Home Government Blowing Rock Will BRCA lose its charter?

Will BRCA lose its charter?

By David Rogers. June 21, 2019. BLOWING ROCK, NC – Human beings in every civilized society are frequently found to push the boundaries between right and wrong. I imagine I am not alone when, as a child, I pushed my parents to the limits of their tolerance – but it didn’t take too many spankings for me to learn the consequences of inappropriate behavior. My siblings may not admit it, but they weren’t quite as quick to learn. They often seemed to throw temper tantrums when “caught.”

Blowing Rock Civic Association (BRCA), to its leadership team’s credit, started out with noble goals as a non-profit organization, a chartered 501(c)(3), aimed at keeping the Blowing Rock community informed and serving as a platform for ideas. At the time of its formation in May 2015, we even applauded the organization giving some kind of voice to the seasonal residents who may not be voters, but pay property taxes to help fund the town government. CLICK HERE to read our May 30, 2015 coverage of BRCA’s first meeting.

We thank BRCA for whatever early influence they had in getting the U.S. 321 project accelerated toward completion. Blowing Rock News even co-sponsored and helped orchestrate with BRCA their first Candidates Forum because we thought it to be a better format — even if we pulled out of that alliance for its second forum because of what we considered wrongdoing on BRCA’s part in promoting an artist’s representation of a previous project. They touted it as accurate and to scale when it was grossly distorted — and the artist even admitted to me that it was not intended to be represented as accurate and to scale because of materials he had been given to work with in producing the graphic.

Sadly, BRCA may have morphed into a darker organization and, by many accounts, runs the risk of losing its non-profit charter largely because of what appears to be its increasing political activism. Even worse, their activism often appears to include campaigns of misinformation, such as what prompted Blowing Rock News to end any association with the organization. Once the lack of accuracy was verified in our talking with the artist, we asked BRCA leadership to stop parading the rendering around as accurate and to scale. They declined our request and continued, so we ended the relationship.

Given BRCA’s recent actions, the accounts and concerns by others may ring truer than the organization’s leadership team would like to hear.

Laying Bare the Facts

Quoting from a posting on the Internal Revenue Service website, “Exemption Requirements – 501(c)(3) Organizations” (the IRS text is inset, our comments follow each section):

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.

Read with care the restriction on exempt organizations: they cannot be action organizations. That said, let me say at the outset that I am not an attorney and would never presume to judge the merits of a situation or issue except as a reasonably intelligent layperson.

Most outside observers communicating with Blowing Rock News allege that BRCA has clearly violated this restriction in its very specific campaign against the approval of the Rainey Lodge conditional use permit application, as well as its earlier campaign in marshaling active and vocal resistance to the Blowing Rock Planning Board’s proposed changes to the Land Use Code. With Rainey Lodge, BRCA’s leadership did not simply try to point out to the public its interpretation of where the CUP applicant’s plan did not conform to the Land Use Code. Instead, because BRCA did not have legal standing to directly participate in the state-mandated, quasi-judicial process governing CUP applications, in their own communications posted on their website, they admit to “assisting” a group of neighboring property owners in hiring legal counsel, a group that may or may not have been financially able to hire their own legal representation.  The purpose of this ACTION was to influence the Board of Commissioners’ vote on the relevant CUP permit’s legislative approval or disapproval.

Let’s be clear: we are not advocating here for or against approval or disapproval of the Rainey Lodge CUP application. We are merely using this issue to point out what several people allege is an example of BRCA’s overstepping its 501(c)(3) regulatory bounds.

Whether voluntary or forced, recusal of a public official from a proceeding is hardly unprecedented.

A Political Handmaiden?

Moreover, in website postings and member communications that are frequently forwarded by several BRCA members to Blowing Rock News, BRCA leadership has been editorially outraged at the involuntary recusal of Commissioner Sue Sweeting from the Rainey Lodge related public hearing. In a June 12, 2019 posting (a day after the final decision of Rainey Lodge), BRCA calls her forced recusal by the other commissioners’ majority vote “unprecedented” and refers to Sweeting in print as “outstanding.”

