Sunday, January 31, 2010

No More Dithering on the Duck Pond

It looked for awhile like the town of Oriental might once again dither on the restoration of Raccoon Creek, affectionately known as the Duck Pond. Early Monday morning, though, Mayor Bill Sage is reported to have signed the Authorization Document to seek funds from the state for project planning.

This process has been dragging out for years. Neighbors have pleaded with the town to close Main Street at the Duck Pond, perhaps replacing it with a footbridge or bicycle bridge, high enough to paddle a small boat under. The street is flooded and impassible often enough that the neighbors want it closed.

Two years ago a Duck Pond Committee was formed. They worked with an engineering firm to develop a plan, which was presented to the public. When completed, the Duck Pond restoration would result in an attractive park-like setting in the heart of the old village, attracting residents and visitors alike.

To complete the project, the town needs grant money. The first grant submission ran into problems, and it was withdrawn. But it is important to keep the project alive. In particular, we need to remind the North Carolina Clean Water Trust Fund that we are serious about pursuing the project.

Last Thursday at the Oriental Town Board agenda meeting, Commissioner Bohmert briefed the board on a grant opportunity requiring the original proposal to be split into more manageable chunks. The first chunk would be a planning grant, which would require NO matching funds from the town. The engineering firm is preparing the grant application, and needed a signed authorization document no later than Monday, February 1.

The ensuing discussion was disappointing. Mayor Sage refused to sign the authorization on the grounds he does not understand the "functions and obligations" the town must "proceed with diligence to perform" if the grant is made.

From where I was sitting, the functions and obligations seemed pretty obvious. We would be requesting a grant to perform planning. The obligation pretty clearly is to spend the money and manage the effort to insure a plan is delivered.

The mayor has since relented and signed the document. It is on its way.

If this document had not been signed, in the normal course of events, it could be another year before a grant opportunity occurs. And the town would have no plan.

That is why it sometimes takes so long for the town to do things.

P.S. Main street was impassible this weekend.

Saturday, January 30, 2010

Another Take on Adulthood

Rudyard Kipling lived until 1936, but was a nineteenth century man. He set down his take on leadership and adulthood in a poem reflecting what we may think of as traditional values. It also reflected the unthinking misogyny of his time. It never occurs to him that leadership qualities might apply to women as well as men.

Still, it is worth reflecting on his thoughts.


by Rudyard Kipling

If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or, being lied about, don't deal in lies,
Or, being hated, don't give way to hating,
And yet don't look too good, nor talk too wise;

If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with triumph and disaster
And treat those two imposters just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to broken,
And stoop and build 'em up with wornout tools;

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: "Hold on";

If you can talk with crowds and keep your virtue,
Or walk with kings - nor lose the common touch;
If neither foes nor loving friends can hurt you;
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds' worth of distance run -
Yours is the Earth and everything that's in it,
And - which is more - you'll be a Man my son!

Thursday, January 28, 2010

Adult Supervision?

In yesterday's New York Times, columnist Thomas L. Friedman asked, rhetorically: "Aren't there any adults here?"

He was talking about the economy and referring to the Congress and other political and financial elites, but the question has broader application.

Friedman quotes Dov Seidman, C.E.O. of LRN, talking about two kinds of values: "situational values" and "sustainable values."

Leaders guided by situational values act however the situation allows, regardless of the wider or longer term interests of their communities. The governing thought:"I'll be gone when the bill comes due." A variation of this attitude in my naval experience was "it won't happen on my watch, and I don't care what happens on the next guy's watch."

Those guided by sustainable values say, instead, "I will never be gone. I will always be here. I must behave in ways that sustain - my employees, my customers, my suppliers, my environment, my country and future generations."

Those guided by sustainable values are the adults in society. They are the nonagenarians who plant trees. They exhibit what we used to call (in the Navy) "forehandedness." They look ahead. They build for the future. We need more adults.

