Spring Lake manager process in limbo after NC treasurer objects to embattled candidate

SPRING LAKE — The Spring Lake Board of Aldermen’s choice for a new town manager is in jeopardy after the state treasurer said Thursday that he will not approve funds for the hire.

The board voted 3-2 on Monday to offer the town manager position to Justine Jones.

A statement released by State Treasurer Dale R. Folwell’s office cited “statutory authority” and the Local Government Commission’s financial oversight of Spring Lake as reasons for not approving funds for the town to hire Jones. Folwell said in the statement that state officials want to return Spring Lake to financial health and operational stability.

“New and unsettling information has come to light about the past employment history of the individual who was offered the job,” Folwell said. “That information does not generate confidence that she is the right fit at this time to lead Spring Lake.”

More:Spring Lake set to hire town manager who was fired in Kenly

Folwell referred to Jones' tenure as town manager in Kenly and her employment in Richland County, South Carolina.

The Kenly Town Council voted to end Jones’ contract with the town after the entire police force and several other employees resigned. Jones was accused of creating a toxic work environment, but an investigation by the town reportedly did not find that.

The statement from Folwell’s office said Jones had a “rocky employment relationship” with the South Carolina county.

“After Richland County terminated her employment, Jones filed an Equal Employment Opportunity Commission complaint that was dismissed, and then sued the county,” it said.

Folwell said his disapproval for the hiring of Jones was based on concern over potential legal and financial liabilities and the potential adverse impact on town morale.

“The town does not need a distraction from the important work they are doing to return the town to fiscal health,” he said.

Treasurer's statement surprises Spring Lake mayor

Spring Lake Mayor Kia Anthony appeared to be blindsided by Folwell’s decision. She said she found out about it from a news report.

“We had no idea,” she said. “No emails. No calls.”

Anthony said she talked to Folwell briefly. The treasurer told her he’d send her the press release and would call her back.

Anthony said Jones volunteered information about her previous employment to Spring Lake officials during the interview process.

“She disclosed everything to us,” Anthony said.

Jones was not found to have done anything wrong in Kenly or in Richland County, Anthony said.

“How dare we hold someone’s past over her,” she said.

Anthony said Jones was chosen to be manager in Kenly from a field of 30 and was among six candidates for manager in Spring Lake.

“Are we all wrong?” Anthony said.

The town has recently received “rave reviews” from state officials about how well the town is progressing. She said the situation hurts her heart because she had high hopes for working with the Local Government Commission to move Spring Lake forward.

“It seems like Dale Folwell is hellbent on holding us back,” Anthony said.

More:Spring Lake approved for loan, and mystery of missing vehicles might have been solved

When asked what the town would do next, Anthony said she would wait to hear back from Folwell.

“I hope Treasurer Folwell and I can come to an understanding,” she said.

Town's fire chief serving as acting manager

If Folwell sticks to his decision it likely will scuttle Spring Lake’s plans for Jones to begin her tenure on Oct. 24. Interim Town Manager Joe Durham’s contract ended a few weeks ago. The Board of Aldermen voted unanimously on Monday to name Fire Chief Jason Williams as acting town manager.

Jones, who was negotiating contract terms with the town, will have to wait for the issue to be settled. She dealt with difficult circumstances in Kenly over the summer.

In late August, Jones was ousted as town manager of the small Johnston County town by a 3-2 vote. Less than six weeks later she was offered the same position in Spring Lake, a town five times as large, by the same vote.

Jones left behind a controversy in Kenly that made national headlines. She was set to take over management of a town that has found itself the subject of numerous unfavorable news stories over the past decade.

The question is whether Jones’ leadership abilities and a likely desire to prove herself after a hurtful termination would help her conquer the enormous task of rebuilding a town government that has suffered from numerous incidents of financial wrongdoing in recent years.

Jones said in response to an email asking for an interview that she couldn’t comment because the ongoing contract negotiations.

High-profile controversy with racial overtones

The decision by the Kenly Town Council to end Jones’ contract as town manager came after more than a month of turmoil that started when the town’s entire police force and two other employees resigned. The resignations came with allegations that Jones created a toxic work environment.

The abrupt departure of the officers and employees caught the attention of media outlets, including CNN. The network quoted town residents who wondered if the dispute involved racial issues, noting Jones is Black and all members of the police force were white.

Jones wouldn’t comment about the issue to CNN, but speakers at a rally of Jones’ supporters after she was fired said race and gender played roles in the termination, according to a report by WRAL.

At the rally, Hoke County Commissioner Allen Thomas referenced a comment by Kenly Mayor "Tooie" Hales, who had told WRAL News that Jones wasn’t a good fit for the town.

"You see, Black folks have been hearing we weren't a good fit all our lives," Thomas said.

The Raleigh News & Observer also reported that town residents believed race was an issue in Jones’ firing. The vote to terminate her contract also was split along racial lines, the newspaper reported.

