The N.C. General Assembly unanimously approved suspending Eureka’s town charter Thursday.
The suspended charter means all money and assets held by the town of Eureka will now be placed under the state treasurer and used only for the town. All money due to the town will be collected by the state treasurer.
N.C. Sen. James “Jim” Perry filed an amendment to House Bill 336 Tuesday to suspend the charter of Eureka for five years.
Perry and N.C. Rep. John Bell, who both represent Wayne County, said they hoped that by the state taking over the town, the deteriorating sewer system could be upgraded.
Perry said Eureka was in a difficult situation because of the burden the failing sewer system has put on the town.
“We had to find a solution to help them,” Perry said. “They were contacted by the Local Government Commission and knew a takeover would be imminent. Their finances were in dire shape. They knew there was no way out that they could afford.”
The town has approximately 200 residents.
By getting the legislation through the General Assembly quickly, it enabled Perry and Bell and the Local Government Commission to help the town, Perry said.
“That’s why we amended it to a bill that was already on the floor and had already passed the House and Senate,” he said. “That allowed us to increase the speed and provide the assistance. This is the first time it has been done in this manner. It got Eureka moved to the top of the Local Government Commission’s list.”
A suspended charter was needed to take the next step, Perry said.
The next step is getting legislation passed that will allow the Local Government Commission to work out Eureka’s utilities problem, installing new infrastructure and getting the funding to do that.
Perry said he and Bell and the Local Government Commission had a conference call with Eureka officials Thursday morning.
“Everyone was satisfied that progress is being made,” Perry said.
Perry’s call for the charter suspension came on the heels of a formal notice and warning by the Local Government Commission to the town of Eureka. At the commission’s June 4 meeting, a resolution was passed approving the notice that the town failed to maintain the proper level of fund balance or reserve funds.
Eureka used money from its fund balance, which was not legally available for at least the last five years, to balance its sewer fund.
Bell said Wednesday the sewer problems in Eureka have been ongoing for seven years.
“It has gotten to the point now that the town cannot maintain its sewer system,” Bell said.
The town of Fremont is now taking in Eureka’s wastewater and pumping it to Goldsboro to be processed.
“Fremont is being placed in a hardship having to cover that cost,” Bell said. “Eureka’s sewer system has been in shambles for a number of years, and it is causing residents to pay higher sewer rates.”
Tim Howell, director of public works in Fremont, said taking in Eureka’s wastewater since 2003 has been a strain on the town.
“They have a lot of I&I (inflow and infiltration in the sewer lines), and their sewer lines are in the water table,” he said. “So, any leaks they have means they are sending us a lot of groundwater.”
Bell said about three weeks ago representatives of the N.C. Department of State Treasurer and the Local Government Commission told him and Perry that it looked like the Local Government Commission would have to take control of Eureka because the town could not pay its bills.
Eureka Mayor Doug Booth said Thursday afternoon he knew why the suspension was done and thought in the long run the town would be in better shape.
“I understand the state will be able to help us with some of our situations, and that will be a good thing for the town of Eureka,” Booth said.
The suspension of the town charter was not really a surprise, he said.
“We really expected it,” Booth said. “We knew we were in some financial problems all because of the sewer situation. We knew one day it would come to this. We just didn’t know when it would happen.”
One of the stipulations of the legislation is that there will be no elections during the suspension. Booth said he didn’t think any of the five commissioners were up for re-election in November.
“One of the unique things about this board is each of the five board members, and including myself, were elected by write-in votes,” Booth said. “None of us ran for office.”