Lenoir County settles administration building lawsuit using insurance funds, officials say
The Lenoir County Board of Commissioners on Jan. 5 approved a budget ordinance amendment related to the settlement of a lawsuit stemming from the renovation of the county administration building, with county officials repeatedly emphasizing that taxpayer dollars were not used.
Before the vote, County Manager Michael James read a prepared statement into the record to address public questions surrounding the matter.
“During the renovation of the County Administration Building, our contractor was unfortunately the victim of a sophisticated cyber crime in which fraudulent banking information was used to divert payments intended for legitimate work,” James said. “As a result, several payments were sent to a fraudulent account.”
James said the county participated in mediation on Oct. 22 with Barry Building Group, Dunn & Dalton Architects and DEVITA Engineering to avoid prolonged litigation.
“I’m pleased to report that this matter has now been fully resolved through an amicable settlement,” he said. “Importantly, no taxpayer dollars were used to resolve this case.”
After James’ statement, Chair Linda Rouse Sutton asked him to repeat the point.
“Would you repeat that, please?” Sutton said.
James responded, “That there was a fully resolved through an amicable settlement. Importantly, no taxpayer dollars were used to resolve this case.”
Finance Director Jennifer Barris explained the budget amendment, saying the $500,000 payment came from insurance proceeds that had been placed in the general fund while the case was pending.
“This $500,000 was funds that were received in the county from insurance coverage,” Barris said. “So these are not taxpayer dollars.”
When asked whether any portion of the settlement involved county tax revenue, Barris replied, “There is no taxpayer dollars.”
Sutton reiterated the point following the board’s discussion.
“I just want to state it one more time. No taxpayer dollars were used to settle this,” she said, adding that public rumors and accusations circulated while the county was unable to comment during active litigation.
County Attorney David Baxter said the board’s silence was intentional and necessary.
“It’s one of the hardest things for elected officials to do is to not comment on things like this,” Baxter said. “But it upheld the integrity of the litigation process.”
Baxter added, “I think the outcome was a positive one for the folks living in Lenoir County because it was insurance money that was used.”
Commissioners also discussed the broader issue of cyber crime affecting local governments.
“I’ve gone to a lot of training throughout the past year about cyber crimes,” one commissioner said. “We are not the only ones. This happens, and the criminals are going after this every hour of every day.”
The board unanimously approved the budget amendment, formally closing the legal matter. Sutton concluded the discussion by saying, “The outcome was a positive one,” and the county could now move forward.
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