Treasurer Folwell Applauds State for Helping Tyrrell County, Town of Columbia Closing of Tyrrell Prison Put Local Governments at Risk of Loan Default, Utility and Property Tax Increases

(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, expressed appreciation today that the Cooper administration has answered his call by providing $323,504 to Tyrrell County and the Town of Columbia for estimated water and sewer system payments the state would have made had it not closed the Tyrrell Work Farm Prison Unit. He is urging Gov. Roy Cooper to reopen the prison to restore lost jobs and business-related tax revenue.

The N.C. Department of Public Safety (DPS) shuttered the facility in December 2019 to move corrections officers and other employees to prisons with high staff vacancy rates. The loss of several hundred jobs was economically devastating to the sparsely populated town and county. In addition, it put bond payments at risk because the prison accounted for about 30% of water and sewer fees collected. The local governments borrowed money to install infrastructure and equipment specifically to serve the prison, with the understanding it would be a long-term customer.

State Budget Director Charlie Perusse informed Tyrrell County Manager David Clegg by email Monday evening that the Office of State Budget and Management (OSBM) identified and authorized the transfer of DPS carryforward funds that would be used as grants-in-aid to the local governments. Of the total, $209,901 will go to Tyrrell County and $113,603 to Columbia. The assistance is expected to cover the annual debt service payments associated with the water system expansion serving the prison. Perusse directed DPS Secretary Erik Hooks to process the grants as soon as possible.

Treasurer Folwell thanked OSBM and DPS for assigning the money to Tyrrell County and Columbia, both of which are economically disadvantaged.

“As former Gov. Jim Martin always says, ‘Doing right is rarely wrong,’ ” Treasurer Folwell said. “This grant only covers one year of 32 years of bond payments remaining. Shutting the prison shot a 30-foot hole in the finances of the water and sewer system.”

Treasurer Folwell, who said the first duty of government is to do no harm, focused attention on the Tyrrell County prison situation due to heightened concern that the local governments were at risk of default on their loans through no fault of their own. That could have led the Local Government Commission (LGC) to take over the management of the county and town. The LGC was created in 1931 to address issues in local government finance that arose during the Great Depression. Since its inception, the LGC has provided consistent financial oversight for more than 1,300 units of government.

The Treasurer worked closely with state Sen. Bob Steinberg, Rep. Edward C. Goodwin, local leaders, the North Carolina Association of County Commissioners and the North Carolina League of Municipalities and said their support helped to solve the financial crisis caused by the prison closure.

The Department of State Treasurer’s State and Local Government Finance Division handles the sale and delivery of all state and local debt and monitors the repayment of state and local government debt. More information can be found at the LGC’s homepage.