Questions remain over Claxton Gas Fund depletion

One of the main concerns of the citizens of Claxton is the town’s continuously depleted natural gas line account. AllOnGeorgia published an article in August 2015 detailing why Claxton’s once more than-million dollar pgas account was showing less than $1,000 as a balance at the end of a fiscal year. The funds were used to pay for, in full, the new City Hall, but following the depletion of those funds, it seems the cushion has not seen attempts to be replenished.

On February 18, 2016, AllOnGeorgia filed an open records request to review every expenditure from the natural gas line account for 2013, 2014 and 2015.  When those documents were made available in late March, AllOnGeorgia discovered the following expenditures were being made from the gas line account:

• Georgia Municipal Association annual dues (July 2, 2014) – $1,378.47 (GMA has a gas section that Claxton is member of, for obvious reasons. Paying those dues from the natural gas account could be justified, however, the general dues paid to GMA for oversight on general operations is a different expense)
• Food Fresh Holiday Hams (Jan 2015) – $95.07
• Food Fresh Holiday Hams (December 2012) – $298.32
• Quarterly drug testing for city employees not employed by the natural gas department – multiple expenditures ranging from $34 -$85 a piece
• Flu shots for city employees not employed by the natural gas department
• Prison Warden fees in 2014 & 2015
• Pest Control Services for City Hall, Police, and Fire department buildings
• Over $10,000 to the Downtown Development Authority over the course of 2 years
• Sam’s Club memberships for the City Administrator and 5 other employees in 2013 & 2014
• $200 for a website in September of 2014. The City of Claxton does not currently have a website for anything having to do with the natural gas line
• $85 to reupholster a chair
• A portion of the audit, which is paid annually
• Over $2,000 in signage for projects around the City.
• $100-$200 a month in “Wireless consultants.” The City pays a company in Statesboro to reduce the amount of money they City pays on cell phone and wireless services every month. Unfortunately, what the savings seem to be are what the city is paying in consulting fees.

Additionally, the Natural Gas Fund pays portions of the city electric bills, cell phone bills for city employees, and vehicle repair bills.

Another repeated expense from the Natural Gas Fund included credit card payments for a Bank of America credit card. (Aside from the purchases, it is questionable that a city with over $1,000,000 revenue from one account alone needs an interest-bearing credit card and continuously carry a balance.) Expenses paid via the credit card include:

• Norton Antivirus computer software (recurring annually)
• OnStar Navigation systems (recurring monthly)
• iphone cables and chargers
• $65 in Wastewater Professional Licensing fees to the state
• A $408 stay at the Savannah Marriott
• Non-gas section Georgia Municipal Association fees of $250

Back in January, when AllOnGeorgia examined the salary of the City Administrator topping $98k annually, Mrs. Durrence explained to AllOnGeorgia that she received $500 a month for her car payment because she drove a lot but did not receive mileage reimbursements. She was adamant that that was the only cost she was provided (minus a City cell phone for work projects), but the Natural Gas Fund expenses say otherwise. For the years requested (2013-2015), Mrs. Durrence received a $275 check for mileage reimbursement every month except August 2013. The IRS reports in 2015 that the mileage reimbursement cost was $0.575/per mile. That means that Mrs. Durrence drove exactly 478.260870 miles every month in 2015 for city business and 491.07 miles every month in 2014 when the reimbursement was $0.56/per mile.  That’s considerable since the City of Claxton is less than 2 square miles.

Former Mayor Luther Royal also received a mileage reimbursement of $200 every month from July 2012 – April 2015 from the Natural Gas Account, meaning he averaged over 350 miles a month in city business. While the amounts may seem small, they add up to thousands of dollars a year, again, from a city account that is struggling to show a balance.

Worth noting, the City pays for 50% of nearly every expenditure from the natural gas line. Mrs. Durrence explained that 40% of the city is funded by the General Fund, 10% from the water account, and 50% from the natural gas fund. Those splits come off the top. In essence, if the city purchases something as minor as a box of copy paper for $100, only $40 of that $100 comes from the General Fund – the fund intended for operational expenses. There is no consideration for what the use may be. Everything is split. Mrs. Durrence explained to employees of AllOnGeorgia that every salary for city employees and every expenditure is funded by the natural gas fund, by at least half.

That would explain why the fund is being depleted so quickly. The Natural Gas Account has been “loaning”  money to the General Fund at least once a quarter. Some of the loan sheets read that they are for salary purposes, others did not disclose what the loan was for but, the amounts were not consistent, nor were the withdrawal dates. Additionally, the General Fund has never written a “repayment” back to the Natural Gas Fund.

• $25,000 loan – July 2012
• $50,000 loan – February 2013 
• $75,000 loan – May 2013
• $50,000 loan – July 2, 2013
• $13,000 loan – July 13, 2013
• $25,000 loan –  September 2013
• $50,000 loan – March 2014
• $50,000 loan – May 2014
• $50,000 loan – May 15, 2014
• $53,000 loan – July 10, 2014
• $50,000 loan – July 2014
• $50,000 loan – August 13, 2014
• $50,000 loan – August 27, 2014
• $50,000 loan – December 2014
• $62,000 loan – June 12, 2015

If you’re keeping track at home, the FY 2012-2013 total loans of $150,000, FY 2013-2014 total $238,000, and FY 2014-2015 total $315,000. It’s difficult to buy the idea that loans are needed for salaries at the perfectly round numbers, but even harder to understand when you consider the next salaries. Worse, the loans are made on a handwritten sheet of paper with the amount, the date and a single signature. No specifications or details.

Finally, the City of Claxton provided this salary list for city employees. [Names redacted for privacy]

In 2013, the salaries totaled $162,868.44. If it’s true that these person were paid solely from Natural Gas Funds, as dictated by the paper provided by the City, this number is more than the amount loaned to the General Fund for salaries ($150,000). The following year, the salaries totaled $170,250.84 but $238,000 was loaned – with minimal explanation. There is no consistency or reasoning behind the fund transfers.

What’s alarming, however, is that the City Administrator previously told AllOnGeorgia that the amount of revenue collected from the natural gas line has gone down by several hundred thousand dollars over the last few years. If that is the case, and city audits confirm that it is, the City of Claxton is operating 50% of their budget on an ever-decreasing revenue stream that continues to be less and less stable. The question the City elected officials should be asking themselves is whether or not the City could still operate without the Natural Gas Fund.

Interestingly, despite the fact that these are the only salaries listed, City Attorney Bill Callaway was paid directly from the Natural Gas Account more than once in 2015. This goes against Mrs. Durrence’s statements that salaries “must be paid from the general fund.” What else did the City cover? His continuing legal education classes. Mr. Callaway has a private practice – it is not proper for the city to foot the bill for his continuing education classes.

The list to the right does not provide the amounts for the 50% of the salaries the natural gas fund covers for employees working in City Hall, which shows the City does not have a firm grasp on the static expenses it has to pay every year.

Claxton is blessed to have a massive revenue source that should provide the citizens, taxpayers, and business owners in the city with an immense cushion, one that could reduce the tax burden across the board if the funds were used effectively. Instead, the natural gas fund is being used as a back up source of cash, is victim to messy accounting, and serves as a bottomless catchall bucket for discretionary expenses.