‘Free’ money comes with a price

By Tom Joyce - tjoyce@mtairynews.com
Holloway -
Anderson -

It looked like a good deal: Mount Airy hires a lobbyist to seek grants on its behalf at a cost of $1,000 per month, who soon secures a $1 million allocation from the state Legislature for the city.

However, it has now been learned that this money — targeted for infrastructure needs in town — apparently carries a bigger price tag than expected, another $100,000, according to the terms of a contract Mount Airy had forged with another entity in 2017.

And this has taken municipal officials by surprise.

“We made the contract that includes that, but I think it pretty much had been forgotten,” Commissioner Jim Armbrister said Tuesday of an agreement with Resource Institute Inc. in Winston-Salem entitling it to 10 percent of grant funding obtained.

“I think it set everybody back on the board when we learned that,” Armbrister added of the extra $100,000 obligation linked to the grant along with paying the lobbyist, Bryan Holloway.

The Mount Airy Board of Commissioners was briefed on this during its last meeting on Sept. 6, when the funding matter did not appear on the agenda for the regular part of the meeting. It wasn’t brought up at all before officials moved into a closed session at the end, and emerged only after they returned to open session later in the evening when citizens had left.

No action was taken on the issue, which Commissioner Armbrister said Tuesday is “a hard pill to swallow.”

Commissioner Jon Cawley agrees.

“It wasn’t until the last meeting that I knew that the Resource Institute was claiming that they were part of that group that secured that money,” Cawley said in reference to Holloway’s lobbying firm.

“This is five months after the fact,” he said of getting billed by Resource Institute.

He acknowledges that the contract with the organization says it is to receive 10 percent of grant monies awarded.

In recent years, the institute that works with localities to plan and fund projects to protect natural resources has secured $18 million to $20 million for Mount Airy for greenway and stream-restoration work, through efforts by Charles Anderson, a Research Institute representative.

“My problem at the last meeting was that Mr. Holloway never said anything about Resource Institute working with him to secure that grant,” Cawley said of the recent N.C. General Assembly allocation.

“I don’t know if he was just negligent or what,” the North Ward commissioner said. “I had heard at the last meeting that these guys (Holloway and Resource Institute) had worked together before.”

Lobbyist responds

No such relationship was mentioned by Holloway during two public presentations before the Mount Airy Board of Commissioners, at a meeting in May and another in June when he announced the $1 million appropriation.

Holloway, a former state legislator based in Raleigh, said Tuesday that he made no disclosures then about additional funding to Research Institute because he did not know about the 2017 contract requiring the 10-percent commission.

But the lobbyist said Mount Airy officials were fully aware of the fact that he also works closely with the institute on behalf of localities around the state.

“Barbara Jones absolutely knew I was a lobbyist for the Resource Institute as well,” Holloway said of the city manager. He also mentioned that Mayor David Rowe had been part of discussions in recent years about grant-seeking opportunities in which that relationship was clear.

“They had to have known,” Holloway said of city officials.

“I don’t think anything was purposely left out,” the city manager responded Tuesday afternoon.

The lobbyist said he does not stand to receive a penny from the additional $100,000.

“I don’t benefit from that,” he said. “I’m the guy caught in the middle of this.”

Holloway says the reason for the city having two entities working to seek grants on its behalf likely stemmed from a belief that he could provide additional, or more specialized, services than those supplied by the institute.

“Charles is your grant obtainer and fund-management person and Bryan is your lobbyist,” the city manager explained later Tuesday.

Cawley reluctant

Commissioner Cawley wants Resource Institute to show “visible proof ” about efforts it undertook to secure the $1 million allocation from the state.

Unless institute officials can do that, “I don’t see how we can give them 10 percent,” he said. “If the Resource Institute (helped) us secure that grant, I want to pay the 10 percent.”

Cawley said the fact Holloway and the institute work together shouldn’t mean an automatic 10 percent for the latter.

“We have to keep in mind with everything we do that this is not our money,” he said of such expenditures. “It’s the public’s money.”

Cawley thinks that before any other grants or allocations are sought by outside parties, city officials should become better informed.

“We need to know before the grant is awarded who’s doing what,” he remarked. ‘We just have to do better.”

Armbrister says the city government could have no choice but to pay the $100,000, since it might jeopardize millions of grant dollars those involved stand to obtain on its behalf in the future.

He described the situation as one in which “you’re durned if you do or durned if you don’t.”

Obligation unclear?

City council meeting minutes show that Holloway originally was hired to lobby for the $1 million to aid the Spencer’s redevelopment project downtown, involving transforming former textile-manufacturing facilities into new uses.

Holloway later announced that the money had no strings attached and could be used for any other infrastructure projects in the city, an option the board settled on during a June meeting in a 3-2 vote.

At last report, the $1 million had not been received, and Jones says the board hasn’t decided exactly how it will be spent.

Mount Airy has two contracts with Resource Institute, one to seek financial aid for river restoration and another for grants and other funding for the Spencer’s project to which the 10-percent charge applies.

Meetings from the Sept. 6 meeting show Jones told the commissioners that Anderson stated his organization did lobby for the $1 million along with Holloway. And he will be helping with upcoming paperwork for that money, she said Tuesday.

The city manager says the state allocation is still a good thing despite the extra $100,000 cost posed.

“It’s absolutely wonderful when we can get a million dollars coming to this community,” Jones remarked.

“I will say that this has been confusing,” she said of the process surrounding the $1 million appropriation.

“But we have gotten great results.”

Holloway
https://www.mtairynews.com/wp-content/uploads/2018/09/web1_Pay-this-1.jpgHolloway

Anderson
https://www.mtairynews.com/wp-content/uploads/2018/09/web1_Pay-this-2.jpgAnderson

By Tom Joyce

tjoyce@mtairynews.com

Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.

Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.