East Laurinburg mayor claims NC is wrongfully 'punishing' town after dissolving its charter

North Carolina Treasurer Dale Folwell, chair of the commission that controls East Laurinburg's finances, said there are "thousands of dollars that have been misappropriated or made to be missing."

"We have been having difficulty getting actual audits from East Laurinburg so we can verify to the citizens who pay property taxes in that community, that the money they paid into the city is going to essential services," he said.

Audit: Official paid electric bill, bought stuff with Scotland town's money, with help from mom

The state is currently working to make sure that all the money that was previously unaccounted goes to the right place, whether that be money that East Laurinburg owes its residents or funds that its residents owe the town.

This would be the first time the commission has used its new power to revoke charters of local governments in fiscal distress. Under the law, the General Assembly could veto the action, but there is no indication that will happen.

The town has had problems with its finances for years. An audit conducted by the state this year found that the former finance director for East Laurinburg improperly spent more than $11,000 on things like her home utility bills, with some assistance from her mother.

The Scotland County town has a population of 300 and an annual budget of about $75,000. The improper spending caused the town's checking account to be overdrawn in August 2017 and again six months later, leading to $444 in bank fees, according to the audit.

East Laurinburg officials said they plan to pursue criminal charges against the former employee, who wasn't identified in the audit. The finance director was employed by East Laurinburg from December 2016 to March 2018, according to the audit.

"There is no tool in my toolbox that could have fixed East Laurinburg," Folwell said.

East Laurinburg has been incorporated since 1909. While it's the first town to have its charter yanked, its not the first town to have the state take charge of its finances.

Towns that also had to give up their finances to the state:

Small towns with dwindling populations can run into trouble paying their bills — and the pandemic made matters worse. But Folwell said gross mismanagement is what hounded East Laurinburg.

"When you don't have governance, and you don't have the competency to produce an audit, that's led us to where we are now," Folwell said.

The only services East Laurinburg provides are a few street lights and garbage pick-up.

East Laurinburg's newly-elected Mayor Gail Chavis said she will do everything to fight against the state's decision. She said the town has done everything the state has asked for to keep its charter. She believes the commission is punishing the town for "past mistakes that we have nothing to do with."

She asked the state to give them a chance, but she said they didn't. Chavis could be the last mayor of East Laurinburg.

"We're a community," she said. "We come together as a community. We don't want to lose our town."

East Laurinburg was founded as a village when Scotland Mill came to the area. It was composed almost entirely of villages with people who worked in the mill. Today, the town is filled with old mills houses, a couple of churches, an old schoolhouse and a Citgo station.

The pastor of one of those churches, East Laurinburg Baptist Church, fears without a charter, the town's identity will fray.

"It's just a community that takes care of each other," Richard Tyson said. "What will happen if we lose our identity is that we'll blend in with the county."

Folwell said that just because the town lost its charter does not mean it will lose its sense of community.

"Just because you're not incorporated does not mean you cannot continue to be a community," he said. "That's what I hope East Laurinbrurg will do."

Folwell expects that more financial distraught small towns will also have their charter dissolved soon.