Thursday, December 2, 2021

Statement from State Treasurer Dale R. Folwell, CPA, Regarding the Local Government Commission’s December Agenda and the Sale of the Bald Head Island Ferry System

Raleigh, NC
Dec 2, 2021

In a letter a few weeks ago, State Auditor Beth Wood insisted that applications to purchase the Bald Head Island ferry (System) by the Village of Bald Head Island (Village) and the Bald Head Island Transportation Authority (Authority) not be included in the December Local Government Commission (LGC) agenda.

One of the many reasons cited was that members of the LGC are bound by law to consider the applications and assessed value of the property subject to taxation and that the amount of borrowing is adequate and not excessive.

I want to note that this ferry system is owned by a family from Texas who chose the broker, lawyers, investment bankers and, most importantly, both appraisers for the potential sale. In addition, a recent letter from the Authority stated that the family categorically refused to sell the System to the Village even after voters in November approved the authorization of General Obligation (GO) bonds to purchase the System.

Complicating the matter further, Governor Roy Cooper replaced all his appointees to the LGC less than 48 hours after the voters of the Village approved the GO bonds. While this is his right, his actions caused the loss of years of combined institutional knowledge on this transaction.

According to a study paid for by the seller, the System is a partially regulated monopoly. The passenger ferry is regulated but the parking and barges are not. Regulated or not, it is a public highway that uses boats instead of cars.

But for this privately owned “highway” system, residents, tourists and, most importantly, workers (a group which at times is six times larger than the other group) could not live, eat and work on the island.

There may be some that ride the ferry who are unaware of the difference in a partially regulated monopoly. They may not know what it means when the family states that they categorically refuse to sell the System to the Village, but they may sell it to Wall Street bankers. What they do know is how many hours per day they must work to ride the “highway.” 

For nearly 100 years, the treasurer as LGC chair has set the agenda. As chair, my goals have never changed: governance, transparency and, to the Auditor’s letter, a correct valuation that brings reasonable price certainty to the average blue-collar worker is paramount.

The LGC deserves a side-by-side open comparison of the applications submitted by the Village and the Authority.

If there is going to be a transfer of wealth from working people to the family through higher tolls, then the commission deserves this comparison to properly fulfill its duties.

The LGC has never been faced with approving bonds for a ferry system. The LGC is uniquely able and enabled to not be bound by any particular special interest. I believe the LGC has a responsibility to “measure twice, and cut once,” and it is not intended to function as a “rubber stamp.”

Therefore, I intend to honor State Auditor Beth Wood’s request not to include any applications for the sale of the Bald Head Island Ferry System in the agenda for December’s Local Government Commission (LGC).