In reality, Sweeting was an unwitting victim of her own (un)doing after accidentally admitting during the April town council meeting that she engaged in ex parte communications with someone outside of the quasi-judicial process, which is a clear violation of state law governing the CUP process. Sweeting was given the opportunity to voluntarily recuse herself but refused to do so. Instead, she put her fellow commissioners in the awkward position of having to force her recusal when they were presented with the clearly incriminating evidence provided by attorney Chelsea Garrett of di Santi Watson et al, representing the developer.

Whether voluntary or forced, recusal of a public official (judge, commissioner, mayor, or whomever) is hardly unprecedented. It is a matter of ETHICS and a means to protect either or both sides of a municipal decision-making process. Recusal happens all across the United States, even in Blowing Rock. Put in the search term, “recusal of a commissioner,” for instance, and in less than half a second Google produced for us more than a 151,000 search results. Typing in “forced recusal of a commissioner in municipal government,” and in less than three-quarters of a second Google produced 5.9 million articles that might shed light on the subject.

It is misplaced grandstanding to call recusal, forced or otherwise, unprecedented. It is rarer for a sitting commissioner or judge to be so prideful or even vocally critical of the state-mandated process as Sweeting appeared to be during the May meeting. Often times, even before presented with the evidence implicating their wrongdoing, they voluntarily recuse themselves. Simply put, no one is above the law in this country, not even Sweeting or the BRCA.

What BRCA’s active and vocal defense of Sweeting suggests is that the leadership team is apparently very involved, politically, in supporting her as their candidate or current member of Town Council. It would not surprise this reporter if her ex parte communications before the Rainey Lodge CUP public hearings included one or more conversations (phone or in person) or email communications with BRCA leadership. But of course, that is speculation and cannot be proven at this point. We can only hope that her publicly documented transgression was a one-off occurrence — even if we doubt it.

Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.

Unlike more typical 501(c)(3) organizations serving Blowing Rock, such as the Village Foundation, Blowing Rock Community Foundation, The Rotary Club of Blowing Rock, the Blowing Rock Chamber of Commerce, the Blowing Rock Historical Society and the Blowing Rock Women’s Club, there is no indication that BRCA is contributing to charitable endeavors. BRCA may very well have paid professionals to speak on certain topics or, as in the case of Rainey Lodge, assisted in hiring an attorney to speak against the development, but to our knowledge not one dime of the monies raised by BRCA have been distributed as college scholarships, grants to charitable causes, or gone to help fund either public or private capital projects in the community — all of which would be much more noble endeavors than the activities in which BRCA leadership is currently engaged.

In contrast, Rotary largely funded the new, expanded gazebo in Memorial Park and earlier funded the construction of the Pavilion by Davant Field and the stage in the Annie Cannon Gardens, among other local projects. Rotary also gives college scholarships. Rotary is comprised of volunteers undertaking fundraising projects — and 100% of the monies raised goes back into the community as scholarships, charitable grants, or capital projects.

The Chamber of Commerce is using resources to develop educational programs promoting STEM (science, technology, engineering, and mathematics), as well as entrepreneurship among students at Blowing Rock School.

The Historical Society aided the renovation of the historic Edgewood Cottage and runs 1888 Museum, as well as the historical marker program every year, among other local projects. The Village Foundation raised money for the plaza intersection of Laurel Lane and Main Street and is always on the lookout for other community-serving improvements. Blowing Rock Community Foundation, over the years, has awarded almost $1 million in scholarships to deserving Blowing Rock students.

