CLINTON WILL ASK AN AUDITOR: WHERE DID $4 MILLION GO?
The City of Clinton will ask an independent auditor to track and explain the disappearance of $4 million from the city’s electrical Rate Stabilization Fund.
The city’s previous auditor suggested an independent auditor to track the money, so that would preclude the company prepared to perform the city’s 2021-22 audit, Love Bailey CPAs of Laurens; but that was the company listed on the City Council’s agenda as the preferred company to engage in an “agreed upon procedures” contract to do the work. In fact, Council Member Danny Cook, himself a bank, made a motion to engage Love Bailey, but withdrew the motion when he was told the City retained Love Bailey for the regular auditing work. “When did that happen?” Cook responded.
He asked for a dollar figure for the work ($35,000 was mentioned) and a review of council minutes to figure out when Love Bailey was retained. As it turns out, City Manager Tom Brooks was empowered to ask for a Request for Proposals to do the “agreed upon procedures” work, which is a step down from a “forensic audit.”
The action came as part of a 1 hour and 53 minute open-session called meeting of the council last Monday. There also was a time of discussion in closed session to duscuss two contracts.
One of those contracts was bonds for the Police Department and Fire Station. After the discussion, Mayor Bob McLean also wanted to commit money to build a swimming pool at the Clinton Family YMCA.
“Our children have no place to play,” said McLean, who will face at least one challenger in the March Municipal Elections.
His idea was to take some left-over ARPA money for the pool and splash pad at the Y on South Broad Street. There also will be a smaller “water feature” at the to-be-constructed City Recreation Complex on Hwy 56, just beyond the Clinton Presbyterian Community headed to I-26. Council stalled on McLean’s idea; at one point, he ruled Council Member Megan Walsh out of order for talking about it too much.
City Attorney Allen Wham also had a concern - he was a pool was not listed on the discussion items of the Dec. 12 agenda. McLean said “recreation complex” was listed on the agenda and the Clinton Y is and has been the city’s recreation provider for many years. He also said “the use of ARPA funding” was listed as an agenda item - “I don’t think the federal government is going to hand us $4 million agains any time soon, so if we don’t get it done now, it might not get done,” McLean said of a pool-splash pad combination.
ARPA is the Biden Administration’s American Rescue Plan Act money designed to help states, cities and counties bounce back from the COVID-19 pandemic. McLean’s idea is to us part of the ARPA money to round up a $7 million Police-Fire project - the city has just over $5 million available in bonds which must be spent for this project and this project only - and the rest for a swimming pool. Council Member Shirley Jenkins asked if it would be free; McLean said he envisions a $3/day fee for lifeguards and maintenance.
Council Member Robbie Neal said if the city went with an expanded splash pad at the Recreation Complex they wouldn’t need lifeguards - “just parents watching their kids.” In the end, McLean withdrew his motion for the pool in lieu of having YMCA Director Harold Nichols meet with ther council next month to discuss the pool-splash pad feasibility. Brooks said he looked into a pool two years ago for the Lakelands YMCA at $1.2 million.
Walsh said, “We need to finish Police and Fire and the Rec Complex, projects we have started. Not do a pool without any prior information, everybody wants a pool but this puts the cart before the horse.”
McLean said he wants to “put that horse in front of that cart and ride.” It’s been 20 years since Clinton had an outdoor pool, the mayor said, and if the city wants to be a cool place, it’s imperative to have projects that improve the quality of life.
Also, the council approved a 27.47% increase in the city fire department’s fire response fee; but McLean said the money should go into the City’s General Fund and out as an expenditure to the fire department, not as a fund within the fire department; awarded Southeast Apparatus a low-bid contract of $599,911 to buy a fire truck; and heard from Brooks that a retirement benefit for employees will produce a $120,000 unbudgeted debt for the city - council will discuss this and other matters again as budget discussions begin next month.
In the matter of the $4 million that was spent from the Rate Stabilization Fund without what some council members feel was sufficient notice from the previous City Administration, McLean said a Piedmont Municipal Power Agency official told him Clinton was not paying its bills on time.
“I never heard it from the city. I never heard about from somebody here. I heard it from somebody there who said we were not paying our bills (and incurring late fees and interest). In 2018-19 I noticed it was $2 million and it should be $4 million. Mr. Cannon (former City Manager Bill Ed Cannon) said it was not used. I told him, ‘You’re wrong’ then he said ‘we used it to pay bills but we’re going to put it back.’ He promised to have money put back into that account but I don’t think it ever was,” McLean said.
Brooks said the City’s internal accounting shows that the deficits stemmed from a 2017 council decision to lower electric rates 1 center per kilowatt hour. That resulted in less Utilities revenue coming in but there was never a corresponding reduction in spending, Brooks said. He said records show that the City “lost” 2017-18 lost $1.2 Million in 2017-18, $888,000 the next year, $1.5 Million the next year, and $700,000 in revenue the year after that.
McLean said it couldn’t be the electrical rate reduction -- the budgeting problems extended back to 2015, “We haven’t hit the mark on budgeting year after year.” For that reason, McLean suggested that the council’s audit committee be disbanded and the council as a whole hear about and decide on financial matters. Council Member Gary Kuykendall said there needs to be a council member as the city’s alternate to the PMPA board of directors - McLean was that “elected official” representative for a number of years but council voted previously to have the City Manager and the Assistant City Manager on the board of PMPA, the Greer-based agency of electric-cities from which Clinton, Laurens, Newberry and other purchasew electricity from an Oconee nuclear plant for re-sale in their cities - it’s how Clinton makes most of its money.
The action was taken at a meeting when McLean was absent - “I don’t know how you did it when you voted to replace me,” he said. Kuykendall recommended Council Member Ronnie Roth as the alternate replacement for Assistant City Manager Joey Meadors.
But Roth declined; he said the move is better made after the March Municipal Election. “(Previous city) staff could have come to council at any time and said we have a problem - I have a problem with anyone who says that this was in the past, not with that amount of money ($4 Million)”.
Walsh said people need to know “it is not fraud, it did not go into anyone’s pocket; we need to be more diligent when accounts are running over budget how much and how to make up the difference.”
