Claims Dept: Perdue on Moore and Parton

The claim: In recent weeks, Lt. Gov. Beverly Perdue’s campaign has claimed in news releases, its Web site and in a YouTube video that State Treasurer Richard Moore is responsible for the financial problems of an entertainment complex in Roanoke Rapids.

Moore and Perdue are both running for governor. The Perdue campaign also has claimed that Moore withheld a study that said the city’s plans for a theater featuring Randy Parton would fail without other attractions and that he failed to properly scrutinize the project.

The background: Since the city opened the $21.5 million theater, ticket sales have been paltry, questions have been raised about how Parton spent public money and Parton has been banned from the theater bearing his name. The amenities, such as a hotel and restaurants, called for in a feasibility study are not yet open.

What we found: As state treasurer, Moore is chairman of the Local Government Commission. The panel must approve all public debt in North Carolina.

The Local Government Commission was created in the Depression era when several North Carolina towns had overloaded themselves with debt. The commission has focused on narrow questions of whether a city or county could afford to pay back the money it intended to borrow. It has not questioned the wisdom of the city or county’s plans.

"They’ve never second-guessed saying, 'Are you sure this is a good deal?'" said David Lawrence, professor at the School of Government at UNC-Chapel Hill.

More after the jump.

—————

The Roanoke Rapids deal was not like most projects the commission considers. Because the city intended to pay back its debt using money generated by a successful entertainment complex, whether the project could succeed might have been a consideration. However, the city said that if the theater failed, it would pay off the debt with sales tax. That satisfied commission members, who say their rules allow them to consider the success of a project but do not require them to do so.

But Sen. Dan Clodfelter, a Mecklenberg County Democrat who was a key sponsor of the law that allowed the deals, said the commission’s rules misinterpret the law that allowed such financing arrangements. Lawmakers intended for the local government commission to decide whether a project had a good chance of success, he said.

Commission members did not see the feasibility study, which was reviewed by Moore’s staff, before they voted. The study was mentioned on an agenda but was not explained. Commission member and State Auditor Les Merritt said he wishes he had asked to see the feasibility study before he voted.

But Merritt said the commission trusted that the city could repay its debt since city officials pledged sales tax revenue if the theater didn't sell enough tickets.

"At the end of the day you've got to let the local officials have an ability to determine if a project is a good one or not," Merritt said.

Verdict on Perdue’s claims: Overreaching. Moore and other commission members did vote in favor of the project, but Roanoke Rapids was ultimately responsible for setting up the deal and pushing it forward. Commission members would have made a more informed decision had they read the feasibility study. But whether Moore and the commission should be required to consider such studies for future projects is an unresolved question.