Tuesday, January 26, 2010

North Carolina's ICW: Neglected Economic Engine

What would you think of an infrastructure project that reduces petroleum imports, reduces congestion on I-95 and 17 without expensive and disruptive construction, and brings sustainable jobs to thirteen counties in Eastern North Carolina? How could that be done? Improve and expand the North Carolina portion of the Atlantic Section of the Intracoastal Waterway as an integral part of the North Carolina and national transportation system.

  • Water transport of cargo is the most fuel efficient and lowest cost method. A gallon of fuel moves a ton of cargo eight times as far on water as on land;
  • Water transport is by far the least costly and safest of all transportation modes and has the lowest environmental impact;
  • A single barge carries as much cargo as 58 trucks; typical tows are from four to fifteen barges – a single tug and fifteen barge tow replaces 870 trucks;
  • USDOT projects truck traffic on I-95 will double by 2030 increasing an average of 10,000 trucks per day, equivalent to a dozen fifteen barge tows;
  • Increased ICW traffic would offer the opportunity for steel barge and tug construction and maintenance, barge cleaning and storage operations and related economic development opportunities in Eastern North Carolina.

  • Decades of neglect of the ICW, lack of funding for maintenance dredging, postponed modernization projects, lack of official advocacy by the State of North Carolina;
  • Failure to view the ICW as part of an integrated transportation system: the State agency that interfaces with US Corps of Engineers is Fish and Wildlife, not DOT;
  • Failure to involve counties and regional councils of government (COGs): the only NC commission with ICW responsibility is the Morehead City Navigation and Pilotage Commission, with responsibility as far as Aurora, but whose membership is required to be from Carteret County (ICW transits 13 counties);
  • Shortage of intermodal transshipment facilities at railheads and ocean ports;
  • Failure to adapt highway asset management strategies to waterway infrastructure analysis

  • Create a North Carolina ICW Commission with membership from each of the 13 bordering counties, regional COGs and rural transportation planning organizations (RPOs) to develop a comprehensive, coordinated plan for water transport, integrated with land transportation planning and economic development planning;
  • Investigate opportunities for intermodal transshipment facilities at Washington, New Bern, Morehead City, Jacksonville, Wilmington, Southport and other locations along the ICW with rail and truck facilities;
  • Charge NCDOT with task of ICW transportation planning;
  • Assign a cabinet level official to interface with US Army Corps of Engineers

For more information, consult the following:

Waterways Council, Inc., (WCI), the national public policy organization that advocates for a properly funded and well-maintained system of inland waterways and ports.
Bluewater Charts & Books Newsletter -Following the Intracoastal Folly: What is happening to keep the waterway running
NC State Ports Authority - 21stCentury Transportation Intermodal Committee - February 21, 2008 Report

North Carolina Coastal Federation
US Army Corps of Engineers: Inland Navigation - Value to the Nation
North Carolina Beach, Inlet & Waterway Association

Monday, January 25, 2010

STEP: Does it Have a Theme?

It may be unfair, but when I read the plan attributed to the Pamlico County STEP (Small Town Economic Prosperity) plan unveiled at a meeting at Pamlico Community College January 6, I was reminded of Winston Churchill's reaction to a particular dessert. "Madame," he said, "this pudding has no theme."

It is probably unfair to comment, since I didn't attend any of the meetings or do any of the work. A fair assessment of the proposals might be, "they can't hurt."

There may, in fact, be a unifying theme: tourism.

I don't object to tourism. It has the potential to entice visitors to come spend money in the county. That's good.

What the proposed activities don't seem to do is provide a sustained base of economic activity. A sustainable effort creates jobs. The measure of success should be jobs and payroll, preferably year-in and year-out, month-in and month-out.

I don't think a flea market, a revived Blue Crab festival, or a set of marketing materials are likely to accomplish that.

The county needs a more ambitious plan.

Saturday, January 23, 2010

Town of Oriental Audit - Some Lessons Learned

I'm glad to note what seems a growing consensus among the Board of Commissioners that the audit of the Town's finances for fiscal year 2009 was competent and thorough.

I believe it likely that the town will continue to use the services of Pittard, Perry and Crone for the next audit. That's good news.

