Amidst a multitude of divisive, partisan issues on the agenda, ranging from revising the county’s agreement with the Fontana Regional Library system to commissioners seeking to make school board elections partisan, the all-Republican Board of County Commissioners engaged in a marathon meeting that concluded just before midnight.
Under old business on the agenda, County Manager Derek Roland presented a proposal to address the county’s remaining $1,850,659 in American Rescue Funds. These funds were allocated to Macon County as part of the federal COVID-19 relief package in 2021.
In October 2022, the Macon County Board of Commissioners unanimously voted to allocate the majority of the $6.9 million received in ARPA (American Rescue Plan Act) funding to premium pay for all county employees. This approved plan granted a $2 per hour bonus to nearly 500 employees, distributed in seven lump sums over six-month increments.
In 2022, Premium Pay was identified as one of the four permissible ways for local governments to utilize ARPA funds, according to the U.S. Department of the Treasury. The others, namely infrastructure improvements, revenue loss, and COVID recovery, were considered but deemed unnecessary as Macon County’s economy grew during the pandemic.
In April 2023, the U.S. Department of Treasury notified the county that, due to President Joe Biden declaring an end to the COVID-19 Pandemic, the allowable uses for ARPA funds had changed. Initially, the funding could no longer go toward premium pay, as the stipulations specified that premium pay was allowed only for time worked during the public health emergency.
While many counties across the country used ARPA funding to provide one-time lump sum bonuses for employees, Macon County’s plan to disburse bonuses in six-month increments through October 2024 meant that the remaining $1.8 million, expected by county employees just before Christmas 2023 and then again six months later, has remained untouched. This amount ranged from $1,080 every six months for part-time employees to $2,160 every six months for full-time employees. The funds awaited an amendment to the policy to reflect federal-level changes.
On Tuesday night, Roland proposed updating the policy to align with amended federal requirements while still allowing the funding to be provided to county employees.
Roland collaborated with the UNC School of Government to ensure the plan complied with U.S. Department of Treasury guidelines. However, Commissioner John Shearl informed Roland that he had done his own research and not only contended that premium pay for county employees was no longer an allowable expenditure of ARPA funds but Shearl also accused Roland of manipulating the county’s budget in order to provide premium pay.
“What you are asking this board to do, in my mind, is to manipulate the funds from the general fund to take that much money out of the general fund and replace it with ARPA funds so you can pay this $2 an hour,” said Shearl.
Shearl said that while he appreciates county employees, taxpayers can’t be burdened with increasing their salaries.
“We cannot spend every penny that we get trying to make employees happy,” Commissioner Shearl said. You’re saying that we need to take this funding and give it to employees so we can be competitive, but the government is trying to be competitive on the taxpayers’ back.”
According to information public the UNC School of Government AFTER the April 2023 ruling, despite Shearl’s claims to the contrary, Roland’s proposal for premium pay met all federal requirements.
“The ability to reimburse for prior expenditures, particularly in the Revenue Replacement category, provides a simplified path to legally obligate and expend a local government’s ARP/CLSFRF funds, which effectively converts the cash to unrestricted fund balance,” Kara Millonzi published on June 30, 2023 for UNC School of Government. “The ARP/CSLFRF allows expenditures on eligible projects in four broad categories:
Responding to COVID-19 and Its Negative Economic Impact
Necessary Water, Wastewater, Stormwater, and Broadband Infrastructure
US Treasury has defined in detail what qualifies as lawful expenditures in each of these categories. And North Carolina local governments also must have state law authority for the expenditures. (There are some expenditures authorized by the grant that are not authorized for NC local governments under state law.)
The grant allows for reimbursements of eligible project expenditures in any of these categories for costs incurred on or after March 3, 2021. The reimbursement may occur at any time before December 31, 2024, the grant obligation deadline.”
In addition to detailing the allowable expenses, Millonzi’s publication further explained that not only is the revenue replacement method Roland proposed and Shearl accused of being manipulative allowed, but it is also how the majority of county’s have utilized the funds.
“The Revenue Replacement category allows ARP/CSLFRF funds to be spent on almost anything a local government has state law authority to spend money on, including salaries/benefits and other general government or public enterprise expenses. The only prohibited expenditures are (1) extra pension fund contributions; (2) borrowing costs or debt service (loan) payments; (3) financial reserves / rainy day fund contributions; (4) litigation costs, including settlements/judgements / consent decrees; (5) expenditures that undermine or discourage compliance with Centers for Disease Control (CDC) guidelines; (6) expenditures that violate federal conflict of interest provisions; (7) expenditures that violate state law or other federal laws and regulations, including applicable Uniform Guidance requirements; and (8) expenditures that the local government has or will receive other external funding to cover (in other words, no double dipping). Further, US Treasury has waived several of the most complex compliance requirements for expenditures in this category.”
