Local Government Commissions letter to Spring Lake over compliance, transparency concerns

The Town of Spring Lake welcome sign in shown in this undated file photo.

RALEIGH — The N.C. Local Government Commission (LGC) voted unanimously on April 5 to issue a letter to the mayor of Spring Lake and its Board of Aldermen over concerns involving a lack of compliance with state laws and reluctance to work with LGC staff. 

According to a press release by the N.C. State Treasurer’s Office, the LGC’s vote came after discussions of a $1 million loan Spring Lake secured to build a fire station without getting the approval of the LGC. Additionally, the LGC discussed a “lack of invoices” from the town attorney related to services provided for the 2022 fiscal year to date. 

“The lack of transparency and inadvisable governance issues that are occurring in Spring Lake are disturbing,” said State Treasurer and LGC Chair Dale Folwell in the press release. “The fact they are continuing even after a scathing state audit that found more than a half-million dollars in wrongful and questionable spending, as well as dozens of town-owned vehicles that are unaccounted for, is even more flagrant.”  

The letter to Spring Lake’s mayor and aldermen has an April 13 response date and a list of concern areas that include the following issues: 

Compliance with North Carolina Open Meeting Laws — The town board dismissed an interim manager and swore in a new interim manager without a required public vote for either action. No required public vote on the manager’s contract was taken. 

Compliance with the Local Government Budget and Fiscal Control Act — The current interim manager was sworn in without a contract in place, meaning no payments can be made for services. The board has discussed lifting an employee furlough the town put in place as a cost-saving measure. The board does not have the legal authority to unilaterally make that decision because the LGC controls the town’s financial affairs. 

Willingness to work collaboratively with LGC staff — The LGC is asking for answers to the status of town attorney Jonathan Charleston, who submitted a 30-day notice of resignation on March 23. Those include whether the board officially accepted the resignation, if so the date the contract will terminate, if not the date the board will accept the resignation, and what plans the board has and what steps it will take to obtain legal representation. The letter notes the board voted at its March 28 meeting to refuse to allow an LGC staff presentation dealing with the town’s financial affairs. Understanding town financial challenges is a key fiduciary responsibility. 

Spring Lake’s finance issues have been on the radar of the LGC for the better part of a year. Last Oct. 5, the LGC voted unanimously to take over Spring Lake’s finances. At the time of that vote, the town was close to defaulting on $221,385 in debt-service payments. 

Spring Lake’s fiscal issues continued when N.C. State Auditor Beth Wood’s office published a report late last month that found more than $430,000 in taxpayer funds were spent for personal use in the town of Spring Lake. 

About A.P. Dillon 1133 Articles
A.P. Dillon is a North State Journal reporter located near Raleigh, North Carolina. Find her on Twitter: @APDillon_