By Richard Sullins | email@example.com
It’s a rare occurrence when a governing board revisits an issue it previously decided, but circumstances that surrounding the award of a $500,000 grant in federal funds to a group affiliated with a local church have become so murky that Lee County Commissioners on Monday looked back at the issue.
Democratic Commissioner Mark Lovick had requested a discussion not about the Life Springs Church or the Dream Center it proposes, “but about the internal process commissioners use to spend taxpayer money. This previous vote broke my rule about having time to pray over this and there was no reason to call for that type of vote to run it through in just one night when we haven’t had a chance to study it.”
The issue arose after commissioners voted 6-1 on November 14 to make the award to the Life Springs Action Team, an organization connected to the Life Springs Church on Keller-Andrews Road in Sanford and whose board of directors consists solely of church members.
Life Springs sought funding for its “Dream Center” program, a $1.3 million effort to combat human trafficking, assistance for those suffering from addiction, and reductions in the number of homeless persons by helping them to find employment.
The vote created controversy almost as soon as it was taken. LSAT had filed articles of incorporation with the N.C. Secretary of State’s office in July, but weeks went by before they applied to the Internal Revenue Service for designation as a 501(c)(3) approved nonprofit organization. LSAT did not have that letter of determination from the IRS at the time the commissioners awarded the funds and still doesn’t have it today.
An IRS designation as an approved 501(c)(3) entity allows an organization to be exempt from corporate taxes. But more importantly, it qualifies the group as a charity, making it eligible to apply for and receive grants and to declare that, with some restrictions, contributions it receives are tax deductible by the donor.
Democratic Commissioner Robert Reives believes that circumstance should disqualify LSAT from receiving any money from the county. The funds in question are part of the $12 million allotment that Lee County received as its share of COVID relief dollars from the American Rescue Plan Act passed under both the Trump and Biden administrations.
Reives said the issue should have been whether LSAT was even qualified to apply for the county grant. He asked County Manager Dr. John Crumpton if the organization has received approval by the IRS and Crumpton replied that they have not.
“Then, in my mind, you don’t qualify until you are an approved organization,” Reives answered.
LSAT’s lack of approved IRS nonprofit status came as a surprise to Republican Commissioner Bill Carver, who seemed to have confused the filing of articles of incorporation with the state with the submission of papers to the IRS for tax exempt status. Carver asked twice whether LSAT has been approved by the IRS, and twice Crumpton told him “no.”
Recusals that didn’t happen
Carver, along with former Republican Commissioner Arianna Lavallee, were central figures in having the grant made for the Dream Center project. At the November 14 meeting when the proposal made its first appearance, Crumpton recommended the commissioners study the proposal and be prepared to discuss it at one of the two meetings scheduled in December.
But Carver and Lavallee brushed aside Crumpton’s recommendation and held an immediate vote. Whatever the merits for skipping established procedures might have been, there is an additional piece of information now available that casts Carver and Lavallee’s votes in a very different light.
They both attend Life Springs Church.
Neither of them said so aloud to the other five commissioners present or to the public watching live or by video, nor did they seek to recuse themselves from the discussion and voting.
There are a number of state laws on the books related to conflict of interest and circumstances under which elected officials should seek recusal from voting because of the potential conflicts of interest. But not all of those laws apply to county commissioners.
Instead, a Code of Ethics adopted by Lee County Commissioners in 2010 is their moral north star. And unless a commissioner is a director, officer, or governing board member of a nonprofit with which the county is doing business, those ethics and conflicts of interest provisions do not apply.
But even in the absence of a legal requirement to recuse themselves from voting, Democratic Commissioner Cameron Sharpe said sometimes it can be the right thing to do simply from a moral standpoint.
“There is a better way that this should have been handled. I think (Republicans) should have talked to us before that night and I think we might all have been on board with this,” he said. “The two board members that actually go to Life Springs – Ms. Lavallee and Mr. Carver – you could have recused yourselves and we still could have voted in favor of this. It doesn’t have a good look to it in the media, because people are saying ‘you’ve got people on your board who are voting to give their own church $500,000 over three years,’ and now, I have to agree with that. The right thing to do would have been to disclose that you do go to Life Springs Church and recused yourselves. That way, we all wouldn’t look like a bunch of jacklegs in the media right now. I’m not suggesting there was anything illegal here at all. But it was borderline unethical.”
Crumpton told The Rant Tuesday night that commissioners can’t recuse themselves from votes, although they can ask to be recused by a majority vote – but only if state law “gives them a reason to do so.”
“In this case, there would be no legal justification for that to occur,” he said. “Mr. Carver sought an opinion on whether or not he had a conflict of interest, which under the law he did not.”
Other groups feel slighted
Lovick said Monday he has received “tons and tons” of calls and held many conversations with citizens representing other groups who want to know, “how do we get money like that?”
It’s a question that seems to be without an answer.
In December, The Rant asked the county for other proposals that might have been received in competition with LSAT and any advertisements posted for groups to take notice of. In response, the county provided a one-paragraph statement that said in part, “while the county did not formally release a request for proposals, some entities have reached out to the Board and/or staff hoping to receive some funding. Life Springs Action Team submitted a formal proposal, and that proposal was attached to the board’s agenda.”
Lovick took issue with that process.
“Any time we give money like this that is not already in the budget, I think there should be a public hearing,” he said. “I just think that we shouldn’t get in such a hurry like this to spend money before we’ve had time to think about it. For me, I want the opportunity to pray about it from now on before money is awarded. We owe it to ourselves and to the taxpayers, because the public should be involved in how we spend the taxpayer’s money.”
Lovick made it clear where he stands on rushing to open the county’s checkbook.
“If I don’t have time to investigate and pray about it, from now on, my vote is going to be a ‘no,'” he said.
Further, he asked that all documentation should be complete and in good order before being brought to the commissioners for consideration.
LSAT to withdraw proposal and reapply
Tuesday, the Life Springs Dream Center posted a video of pastors Dale Sauls and Daniel Owens in which they explained that they would withdraw their proposal and re-apply when their nonprofit status is approved.
Sauls explained in the video that LSAT is confident the nonprofit status would be approved, but decided they “wanted to take the pressure off (commissioners).”
“We’ve asked them to just let us reapply,” he said. “We still want them to invest in this vision … we may need to start over.”
What comes next
Barring some unforeseen circumstance, it seems likely that the IRS will probably approve LSAT’s application for tax exempt status. Assuming LSAT’s second application is approved for funding, the county would then have a green light to move forward with proposing a contract for the Dream Center that will govern the terms and conditions under which those dollars can be spent during the three-year life of the project. The contract would need a majority vote of the commissioners.
If Carver chooses to recuse himself, that leaves three Republicans and three Democrats. Sharpe and Lovick have said they support the program, but Reives still seems unmoved.
Reives wondered aloud whether LSAT’s application will stand if they’re ultimately approved by the IRS.
“If we did that, we would be telling the public that they can apply for money first, get approved by IRS later, and then have the award made. Let’s say that I am pulled over for speeding and I tell the officer that I don’t have a license yet, but I’m in driver training school.”
Carver said, “what is it that you are asking us to do?”
Reives replied, “the right thing.”