Shearl then shifted his focus to accusing Roland of overseeing a $25 million increase in the county’s budget over eight budget cycles. Despite Roland’s denial and the lack of documentation from Shearl, the claim was refuted by county records.
“I have looked at 8 budget cycles since you have been here and the budget has increased $25 million and the only thing taxpayers have gained by this $25 million in the budget is higher salaries and a larger government. That is what we have gained and our county is failing apart,” Shearl said.
Roland disagreed and said, “Maybe in your eyes,” Roland responded. “I think we have a pretty good county.”
Shearl then claimed that in a private meeting he had with Roland that the county manager said county departments were 50% overstaffed… to which Roland immediately interjected adamantly denying the claim, at which point Shearl called for Roland to resign from his position.
“I didn’t say that, John,” said Roland.
“Derek, I am going to tell you something,” said Shearl. “You have called me a liar four times in open session, so tonight, I ask for your resignation.”
Members of the audience expressed their objection to Shearl’s request, causing Commission Chairman Paul Higdon to warn the audience to remain civil or else he would request law enforcement to remove them from the meeting.
Roland again denied Shearl’s accusations and stated that if the majority of the board wanted him to resign, he would.
“John, if you can get two more commissioners to vote, if you don’t like the job that I am doing or you think that poorly of who I am or you question my character, and you can get two more commissioners to vote with you, you can have my resignation.”
Shearl then doubled down on his original claim regarding the budget increase, “The budget has increased $25 million under your watch,” said Shearl.
Shearl did not provide any documentation or references to verify his claim the budget has increased $25 million in the last eight budget cycles, and according to county records, his claim was false. According to public budget records, the FY 2015 budget proposed by County Manager Derek Roland was $45,521,122 and that year the Macon County Board of Commissioners approved a budget in the amount of $45,721,122. This year, for FY 2024, Roland’s budget proposal was $64,788,976 and the budget approved by commissioners totaled $63,754,537, which would reflect an increase of $18,024,415 — $7 million less than Shearl’s accusation. Prior to the current budget year, when the county’s ad valorem tax rate were decreased to be the lowest in the entire state of North Carolina, from FY15 to FY23, the county’s budget increased by just over $13 million.
Further, although Shearl specifically put the responsibility of the budget increase on the county manager, county records show that in FY 2019 Roland’s recommended budget was $1,192,000 less than the budget that was approved, which the more than $ 1 million increase coming at the request of county commissioners, not Roland. The same thing occurred in FY 2022 when Roland’s recommended budget was more than $2 million less than the budget that was approved, again with the budgetary increase coming at the request of county commissioners, not Roland.
Despite the $18 million overall increase to the Macon County budget over the last eight budget cycles, Macon County’s ad valorem tax rate is LOWER today than it was in 2015. The 2015 budget reflected a tax rate of .349 cents per $100 valuation, .094 MORE than the .27 cents per $100 of assessed property valuation that Roland proposed for the current county budget.
For comparison, during that same time frame, Jackson County increased their annual budget by $28,352,795 with this year’s budget nearing $89 million. In Jackson County, the larger budget comes with an increase in the ad valorem tax rate for the county. In 2015, Jackson County’s ad valorem tax rate was .28 per $100 valuation while this year the county’s tax rate has increased to .38 per $100 valuation.
Commissioner Josh Young said he supported Roland’s proposal because county commissioners had already discussed how to spend the ARPA funding and had unanimously voted to spend it on premium pay and the action expected of the board on Tuesday night was to approve changes to meet updated guidelines. Commissioner Danny Antoine said that he supported Roland’s proposal because the money was already approved for county employees, thus it should not be taken away from them.
Commissioner Paul Higdon joined Shearl in voicing his objection to spending the remaining ARPA funding for bonuses for county employees, saying he thought the issue was over in April when the federal government declared the end of the public health emergency. Despite Higdon’s misunderstanding of the status of the funding, Macon County had to readdress the ARPA funding requirement changes or the unspent $1.8 million would revert back to the federal government in December 2024. Despite voting in favor of allocating the majority of the county’s ARPA funds for county employees in October 2022, on Tuesday night, Higdon claimed he was blindsided by the original proposal and felt forced to approve it a year ago. Chairman Higdon also admitted to telling Roland that he shouldn’t even bring up the premium pay and that it shouldn’t be added to the agenda for a vote.
Ultimately, after objections and discussions, the Macon County Board of Commissioners voted 3-2 to approve Roland’s proposal.