"Big Picture" Lessons from the 2009 audit report:

I think there are a number of lessons to be learned from the most recent audit, including:

1. When the auditor comes, it should be an "all hands on deck" event;

2. The auditor can be expected to investigate and report how things stand as of the day of the audit (June 30), and not what was corrected later;

3. The town gets a better and more thorough audit when the auditor comes to the town instead of doing the job remotely;

4. The purpose of listing deficiencies is to make the Board and the public aware of problems requiring attention - an audit does no good if it fails to spell out specific issues that fall short of good business and accounting practices;

5. The Board of Commissioners, and the Oriental taxpayers, need to be aware not only of the deficiencies reported in audit reports, but also of the auditors' recommended "fixes."
The Nitty-Gritty Details of the 2009 audit report:

I am working on a detailed analysis of the audit's reported Control and Material deficiencies, which I may share. Comments made at the January 5th Town Board meeting concerning the audit shed more heat than light on the subject.

Most of the listed deficiencies have already been corrected.

The major remaining deficiency is in the water system - the apparent discrepancy between the amount of water the town pumps from its wells and the amount billed to its customers.

Heidi Artley, who keeps careful track of water usage for individuals and alerts customers when she sees evidence of possible plumbing leaks, also checks each month to determine the difference between amount of water pumped from the wells and the amount billed. She informed me a few months ago that the percentage of wastage appeared to be increasing, beyond the expected loss from flushing the water system. She has some ideas as to what to look for. Fortunately, Commissioner Johnson has taken on the task of reactivating the town's Water Board, to make recommendations to the Town Board on water issues, including apparent wastage.

One Lesson from the 2008 audit - Look Beyond the Audit Report:

One additional lesson to be learned from the previous (FY 2008) audit is that the Board of Commissioners, and town citizens, need to be aware of and pay attention to communications from the auditor outside of the annual audit report.

For example, the 2008 auditor Seilor Singleton advised the town to make $500,000 in "adjusting journal entries" (AJEs) to the town books.

The auditor's recommended adjustments to the town's General Fund amounted to $250,000, or about one-third of the total amount of the General Fund budget. The adjustments to the Water Fund also amounted to $250,000, or about 125% of the amount of the Water Fund budget.

The auditor did not communicate these recommendations to the Board of Commissioners, and they were never brought to public attention.
In the future, they should be.

While I am not an accountant, I do understand that "adjusting journal entries" do not necessarily indicate there have been any problems or accounting errors. AJEs are generally a part of normal accounting procedures. However, AJEs are sometimes used to correct accounting errors, and it appears that at least one of the 2008 AJE recommendations was made in order to reconcile a $3,500 shortfall in the town's cash-on-hand account.

Whether AJEs recommended by the town's outside auditor are made to correct accounting errors or as part of the normal allocation of income and expenditures, the auditor works for the Board of Commissioners and should report all findings and recommendations - including AJEs - directly to the Board.

The preliminary audit report for FY 2009 is not the last communication the town will receive - the town can expect at least one letter from the Local Government Commission approving the audit or directing actions to be taken. There may also be a communication from the auditor forwarding adjusting journal entries. The Board, and the public, should pay as much attention to any such communications as they have to the audit report itself.

Wednesday, January 20, 2010

Town Board Meeting: Audit

This week's Pamlico News printed an article about Oriental's Town Board meeting of January 5 concerning the town audit and other issues.

This completes the accounts available in Pamlico County news media to citizens who did not attend the meeting.

I did attend the meeting, and over the next few days I will offer some additional commentary.

Tuesday, January 19, 2010

Oriental's Future: a Vision

A little over a year ago, as the Long Range Planning Committee was nearing completion of its task, Dee Sage asked the members to each draft a vision of what the Town would be like in ten years. My response focused on how the town might grow, and what paths we might follow in economic development.

The final Long Range Plan didn't incorporate every element of my vision. I hope we can have a broader discussion about the future, including a discussion about the future of Pamlico County. To foster such a discussion, I thought it might be useful to share my vision. Over the next few weeks, I will flesh out the vision in more detail.

