Surry County elected officials met at Mount Airy High School for their quarterly dinner, with state treasurer Dale Folwell as featured speaker on Thursday evening.
A tight schedule made Folwell a little late in arriving, but once at the podium, he pounded the assembled city and county officials with a barrage of facts, figures, statistics and percentages, aided by some audiovisual aids, including a copy of Harlan Boyles’ book “Keeper of the State Purse” and some charts.
Folwell started off by saying that North Carolina is in good shape as far as the issues concerning him and his job.
He stated that he manages $120 billion, the 26th largest pool of public money in the world, and that his primary concern is the average workers represented by the pension funds he manages. He also likes to poke Wall Street and Big Pharma, he said.
He then began reciting a laundry list of mismanagement greeting him upon taking over the state treasurer’s office, beginning with the $760 million in management fees paid to Wall Street the year before he took over, which was, he said, nearly as much in fees as it earned.
In order to correct the problem, he asked the money managers four questions. “Who are you? Where are you? How good are you? How much am I paying you?”
A prominent Wall Street money manager insisted on asking him a test question involving taillights and gas tanks on ‘51 Cadillacs before answering Folwell’s questions.
Folwell passed his test, in fact was the first person to do so. It is a little known fact that the gas tank on a ‘51 Cadillac is accessed through the taillight. But as the Wall Streeter had used up all of the time Folwell had allotted him in administering his test, Folwell told him, “It’s up to you to pass our test. It’s not up to us to pass your test,” and he moved on to the next person on his list.
“Signing other people’s contracts and not signing ours was the problem,” he explained.
He also explained that North Carolina pensions are funded at above 90 percent. Some other states fare much worse. Kentucky, one of the examples he cited, is funded at only 17%. He then told the group of elected officials that one of the best-funded pension plans in the United States deserved a round of applause, and moved on to the state health plan.
Here the news was not so good.
Folwell said that the amount of money spent on the state health plan was greater than that spent on the state university system, and also greater than the amount spent on the state justice system and public safety.
He spoke of the risk of over-paying health claims, and not having access to contracts, therefore not being able to access discounts.
Folwell held up a six-year-old report showing problems that had been answered by no auditors and no accountings.
Folwell said that even after consuming health care, no one can tell the value or price of it. It’s the only thing like that.
Two checks totalling $100 million were lost in the mail, he discovered while monitoring cash flow. They were missing for six weeks. Grilling staff on why that was wrong and how it could be fixed, and dismissing suggestions to switch from U.S. Postal Service to FedEx, the correct answer was to wire the money.
“We should not be mailing $100 million checks. It’s crazy,” he informed the Surry elected officials.
“It’s not emotional; it’s not political. It’s mathematical,” Folwell summed up.
After opening the floor to questions, Folwell was asked, “How long will it take to turn it around?”
“Like an onion, the more you peel it, the more it makes you cry,” was his initial answer. After some more discussion and additional numbers and percentages, the final answer was, “It’s going to take a while.”
Surry County Commissioner Larry Phillips asked, “Is there the capacity or will to issue a round of bonds?”
Folwell’s answer included a recitation of seven of his 21 constitutional duties, that a bill was in both House and Senate, that $2 billion in cash is lying untapped in the Highway Trust Fund, and to be careful of school leasing situations.
A question from Dr. Travis Reeves, superintendent of Surry County Schools, asked about lottery funds for schools. Folwell’s answer revealed that he did not vote for the lottery, it did not seem to him to be an ethical way of funding schools, the issue doesn’t come under the treasurer’s office, and that all of his fears about the lottery had come true.
Reach Bill Colvard at 336-415-4699.