News-Record.com

EDENTON (AP) — Chowan County commissioners have authorized an investigation into possible criminal wrongdoing that led to the county's $4.1 million budget shortfall.

The board voted Monday for the county attorney, John Morrison, to conduct the investigation and turn the findings over to the district attorney if warranted.

The state Local Government Commission says the northeastern North Carolina county's reserves dropped in recent years from more than $20 million to $3.4 million in June of last year. The commission says the reserve had dropped to $723,000 by June 30, 2008.

The state commission said the county had depleted its $29 million reserve fund by using the money to balance its budget or pay for capital projects.

More than 850 county residents attending the standing-room-only meeting cheered when the commissioners voted for the investigation.

Members of the board said they regretted that they were unaware of the county's financial condition until a new county manager was hired to replaced retired manager Cliff Copeland.

Morrison said the former manager told the board that reserves in 2008-09 would be $2.2 million, but it really was zero.

"... I apologize. I never read an audit and never asked for one," Commissioner Kenny Goodwin said before the vote.

County Manager Peter Rascoe, who took the job this summer, said the county didn't have enough money to pay its bills at the end of July and was running a deficit of $262,800.

Rascoe said the county had several options for dealing with its financial crisis, including a revenue shortfall of about $3.8 million.

Rascoe said the county could raise property taxes by 19 cents per $100 in assessed value.

The county could avoid a tax hike by cutting services so much that a community college satellite campus and the county parks and recreations department would be eliminated.

The manager said the best option would be to raise taxes 10 cents per $100 in valuation and cut 17 part-time and nine full-time jobs.