I would welcome comments.

Oriental in Ten Years

By David Cox

My vision of Oriental in ten years is as follows:

Population: increase to 1750, through a combination of migrants from elsewhere and annexation of neighboring developed land.

Principal economic activities: water dependent activities, including fishing, shrimping and crabbing, expansion of existing marinas to include more boat repair, maintenance and construction; marine trades in support of expanded use of ICW for commercial as well as recreational purposes; support for transiting recreational boats; provision of services in support of green power and improvement of water quality; tourism, with emphasis on outdoor activities associated with the water, including paddling, exploring of marshlands, birding and related activities; recreational fishing.

Public facilities: increased boating infrastructure facilities, including additional town dock at foot of South Avenue (after town wins its lawsuit), associated marine welcoming center, shower, laundry and head; municipal mooring fields in Smith Creek, Raccoon Creek, Neuse River, protected by additional breakwater, and with protected dinghy landing at one of our street ends – this has made Oriental a “must stop” for transiting boaters; additional wildlife boat ramp on Camp Creek in newly annexed part of town.

Businesses: increase in population and tourism and more frequent visits by transiting boaters provides expanded customer base for businesses, including a convenience store, pharmacy, car rental facility, boat rental, and one or more destination restaurants.

Housing: additional housing stock through infill (building on existing lots) in R-1 and R-2 areas and construction of multi family dwellings in R-3.

Demographics: Median age of population decreases due to influx of working age families.

Oriental will have developed greater cooperation with Pamlico County, especially in area of economic development.

Monday, January 18, 2010

Haiti's Agony

Forty years ago, my ship, USS W.S. Sims, pulled into Port au Prince, Haiti, for the weekend.

My wife and one of the other officer's wives surprised us by meeting us at the pier. They had flown down from Mayport, Florida to join us. There had been soldiers with machine guns on the roof of the air terminal. It was the last year of the notoriously corrupt and brutal regime of Papa Doc Duvalier.

The amount of poverty was startling. I had seen crushing poverty in rural Holmes County, Mississippi and in rural areas of the Philippines, but nothing to compare to Haiti. Still, we found the Haitians on the street to be friendly and welcoming.

We stayed in a lovely old hotel run by an expatriate German couple. The place was reminiscent of the setting of a Graham Green novel.

We rented a run-down VW and drove up into the mountains. There were still trees on the mountainsides then, and the view was spectacular. The roads were full of boulders with sharp edges. One of them punctured a bald tire. I checked under the hood and found the jack and spare tire, but there was no tool to get the hub cap off. Soon a Haitian farmer happened along. The only tool he had was a machete. He applied it to the hub cap and had it off in a jiffy. We thanked him and changed the tire. He smiled, waving and walked on up the mountain. We decided it was best to head on back to the hotel.

Back in Port au Prince, we explored the streets and were fascinated by the outpouring of art. Many of the paintings would have been classified as primitive art - flat perspective, simple primary colors. But there were other paintings of the highest quality painted with a complex palette, that would have been at home in major art galleries.

It was only a brief visit, but it left us with a strong impression of a wonderful people. We can only wish them well.

Sunday, January 17, 2010

Martin Luther King, Jr.

I never met Martin Luther King, Jr. But I knew about him as early as 1955.

1955 was a busy year. It was my second year at the University of Mississippi ("Ole Miss"). That August, Emmett Till, a fourteen year old from Chicago visiting relatives in Money, Mississippi was brutally lynched. In December, Rosa Parks refused to give up her seat to a white man on a public bus in Montgomery, Alabama.

We heard more and more about the young, charismatic minister who led the bus boycott in Montgomery, and organized the Southern Christian Leadership Council.

I only knew one person who had personal contact with the Reverend King: Will D. Campbell, a Baptist minister who was Director of Religious Life at Ole Miss from 1954 to 1956. Will was an avuncular, pipe-smoking man of Scotch-Irish background who had first been a preacher as a teen in Amite, Mississippi. He ran afoul of the University administration in a series of events, including the kerfluffle over the Reverend Al Kershaw and an incident when the Assistant Registrar, suspected of being an agent for the Mississippi State Sovereignty Commission, discovered Will playing ping pong in the campus Y building with the minister of the Second Baptist Church in Oxford. "We were separated by a net and using separate but equal paddles," Will explained to the Chancellor.

