North Carolina dissolves town of East Laurinburg over poor finances

State - Regional

RALEIGH, N.C. (WBTW) — The government of a small Scotland County town has been dissolved because of its poor finances, officials said.

East Laurinburg will no longer be an incorporated municipality after June 30 following a unanimous vote on Tuesday by North Carolina’s Local Government Commission. It’s the first time the commission has exercised new statutory powers that allows it to revoke the charters of local governments that are in fiscal distress and unable to sustain operations, according to a news release from the North Carolina Department of State Treasurer.

The state’s General Assembly could veto the action, but there has been no indication that that will happen. The commission is charged by state Treasurer Dale R. Folwell and staffed by the treasurer’s office.

According to the release, the commission “determined … that the city’s financial affairs are not sufficiently stable to continue operations” and that “it is in the best interest of the city and state to transfer the assets, liabilities and other obligations of the town to local government partner(s). Senate Bill 314, the law allowing the commission to repeal local government charters, was signed by the governor on Aug. 30.

“It is with deep regret that we must take this action, which we tried to avoid for many years by offering every assistance possible to East Laurinburg to correct numerous financial, budgetary and operational deficiencies,” Folwell said. “In the end, they did not fully avail themselves of our staff’s expertise or demonstrate the resolve to make the tough choices that were necessary to be a viable municipal government.”

The treasurer said maintaining taxpayers’ confidence that their elected leaders are serving as good stewards of their money is of paramount importance. That public trust has been tarnished by ineffective governance, lack of transparency and little accountability.

The commission voted in November to impound the town’s books and assume full control of its finances due to major bookkeeping, banking and auditing deficiencies. 

East Laurinburg failed for years to file required annual audits or to establish and maintain a proper accounting system needed to track finances and operate under a balanced budget ordinance, the news release said. A state audit found apparent embezzlement by a former town finance officer whose mother, a town council member, co-signed illicit checks. In a recent election, the mayor and all three town council members were write-in candidates. Only one candidate had filed to run for office.

Although East Laurinburg provides no essential services to its citizens, it does operate streetlights and administers a contract for trash pickup. The commission is in discussions with Scotland County officials to assume control of these services.

The town was first incorporated in 1903 as Scotland Village after timber cottages sprang up in the area. It was renamed East Laurinburg and its charter was amended in 1909. It was once a thriving textile town.

“East Laurinburg will retain its character, charm, sense of history and community pride whether it is incorporated or not,” Folwell said. “Many such vibrant, unincorporated communities exist throughout the state.”

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