This article is part of an ongoing investigation into the financial practices in the City of Claxton.
A handful of concerned citizens approached AllOnGeorgia last fall regarding the HVAC contracts and work for the City of Claxton and the fact that all of the work appeared to be going to one company: Royal Commercial Refrigeration, Inc. The claims were unconfirmed and without proof.
In February, AllOnGeorgia requested the HVAC contracts as well their bids that were placed in the newspaper for the years 2003-2015 from the City of Claxton. Claxton operates on a Fiscal Year of July 1-June 30, and after over a month of requests and a complaint to the Georgia Attorney General’s Office, the request was partially filled. All of the years were provided, with the exception of —, however, the bids for each were not included in the open records files.
It is standard operating procedure for local muncipalities and counties to instate a cap for purchases that do not need approval by the council. Generally, the amounts range from $500 to $1,000 depending on whether or not the issue is an emergency. These types of policies are important in City Manager/City Administrator type governments because it allows decisions on day-to-day operations to be made without the oversight of council – things like water leaks, fountains not working, purchases of office supplies, and service calls for utilities and even HVACs.
So what is the problem: Royal Commercial Refrigeration, Inc. is owned and operated by longtime Mayor of Claxton Luther Royal. (He has since vacated office following a defeat in November 2015 election.) The now-former Mayor earned beaucoup dollars during his tenure with the City:
- July 2003-June 2004: $7,307.99
- July 2004 – June 2005: $9,996.37
- July 2005 – June 2006: $12,428.83
- July 2006 – June 2007: $6,321.39
- June 2007 – July 2008: $1,617.31
- June 2008 – July 2009: $24,613.48
- June 2009 – July 2010: $11,913.8
- June 2010 – July 2011: $11,095.46
- July 2011- June 2012: $7,379.36
- July 2012 – June 2013: MISSING
- June 2013-July 2014: $17,019.09
- July 2014 – June 2015: $3,074.11
That’s a grand total of $112,767.19. And that’s just for 11 years. Royal Commercial has been in service for more than 30 years and Luther Royal was mayor for decades.
Here’s the kicker: The City of Claxton’s policy is that the City Administrator has the discretion to make purchases up to $5,000 without council approval. That amount is unheard of in a town that size. In neighboring cities, the amount is much smaller, sometimes a mere $500. But in this case, essentially, the person appointed by the mayor (and confirmed by council), was ensuring that her boss, the mayor, received every project for city HVAC work. What’s worse – if you’ll review the Google Document – is that the projects often went far beyond the scope of HVAC work and even included paint and construction work. Again, without bids.
The City of Claxton is home to just 2,500 people. Barring any real emergency, it’s a stretch to claim that the City Administrator needs $5,000 of leeway sans City Council approval to operate the city.
It’s also understandable to want to support local businesses. But it’s highly frowned up to have the person in charge of the city bringing in thousands of dollars annually from city projects. It is immoral and unethical. It is, without a doubt, a conflict of interest. And all of the other local businesses in the area never had a shot because the projects weren’t put out for bid. Never Dyass Air or Ogeechee Heating & Air. No HVAC Doctor. No one else, ever.
You’ll note, however, on the Google Spreadsheet that there were instances where projects exceeded $5,000 and no bids were provided to accompany those projects. Also noteworthy is the fact that the majority of the projects were not emergencies.
Mayor Royal may be gone, but this speaks to much greater operational issues. The Claxton City Council should immediately seek to reduce the amount of funds for discretionary purchases and instate a policy that prohibits the use of companies owned by city employees or elected officials – unless there is a proper, legal bidding system. The City of Claxton, with its drainage of the natural gas account and the consistent considerable loans made to the general fund, cannot afford to continue to operate with such haphazard expenditures.
More on that in the upcoming Part II….