Will left the University and went to work for the National Council of Churches Department of Racial and Cultural Relations and other organizations in Nashville. He was very impressed with Dr. King. "The man is a saint," he told me during a visit to Ole Miss in 1958.

I knew Will well enough to know he wasn't describing King as a "goody-goody," but as someone both committed and effective. He was especially impressed with King's dedication to Gandhi's concept of nonviolence. The most impressive fact about Gandhi's nonviolence is that this wizened little man in a loincloth carrying a walking stick and no weapons other than an iron will had brought down the world's greatest empire of the day.

A few years ago my wife and I visited the Martin Luther King Jr. museum in Atlanta. In the bookstore was a well-illustrated book on the civil rights movement. On the cover, a headline declared that Martin Luther King Jr. had worked to insure freedom for African Americans. I disagree. He worked to achieve freedom for Americans.

Thursday, January 14, 2010

LOng RAnge Navigation (LORAN)

We just learned that the Coast Guard will cease transmitting LORAN-C signals at midnight zulu February 8, 2010. This will bring to an end almost seventy years of development and operation by the US of a very valuable hyperbolic radio navigation system.

I personally never owned a LORAN-C set. I used LORAN-C in the navy, but never liked it. Maybe I disliked it because the set I used was a klunky converter to a LORAN-A set.

I liked LORAN-A. I was introduced to LORAN-A operation on a WWII-vintage DAS-3 LORAN-A receiver, during midshipman training cruise on USS Macon the summer of 1957. It took a little while to get the hang of it, but it gave the operator a lot of control. I used a DAS-4, a slightly improved model, on USS Cabildo and USS Higbee.

The system was intended to provide a fix by plotting time differences from two pairs of stations arranged as a chain, with the master station between two slave stations. The geometry of the arrangement would cause lines of position to cross each other at an angle that resulted in an acceptable fix. A single LORAN line could also be crossed with a sun line. That often came in handy.

LOng RAnge was a bit of a misnomer. The system was designed to use a ground wave radio path, and the maximum distance the signal would reach was about 900 miles during the day and maybe 1600 miles at night. That wasn't enough to reach across the wide Pacific.

A skilled operator could use the system over greater distances by measuring the time difference of sky waves - as long as they were one-hop waves off the E-layer of the ionosphere. If you were really skilled, when operating in the Western Pacific, it was often possible to match the ground wave of a master station with the sky wave of a slave station, apply a time difference correction from a special table, and plot an accurate line of position.

A key skill requirement was the ability to distinguish a sky wave from a ground wave. That took a bit of time and patience. Sky waves were less stable than ground waves, but they could appear fairly stable for a short period. If the operator inadvertently matched a ground wave with a sky wave, the resulting time difference could plot very far away from the ship's actual location. I believe that is what happened when USS Frank Knox ran aground on Pratas Reef in the South China Sea in 1965.

I never trusted LORAN-C because there were too many automatic features. I wanted to see the actual wave form to see what I was dealing with. And I preferred to plot the line of position myself on a piece of paper.

Utility Billing Information as Public Record

North Carolina General Statutes section 132-1.1(c) explicitly provides that “billing information compiled and maintained by a city or county or other public entity providing utility services in connection with the ownership or operation of a public enterprise, excluding airports, is not a public record as defined in G.S. 132-1.”

Does this mean the city may not disclose billing information? Not exactly, according to a recent post by Kara Millonzi of the School of Government on the NC Local Government Law blog. She postulates a number of scenarios under which the disclosure of billing information may be legal under G.S. 132-1.1(c). She suggests, however, that the decision to make such a disclosure should be pursuant to a decision made by the governing board, and the municipality should apply any governing board directive consistently.