In reviewing the GuideStar website, which maintains publicly available records (for a fee, that we paid) on the finances and activities of more than a million non-profit organizations (including almost 52,000 in North Carolina alone), the last fiscal year for which tax filings are available is 2017. GuideStar reports that Blowing Rock Civic Association raised $24,808 in 2017 and had year-end “assets or fund balance” of $40,119. While the IRS Form 990 for 2018 is not yet available as filed on the GuideStar website, we have to assume that at least some of the numbers are available to the database because the summary directory listing for BRCA reports gross receipts as $25,713 and an assets/fund balance as $57,248.

Now if it is true that BRCA realized gross contributions (they have no other source of revenue) of $25,713 and an increase in cash reserves of $17,129 during 2018, it begs the question: What is BRCA’s money being spent on, that difference of more than $8,000? Legal fees to fight developments they personally oppose? Paid, supposedly expert witnesses to fight those projects, even when one or more of them is dismissed as not expert at all? Paid consultants to make presentations about what they think Blowing Rock should look like? A few bucks a month to pay a hosting company for their website-based propaganda? It is somewhat alarming to find in BRCA’s 2017 IRS Form 990 filing that over 53% of the organization’s expenses that year were identified simply as “Other Expenses,” which is usually an expense category reserved for catching miscellaneous expenditures that don’t fit on any of the other six categories of expense line items. And since 2019 fiscal year has not yet even run its course, the expenses related to BRCA’s anti-Rainey Lodge campaign are not transparently available.

Also: Why is BRCA building the cash reserves? There is nothing in their mission statements filed in the GuideStar database about building an endowment fund. And why is Blowing Rock Civic Association’s official address listed as in Charlotte, rather than in the town it is supposedly serving?

The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization’s net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.

Other than the historical Form 990 IRS filings, we do not have access to the BRCA books and records so do not have any evidence of wrongdoing by BRCA leadership. We simply do not know where the organization’s money is spent but hope it is not being operated for the benefit of private interests. That would be a betrayal of BRCA members, as well as a betrayal of Blowing Rock voters’ trust.

What Is The Real Agenda?

Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct. For a detailed discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying Issues; for more information about political activities of charities, see the FY-2002 CPE topic Election Year Issues.

Further reading on how much in the way lobbying activities in which 501(c)(3) organizations may engage are found in other documents and postings on the Internal Revenue Service website. It uses what some might call an ambiguous term in saying that the exempt organization cannot have a “substantial part” of its activities be lobbying or be engaged in trying to influence legislation, even on a municipal level.

We’ll leave it to others to decide whether or not BRCA’s lobbying or political activism is a “substantial part” of its mission and activities, but we will point out that at least 80% of the organization’s postings under “NEWS” at www.brcivic.com since about January of this year are critical of either the then proposed Rainey Lodge project or the Planning Board’s proposed changes to the Land Use Code. For those wanting a more comprehensive understanding of these restrictions and a lot of the history behind them, please  go to https://www.irs.gov/pub/irs-tege/eotopicp97.pdf.

SIDE NOTE: BRCA loudly opposed the Planning Board’s proposed changes to Blowing Rock’s Land Use Code, but if those changes had been adopted by Town Council, the Rainey Lodge project as proposed and approved would not have conformed to the new code and would have been disallowed unless variances were successfully obtained.  Now if that isn’t the height of irony…

More than likely, the general membership of the BRCA is unaware and thus unconcerned about the organization’s outspoken advocacy — and its potential impact on what are meant to be tax-deductible contributions to the organization. Unfortunately, the direction of the BRCA’s leadership appears to be divisive and destructive to Blowing Rock’s body politic and the community as a whole.  We are also aware of at least three individuals with stated intentions to bring the BRCA’s glaring political activism to the attention of the IRS for a review of its activities’ appropriateness in light of the regulatory limitations written into law.

The CUP process most often provides a measure of protection to existing constituent interests against unbridled development.

In some of its postings and communications, BRCA has been critical of the Blowing Rock commissioners who respect the state-mandated, quasi-judicial proceedings. In other postings or communications, including in the opening paragraph of a letter to the editor of HCPress.com dated May 20, 2019, it has referred to the CUP process and the Planning Department staff members as being biased toward developers, in general.

