DATE: Sunday, October 26, 1997              TAG: 9710260063

SECTION: LOCAL                   PAGE: B1   EDITION: NORTH CAROLINA 

SOURCE: BY PAUL SOUTH, STAFF WRITER 

DATELINE: SOUTHERN SHORES                   LENGTH:  128 lines

BLUE SKY CLOUDS ELECTION PICTURE IN SOUTHERN SHORES, CANDIDATES HAVE VARIED SOLUTIONS TO PROBLEMS.

Municipal politics in this north beach town is usually quiet, like a sunny, Outer Banks afternoon. But this year's election is clouded by financial woes in a town project ironically named Blue Sky.

Aimed at strengthening homes in coastal communities, Blue Sky won national acclaim at its outset. But in recent months, spending overruns have the program under scrutiny. In the wake of its problems, Town Administrator Cay Cross resigned. But town officials say there is no evidence of any wrongdoing.

Incumbent Mayor Pro Tempore Carl Berntsen, retired naval officer Paul Sutherland and retired postal executive Joe Campbell are contending for two seats on the five-member Town Council.

The storm surrounding Blue Sky tops the list of issues. And all three candidates have a slightly different take on what should be done.

``That has been our black eye,'' said Campbell. ``I don't think Southern Shores should change the way responsibilities on the council are divided - a councilman for refuse, one for police and so on. But we need someone with expertise in finance to oversee that end of it.''

Paul Sutherland believes the town should sever its ties with the building program. And he believes the sample audit currently under way is not sufficient to determine what the town's final costs will be.

``In the history of Southern Shores, politics has been quiet, and the people have been satisfied,'' Sutherland said. ``With Blue Sky, the council took its eye off the ball, and the town is the ball. The project, though its goals were honorable, was more than this little town could cope with.''

Sutherland is adamant that a detailed audit be done on Blue Sky. He pointed to some $10,000 in town funds spent on galas celebrating Blue Sky.

``Blue Sky is in debt $222,000, and I'm not sure that is the bottom line,'' Sutherland said. ``There has to be a line-by-line audit. The town's report on Blue Sky leaves more questions than it answered. I'm confident there was no criminal wrongdoing and I'm confident there was no fraud, but what's not been made clear is the bottom line.''

Berntsen said the town already has plans to end its relationship with Blue Sky. But it must first meet some obligations to federal and state agencies that provided grant support for the program.

``We can't stop without completing our obligations in Phase I of the grant,'' Berntsen said. ``We have to complete our final report related to the grant in Phase I of the program. The program overspent about $255,000, and we have to take that out of the fund balance. As for the second phase, if it flies, it will be separate from the town. We're shutting off Blue Sky.''

Berntsen feels a line-by-line audit is unnecessary because of the current audit now under way. He readily acknowledges that town leaders dropped the ball when it came to Blue Sky.

``We trusted our administrator,'' said Berntsen. ``We were getting her reports and then not questioning those reports. That was a mistake.''

Water is also a critical concern to Southern Shores candidates.

Some are angry that Dare County has agreed to sell emergency water to developments on the Currituck Outer Banks but would not guarantee water to communities that were not part of the pact between Nags Head, Kill Devil Hills and the county.

Here is a look at the council candidates. Voters go to the polls Nov. Carl Berntsen

The 76-year-old retired forester said a guaranteed water supply for the town will be his top priority if elected to a third term.

``We have to have a guarantee of water,'' Berntsen said. ``There's a perception among some of the citizens that when it comes time to get water, we may not be first on the list. I see no reason why we couldn't work out something.''

Berntsen is also concerned about water quality in the neighboring ocean and sound.

``We know the quality of water isn't what it was 20 years ago,'' Berntsen said. ``We have to be proactive and do some analysis of the water around us.''

Berntsen also wants to bring the town's reserve fund back up to $1 million.

``Our fund balance right now is at $600,000, but we want to do better than that,'' he said.

Berntsen said the decline in the contingency fund was due in part to Blue Sky but also because of construction of a new police building. Joe Campbell

Campbell, 66, is concerned about a number of issues, including easing the traffic burden on U.S. Route 158, a guarantee of the town's water supply and some procedural changes that he says will help alleviate difficulties like Blue Sky's fiscal woes.

``I think the biggest issue is something that's out of our control,'' Campbell said. ``Traffic coming from the north passes through Southern Shores. We need to look at ways to alleviate some of the traffic. During the summer, it causes real problems for our residents. On Saturdays, you can pretty much forget about going anywhere. It puts a real demand on our police and emergency medical services as well. We need to look at the possibility of some emergency accesses to and from the bypass, as well as the overall problem.''

When it comes to water, Campbell said, the county's thinking has been ``misdirected.''

``There's no reason to be selfish,'' Campbell said, referring to the sale of emergency water to private Currituck developments. ``But at the same time, we need to take care of ourselves. There are a lot of people in Southern Shores who are worried that if Dare County can't live up to the terms of that agreement, we're going to be called on to help pay for it.''

Campbell said a simple change in the town's procedures could fend off future financial problems.

``One of the things that led to Blue Sky was making snap judgments,'' Campbell said. ``There are other governments that require a first and second reading before they can act on an issue. I think that would help us make better decisions.'' Paul Sutherland

The 65-year-old retired Navy veteran wants the council to change its meeting schedule to reflect the changing face of the town.

``The town of Southern Shores has traditionally met at 9 a.m. on the first Tuesday of each month,'' Sutherland said. ``The complexion of the town has changed. There is a larger number of working families with children. The council should meet in the evenings to give more people the opportunity to have input.''

Sutherland said he would not support Mayor Kern Pitts in a re-election bid. In Southern Shores, the council chooses the mayor.

``The mayor, I believe, has had a failure in leadership,'' Sutherland said. ``He's done an outstanding job in the past of leading the town. But with Blue Sky and all the problems, final accountability has to rest with the mayor and the board.''

Like Berntsen, Sutherland is concerned about the town's contingency fund.

``The town's general fund balance has dropped precipitously in the last two years,'' Sutherland said. ``Two years ago, we had a tax increase of four cents, in part to replenish the fund balance. It's not replenishing it.'' ILLUSTRATION: Color photos

Carl Bernsten

Joe Campbell

Paul Sutherland KEYWORDS: SOUTHERN SHORES TOWN COUNCIL CANDIDATES

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