In any event, G.S. 132-1.10 prohibits a local government or public authority from intentionally communicating or otherwise making available to the general public certain identifying information, including Social Security or employer taxpayer identification numbers; driver’s license, state identification card, or passport numbers; checking or savings account numbers; credit or debit card numbers; digital signatures; personal identification code numbers; biometric data (such as eye scans, voice scans, and DNA); fingerprints; or passwords. Furthermore, G.S. 132-1.2(2) prohibits a local unit or authority from revealing an account number used for electronic payment (defined as payment by charge card, credit card, debit card, or by electronic funds transfer).

Bottom line: the town does not have to disclose any of this information to the public. It may under certain circumstances, but better be very careful.

Oddities: 2 - Prodigal Documents

Late last summer I raised the issue of closed session minutes. We discussed the issue at the Town Board meeting September 1, 2009 and agreed to proceed with efforts to open minutes no longer required to be closed.

At the Town Board meeting of October 6, it was revealed that the book containing the minutes could not be located. At the November 10 meeting, commissioners were given a packet of closed minutes to review. I noted that minutes of some closed sessions seemed to be missing. The town staff conducted a search of computer records and were able to reprint most of the missing minutes, but signed copies were still not found.

At the Town Board meeting of December 1, the outgoing board opened some of the formerly closed minutes to the public. The missing signed copies had still not been found.

After Christmas weekend of 2009, I learned, the missing notebook reappeared in the office. The fixed asset ledger which couldn't be found during the audit has also reappeared.

Whoever knows where the documents had gone and how they were returned hasn't disclosed the information, to the best of my knowledge. Why would anyone remove the notebooks from Town Hall? I don't have any idea. The documents themselves remain silent.

Another odd event.

Wednesday, January 13, 2010


I checked the calendar this morning and noticed that Friday the thirteenth came on Wednesday this month.

That observation betrays something about my age. I am of that fortunate generation blessed with the chance to read the late Walt Kelly's daily comic strip, "Pogo." Not only that, I was old enough to mostly understand it.

Pogo most famously observed, "We have met the enemy and he is us."

Where is Walt Kelly when we need him?

Tuesday, January 12, 2010

Observing the Proprieties: Elected Officials

I have strong views on how it is appropriate for government officials to act. These views flow from my studies of American Government, more than a quarter century in the US Navy (including eight years service on headquarters staffs) and fifteen years or so performing government contracts. Last November I tried to distill those views into a post on leadership and management. This post wasn't targeted at any particular individual but was prompted by my growing concern over organizational issues at town hall.

During my two years as a town commissioner, I never had any illusion that I possessed authority over the town manager with respect to daily operations. I certainly offered advice and suggestions. They were often ignored. I found that appropriate. After all, I was only one of five commissioners. The only authority I possessed was as a part of that body.

I never possessed a key to town hall. I saw no need. I never possessed a key either to the outer office or to the manager's office or to any of the file cabinets or safes. I never possessed any passwords to any of the computers in town hall. Had a town manager offered such things to me I would have declined.

In our country, even at the level of town government, we have a wall of separation between legislative, executive and judicial functions. Yes, there are occasional shared functions as when the town board acts in a quasi-judicial capacity. But that is a tightly governed exception.

Regrettably, in the Town of Oriental, over the holiday period, the separation between legislative and executive functions was breached. At least twice.

This is beyond rumor. On Christmas weekend, Commissioner Venturi was seen in town hall, in both the outer office and in the town manager's office, accompanied by a town employee. She appeared to be rummaging through the town manager's files. Whether she removed any original documents, I don't know. I do know that a day or two later, she appeared with a bundle of financial records at The Bean and went over them with one of our citizens.

On New Year's weekend, Commissioner Venturi was seen in town hall again, in the outer office, printing out records from the town's accounting system. I do not believe Commissioner Venturi has a password for the town's accounting software. I believe she is not an authorized user. She could not have performed such an operation without breaching the integrity of the town's accounts.

The witnesses in both cases are absolutely reliable.

By the way, if any town employees provided assistance for any breaches, I hope the Town Board will make the rules absolutely crystal clear and enforce them in the future.