In both cases, BRCA is, at best, being naïve in its misrepresentation.  The CUP process has been time-tested over many decades, in many different municipal jurisdictions across the United States. In most municipalities, where implemented dispassionately by town staff and elected officials it provides a measure of protection against unbridled development.

As for the Planning Department staff and their respective roles in the CUP process, they are NOT biased toward developers. Their jobs are actually to insure that any proposed development’s plans conform to the town’s Land Use Code. Where those plans do not conform, they point out those deficiencies and tell the developer that if they proceed with such a plan they will have to ask first the Planning Board and then, ultimately, the Board of Commissioners for the appropriate variance(s).

If anyone has a problem with a particular decision regarding an approved development project, then they need to go to the powers that be who are responsible for managing the Land Use Code, i.e. Town Council. Either muster enough political clout to change the code entirely or make the appropriate section’s language less ambiguous. But to be publicly critical of the Planning staff for simply doing their jobs that make sure projects conform to Code…well that is just disingenuous and wrong, in my opinion. Just because a decision doesn’t go the way you think it should have gone, it is childish to throw a temper tantrum and claim that the system is crooked.

BRCA may have had good intentions at the start, but it appears to have evolved as a judgmental, “we are smarter than you because we are from Charlotte” organization. That is the height of arrogance because our community is comprised of many different people from many different walks of life and from many different places.

Blowing Rock is blessed with the highest concentration of smart, innovative, creative and passionately caring people per capita than any other place I have lived – and over almost seven decades that list of residences includes New York City, Los Angeles, San Diego, San Francisco, Newport Beach, La Jolla, Bakersfield, Chicago and, yes, Charlotte.

The Blowing Rock community includes hundreds of highly intelligent natives, so-called “locals” who grew up here and might very well have a more vested interest in what happens to this place than anyone else in town. The community also includes hundreds of “immigrants,” like me and those people from Charlotte, Florida, or wherever, who found this little corner of Mother Nature’s heaven and want to protect it, too, even if not with what many consider to be the often regressive mindset of BRCA’s leadership.

And that is how we see it.

5 COMMENTS

  1. Your article is filled with many inaccurate assumptions and borderline slanderous. I would expect better from this site.
    I know many of the people associated with BRCA and they only have the best interest in mind for Blowing Rock.
    Furthermore, all they did and continue to do, is make the details public so the public can decide. They don’t take sides. Since, the town is basically taxation within representation… it is good to be kept informed.

  2. Editor Rogers,
    Sue Sweeting is one finest town commissioners Blowing Rock has ever had. Your blast at her a few weeks ago was way off base.
    Sue, along with virtually every Blowing Rock resident wants to keep creeping development out of downtown. Take a look at downtown Boone and see how such original “elite” housing has turned into student rented flophouses. Big money developers have been aiming at our unique municipality for years. May they be rebuffed once again.

    • Mr. Thomas,

      Thank-you for expressing your opinion. It is one thing for a commissioner to aspire to keep unbridled development from creeping into downtown, but it is quite another for any elected official to irresponsibly thumb their nose at the law in the process and then to criticize the law because they get caught, as did Ms. Sweeting, and which the other sitting commissioners recognized in forcing her recusal from the Rainey Lodge CUP hearing.

      As for your other issue, I don’t think anyone wants Main Street or Valley Blvd. to evolve as have U.S. 321 going through either Lenoir or parts of Boone (largely because of university student housing shortages). Given what some might call the unbridled growth of App State over at least the last two decades, Boone has a different market driver and related development challenges that, thankfully, Blowing Rock does not share. Our market drivers are very different and SHOULD be more manageable if only we elect officials who are forward-thinking in how to protect and preserve while also nurturing a thriving economic environment that does not result in undue property tax increases (to keep paying the town bills).

      Again, thanks for your sharing your viewpoint.

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