifying our decision-making process for development projects to allow more public participation are just a few of the items we’ll discuss tomorrow night at a special session of the Board of Commissioners.

The purpose of the meeting is to lay out our major goals for the coming year. The land-use plan is at the top of my list. The state’s 20 coastal counties are required to devise such plans by the state’s Coastal Area Management Act, which the legislature passed in 1972. The idea was well meaning: Give communities an opportunity to plan their futures by deciding where growth should occur and what form it should take. To prevent plans from becoming outdated and stagnant, the law required that they be updated every five years.

As with so many well-intended government ideas, this one went south pretty quickly. It turned out that most communities didn’t like charting their future. Doing it right was hard work and meant taking uncomfortable stands by telling politically connected, powerful people that maybe building that condo project or shopping center along that waterway wasn’t a good idea.

Soon, then, communities started taking the easy way out. They hired consultants who carved out a niche business producing boilerplate plans that meet the law’s requirements but manage to offend no one. They contain no policy directives and can be changed on 3-2 votes. Few are worth all the trees that were sacrificed to create them.

The state, tired of the charade, changed the rules a few years ago. Now, communities are no longer required to update their plans. Those that do can get a state grant to help defray the cost.

Our plan is almost nine years old. Like most, it’s not worth much. But we got some state money and will try and do it right this time. That means producing a plan that really is a blueprint for future growth, that identifies the types of development we desire and where it will go. An effective plan contains broad policy directives that guide our development ordinances. The plan could, for instance, direct the town to preserve green spaces and wetlands and reduce stormwater runoff. Maybe we desire bike paths and sidewalks. Our ordinances would then be rewritten to meet those goals.

The land-use plan is the bedrock on which our development policies rest. The commissioners can’t rezone land or approve projects that are inconsistent with the plan.

Doing it right will require the commitment of the commissioners and your involvement. This is, after all, your plan, your vision of what you want our town to look like in five years. I hope we will appoint a steering committee to guide the development of the plan. Let me know if you would like to be on it. We’ll also have a series of public meetings to get your ideas. Attend them. The plan will only be as good as the effort we put into it. If we screw it up again, we’ll not likely to get another opportunity to fix it.

I’ve not been shy about stating my displeasure with the special-use permit process we’ve devised to handle many development decisions. You can find my recent post here for more details. We must modify the process to allow more public participation. I don’t pretend to know what the answer is, but I hope the discussion starts Tuesday.

Traffic flow through downtown will likely be an emotional subject. Whether to switch to one-way traffic through our narrow, downtown streets is a debate we first had in the 1990s. I’ve heard from people on both sides of the issue. Some can get right passionate about it. Though I’m open minded about the outcome, I think this is a discussion we must have because traffic through downtown can be jammed on summer days and it’s only a matter of time before a serious mishap occurs.
Our meeting starts at 5:30 p.m. tomorrow at Town Hall. I hope to see you there.