The town needs to make an assessment as to whether personal information required by law to be protected has been compromised by a security breach. If it has, there may be a requirement to report the security breach to individuals and to the NC Attorney General. This is serious stuff.

Oddities: 1

Among recent oddities at Town Hall that no one reported in the media was the curious exchange at the January 5 Town Board meeting over minutes.

The usual agenda sequence is that just after the pledge of allegiance, the Town Board adopts minutes of the previous regular meeting of the Town Board as well as of both closed and open sessions that may have been held in the interim. This is usually the least interesting or controversial part of the meeting. Occasionally one of the board members will propose an amendment to the minutes, and if there is any disagreement among members, it is quickly resolved and the minutes approved.

This time, as best I could tell from the back row, the board objected to both the form and content of closed session and open session minutes prepared by the recording secretary. Apparently the board had provided direction to the recording secretary at the agenda meeting. It seems that, instead of simply removing the text board members wanted removed, she used word processing software to line through the passages. When members of the board objected, she informed them that she "stands by" the version she prepared. Then she argued with the mayor over the facts.

It is worth noting that North Carolina General Statutes do not require minutes to be verbatim. If they did, the attic of Town Hall (where old records are stored) might have collapsed from the weight. The recording secretary is also not in the position of a court reporter. The minutes are under complete control of the Town Board.

Following a heated argument between the recording secretary, town commissioners and the mayor, the board once again directed the recording secretary to remove certain passages from the minutes. Then when the vote was held, Commissioner Venturi voted "no."

I have personally never seen an Oriental commissioner vote against adopting minutes. I have asked long time residents, including former commissioners and none of them recalls it ever happening before.

That's odd behavior.

Saturday, January 9, 2010

The Water Board finally Meets

The most positive development to come out of the January meeting of Oriental's Town Board is that the water board has finally been convened. See my earlier thoughts on this subject.

Commissioner Johnson is apparently determined to establish terms of reference for the water board similar to those governing other advisory boards. This will be a good thing.

I hope the water board is able to investigate where the town's missing water is going. I have known about the unexplained disappearance of water for some time. Heidi Artley told me about the problem and offered a few possible explanations, each of which calls for investigation. I'm not convinced that backwashing pipes and dumping tanks provides an adequate explanation.

With respect to dumping tanks, I was repeatedly told by the previous town manager that the water in the towers is just there for storage and is not, by design, included in the circulation. Therefore the water loses its treatment and has to be dumped after awhile. I recently learned from the County's engineer that when this happens, as in the case of the County's Kershaw Road tank, it indicates an imbalance in the system. They plan to correct the Kershaw Road problem when they install the new water tank at Arapaho. Maybe we should have a new engineer check out our system.

Funny Stuff

There's some funny (odd) stuff going on at Town Hall lately. The most interesting oddities seem to be completely ignored by our local investigative reporters. Wonder why?

Thursday, January 7, 2010

Who Does the Auditor Work for?

So much nonsense has been uttered about Oriental's audit, I thought I'd try to clear the air
for the benefit of those few who read my blog.

The auditor works for the Town Board of Commissioners. He does not work for the town manager. The audit is, in effect, a report to the Town Board on the town's financial health and the effectiveness of its procedures. It needs to be thorough, for the benefit of the town.

During the last town board I pressed to replace our former auditor. The board voted unanimously to make the change.

I can't speak for the others, but here are my reasons:

