There’s a lesson or two here

Published 1:01 am Wednesday, May 8, 2013

It hurts, but it’s not hurting as bad as it could have hurt.

We’re talking about the amount of money it appears the county will have to pay back because Carver Machine Works did not create enough new jobs as required under a grant agreement. The grant agreement was tied to the project to run a sewer line to Carver Machine Works to help it expand. That expansion did not occur at the rate anticipated. Because some of those jobs were not created, somebody has to repay part of the grant funding.

At first, it looked like Beaufort County could have been on the hook for about $620,000. Now, according to information provided during the Board of Commissioners meeting Monday, it looks like the county’s share of the reimbursement is in the $111,000 range. Although it’s shame the county appears to be on the hook for the $111,000, that amount is easier to swallow than $620,000.

The county was joined in the project by the City of Washington, which puts the city in line to pay its share of the reimbursement. That share likely will be the same amount as the county’s repayment.

There’s no doubt the poor economy in recent years is a key factor in Carver Machine Works not being able to expand as much as it had expected. That’s a shame. In a county where the unemployment rate has been in double digits for the past several years, jobs are needed.

It’s also a shame that local governments — also facing tough economic times — will be saddled with repayments they and taxpayers cannot afford.

Beaufort County leaders would prefer having the anticipated jobs instead of having to repay some of the grant funding. They are working to make that repayment as little as possible to lessen the financial burden on the county and its taxpayers.

In recent years, the county and city have been asked to lend their support to efforts seeking grant funding to expand existing businesses or locate new ones in the county. Some of those projects have not lived up to expectations. Other never really got off the ground.

Many of these grants being used to help create these expected jobs provide a specific amount of funding for each job expected to be created. These grants also carry other conditions that could place local governments in the position of repaying some, or all, of the grant funding.

Sometimes, the availability of such grants doesn’t result in new jobs.

Earlier this year, Weir Valves’ announcement that it would close in March and lay off about 60 people comes less than a year after it led city officials and others it was poised to renovate and bring new jobs to the area. That development is a disappointment.

Although Beaufort County and Washington need jobs, any local government helping create new jobs should put itself or a local government in a position so it does not have to repay any grant funds because grant conditions were not met by the company that’s supposed to create the jobs.

With a rare exception or two, taxpayers should never be on the hook when a private enterprise fails.

It’s time to reiterate that when it comes to a new business seeking to locate in the county or an existing industry wanting to expand in the county with help from local governments, the elected officials must make sure that taxpayers benefit as well as the business or industry seeking grant funding and/or incentives that would benefit them.

It bears repeating that such deals must be win-win situations.

Lessons must be learned from the Weir Valves and Carver Machine Works projects.