Archived Story

Project ‘claw back’ to cost county $111,000

Published 1:15am Thursday, May 9, 2013

Beaufort County’s share of repaying some grant money associated with the installation of the River Road sewer line will be about $111,000, according to information presented to the Beaufort County Board of Commissioners on Monday.

The repayment by the county is required because the project — mostly to benefit Carver Machine Works — did not produce the number of new jobs as required under terms of the grant agreement. The county and City of Washington were partners in the project.

“It was over a year ago that we came and reported to you some rather bad news in regard to payback that the county and city were going to share in the close out (of the project grant),” Assistant County Manager Jim Chrisman told the board. “That number we tossed around. We gave you a worst-case scenario. We gave you what we thought was going to happen, then, obviously, what we hoped would happen. The worst-case scenario was approximately $600,000 for what some term as a clawback for jobs that were not created as a result of the sewer line.”

In 2006, the county and city staffs worked together to seek funds to run a sewer line along River Road, Chrisman told the board.

“The funding that was available at that time was economic development-based funding. Carver Machine Works, the largest industry on that line … Carver had a plan that would expand their business as well as their employee count. I was in a number of meetings at the beginning, and I recall well Carver’s hesitancy about obligating itself to a total number of jobs, but felt somewhat comfortable with us somewhat moving forward with this project.”

Chrisman noted the county’s original contribution to the project was budgeted at $350,000, but the county, with help from the Mid-East Commission, was able to secure $100,000 from another funding source, thereby decreasing the county’s contribution to the project to $250,000.

“That contribution was a contribution you all made in an effort to get sewer run down that road, but your efforts, of course were to mitigate, or to indemnify, Carver Machine Works in their job creation as well,” Chrisman said.

In a memorandum, Chrisman wrote, “Due to Carver’s success in creating 14 jobs of the original target of 50 and the additional 27 jobs from other businesses, granting agencies approved funding for a total of 41 new jobs for the purpose of funding this sewer line project. … This repayment amount is understandably referred to as a ‘claw back’ by North Carolinians who worry that the State’s job base programs for extending infrastructure could be more effective.”

The board received Chrisman’s report with some degree of relief.

“The only problem I have with this — I’m delighted that we got out of this as cheaply as we did, but it’s a good example of what happens when economic development fails us. At one time, we were up to a figure more than $600,000. Congratulations to Jim, who did an awful lot of work on this and to the manager who supported him, in getting this amount of money down, because it was a lot of work,” said Commissioner Hood Richardson.

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