1. Other elected officials in Eastern North Carolina advised that it is good practice to replace the auditor every three to five years;
2. Our former auditor had not noticed that our occupancy tax should be categorized as a restricted fund like Powell Bill funds, to be used only for specific purposes and therefore not to be counted as part of the town's unrestricted reserve fund;
3. Our auditor did not notice that the administrative fee the town charged the water fund had not been recalculated since 2001 and therefore the taxpayers were subsidizing water rate payers about $35,000 per year;
4. Our auditor did not noticed that the tourism board expenditures of occupancy tax funds were not being accounted for in our accounting software, but kept on a separate sheet of paper;
5. Our auditor didn't notice that the tourism board was "rolling over" funds from one budget year to the next;
6. Our auditor either did not notice or did not object to having a large "miscellaneous" line item in each department's budget, contibuting to sloppy bookkeeping and lack of budget discipline;
7. For the fiscal year ending June 30, 2008, the auditor provided the town on February 17, 2009 a list of 8 "Adjusting Journal Entries" for the Water Fund including 21 line items, totaling $241,330.44 with a net income effect of $81,273.36. Among the adjustments was one that increased net income by 3,503.48, labeled "Adjust cash to reconcile balance;"
8. On the same date the auditor provided 15 Adjusting Journal Entries for the Oriental General Fund consisting of 55 line items totaling $258,470.77, with a net income effect of $42,107.43;
9. The town received two complaints from the Local Government Commission about the lateness of the 2008 audit.

An audit should have addressed all of these problems.

When the auditor finally made his report of the 2008 audit to the Town Board in August 2009, more than a year after the end of the fiscal year that it covered, he made no mention of the Adjusting Journal Entries nor did he offer an explanation. Neither did he mention or explain the letter he received from the Local Government Commission directing him to make two changes before they would approve his final invoice and ordering three other less urgent corrections to the town's procedures.

I am not an accountant and can't say whether the AJE's complied with Generally Accepted Accounting Practices, but they looked a lot like gun decking to me. (See earlier post).

In late summer of 2008, our town manager at the time assured the Town Board that he had looked, and concluded that our existing firm of Seiler, Zachman & Associates offered the best deal available, even though they had just increased their fee by $3,000. He recommended we continue with them, and the Board approved his recommendation.

There seemed no reason at the time to question that judgment. By the summer of 2009, however, I was convinced that changing auditors was a matter of urgency.

I asked the new town manager to investigate whether it would be possible to retain a new auditor in time for him to audit our books for 2008 - 2009. He consulted a number of experienced people for recommendations, including a CPA who formerly resided in Oriental and served on the Town Board. He contacted three or four recommended firms and found that Pittard, Perry & Crone would agree to do the job in a timely fashion at a lower price than Seiler, Zachman & Associates (now Seiler, Singleton) had been charging. One of the attractive features of the service provided is that the Pittard, Perry & Crone auditor, Chris Burton, planned to come to Oriental to perform the audit, rather than perform it remotely as Seiler, Singleton did. The procedure for previous audits was that then town manager Wyatt Cutler personally delivered the town's documents to Mr. Singleton's office in Little Washington. A few years ago one of the town commissioners asked Mr. Cutler "you mean the auditor doesn't come here?" Mr. Cutler replied that wasn't necessary.

When I learned that we would be able to change auditors, Candy Bohmert and I called a special meeting. The town manager briefed the board, and Commissioner Styron moved that we hire Pittard, Perry & Crone. I think that unanimous decision was the right one.

Wednesday, January 6, 2010


One of the earliest skills I learned in the navy was "gundecking." That was the practice of running off to a quiet secluded compartment and making up records ("logs") just before an inspection. These were invariably logs that were supposed to be maintained on a real time basis, but that had been overlooked. It was a kind of petty dishonesty. Sometimes more than petty.

There was an art to gundecking. Those unskilled in the art would have one person make the entries and use the same pencil or pen. Those more skilled would change the writing instrument from time to time and leave a smudge or two on the log book. Gundecking would seem more plausible if the entries were made in at least three different hands.

Sailors (and officers) who gundecked records always had ample justification. Records hadn't been kept in real time because they had more urgent tasks. Doing the job was more important than all that pesky paperwork. The ship had to be painted. The guns had to be fired. Collecting empty brass and accounting for it was an annoyance. Besides, with fifty or a hundred pounds of brass, you could have the whole ship painted in Hong Kong. Surely that was more important. The crew was too small for all that paperwork, anyhow.

So usage data wasn't accurate and the Supply Officer didn't know what to order. We could make up the difference with cumshaw. What does cumshaw mean? Watch "Operation Petticoat."