Jones told the N&O in a separate report that her goal had been to represent Kenly in the best possible manner.

Kenly Town Attorney Chip Hewett told the newspaper that an investigation found no evidence that Jones had created a hostile work environment.

Hewett told WRAL that the results of the investigation did not result in Jones being fired. Race also was not a factor, he said.

Hewett could not be reached for further comment.

Hales said in a short phone interview that he wished Jones the best.

“I hope things work out for her,” he said.

Hales referred further questions to Hewett.

Kenly issue not a major factor in opposition

The controversy in Kenly played no role in the reason one Spring Lake alderman voted against her and wasn’t the main reason for another board member’s no vote.

Aldermen Marvin Lackman and Raul Palacios voted against a motion to hire Jones that was made by Alderwoman Adrian Jones Thompson. Alderwoman Sona L. Cooper seconded the motion, which also got Mayor Pro Tem Robyn Chadwick’s vote.

Palacios said Tuesday that while it would have been best if there was no controversy in Jones’ previous job, “that played no part in my decision.”

Another candidate considered by the town was more experienced, Palacios said.

Lackman said experience was the main reason he favored the other candidate, but he said he also took into account Jones’ “checkered past.” She went from a 5-0 vote by the Kenly Town Council to hire her to a 3-2 vote to end her contract less than 90 days later, he said.

“It did play a factor in my vote, but I will say the other person was much more qualified,” he said. “Really, the main thing is the qualification.”

Lackman said the other candidate knew about Spring Lake’s history and was “very in tune” with what the town needed.

Spring Lake remains in somewhat of a “fragile state,” Lackman said.

The North Carolina Local Government Commission took control of Spring Lake’s finances a year ago after state officials became concerned that the town might default on its debts.

“We’re just trying to come out of that,” Lackman said.

Spring Lake's history of financial problems

Spring Lake has faced a number of financial problems in recent years

The move by the Local Government Commission in October 2021 included a direction to its secretary, Sharon Edmundson, to “impound the books and records of the Town, assume control of the finances of the Town and oversee and direct all its financial affairs.” The commission has a statutory duty to monitor the financial well-being of more than 1,100 local government units in North Carolina.

The commission has handled the town’s financial issues since then. David Erwin, who works in the Department of State Treasurer’s State and Local Government Finance Division, has been serving as the town’s finance officer.

Spring Lake entered into a financial accountability agreement with the commission. The agreement was updated last month after the town made progress on goals, according to town officials.

Spring Lake Mayor Kia Anthony said that after Jones is hired, the town will only have to hire a finance director and financial staff members to fulfill the agreement’s goals.

The town has received a number of promising financial updates this year, but in March North Carolina State Auditor Beth Wood released a report regarding an investigation into the town’s finances.

The investigation found evidence of significant wrongdoing involving more than a half-million dollars of Spring Lake’s money.

The report showed that the town’s former accounting technician, who also served as Spring Lake’s finance director for more than a year, used at least $430,112 of the town’s money for personal use.

Gay Tucker, the former finance director, pleaded guilty last month to embezzling more than $500,000 from the town.

Other findings in the auditor’s report included Spring Lake employees spending more than $100,000 of the town’s money on questionable credit card purchases and that at least $36,400 collected by the town revenue and recreation departments was not deposited into Spring Lake’s bank account.

The report also included details of an overpayment of $9,900 to the town’s former economic development director for his monthly cell phone stipend and the failure to safeguard town vehicles. It also said the Spring Lake board did not keep minutes of some closed meetings in 2019 and 2020.

Town officials accepted the report and its findings, but the town’s response to the report worried state officials, including Wood, who said in an appendix to the report that the town’s response was incomplete.

State officials said Spring Lake’s response led to fears that the town is repeating a mistake made after a similar report that was issued six years earlier.

In 2016, the auditor’s office released an investigative report that focused on the use of town credit cards. That report said Spring Lake employees and three members of the board made 1,448 credit card purchases that spent more than $122,000 over five years that appeared to be unrelated to town business.

The SBI and the Cumberland County District Attorney’s Office determined in that case that further criminal investigation or prosecution was not warranted.

Anthony said she feels confident about Jones’ ability to lead the town. She said she doesn’t believe town employees will have issues with her because five department heads took part in an interview with her.

“They were highly impressed by the level of respect that she had for each of them,” Anthony said. “They see her as a leader who is not just a good fit, but the right fit.”

Anthony said Jones should not experience any race related issues in Spring Lake because of the diversity on the town board and in the town’s employees and residents.

“I do not foresee any problems,” Anthony said.

It remains to be seen whether Folwell’s opinion will throw the whole process off track.

Staff writer Steve DeVane can be reached at sdevane@fayobserver.com.

This article originally appeared on The Fayetteville Observer: NC treasurer says he won't support Spring Lake's choice for manager