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Published on 5/26/2009

* Administrator says $600K shortfall is his major concern

By Tommy Howard

thoward@gtowntimes.com

City Council candidate Jeanette Ard said she doesn't believe some city credit card expenses are in line. She called it "spending gone wild."

She's particularly concerned about such purchases as a half-dozen music CDs, routine purchases at Wal-Mart rather than from a wholesale supplier, and some $8,000 for clothes from Oshkosh and Land's End.

New Georgetown City Administrator Chris Eldridge said he appreciates Ard's concerns, and he's already addressed some of them.

But, he continued, there are other major issues that the city needs to deal with such as the indefinite closure of the local steel mill and a resulting $600,000 revenue shortfall.

Take a look

For Jeanette Ard, a Front Street business owner and candidate for Georgetown City Council, it's time for the city to look closely at past spending practices.

She's long believed there should have been an audit before former administrator Steve Thomas resigned last fall.

She said that a sampling of credit card statements shows routine spending of about $4,000 each month at Wal-Mart in Georgetown, rather than buying from wholesale suppliers.

Also, she said, the statements reflect that some of the purchases at Wal-Mart include spa relief and other relaxation music CDs, tissues, groceries, plants, small appliances, clothing and other items.

Separately, Ard said, there are expenditures for clothing from Oshkosh and Land's End, as well as from Tomlinson's in Georgetown.

These reports on expenditures came from copies of credit card statements Ard secured through a Freedom of Information Act request.

When she asked about the clothing items, Ard said, she was told they were for the mayor and council members.

"We apparently have the best-dressed mayor and council around," Ard said.

There are numerous charges for gas, air fare, accommodations and meals to places such as Key Largo, Fla., California, Baltimore, Mankato, Minnesota and Michigan.

The air fare, accommodations and meals "show that our city personnel are well-traveled and hopefully well-informed and educated," Ard said.

"The spur-of-the-moment trip to Washington, D.C. that did not even result in a meeting with a congressman cost $660 per person plus accommodations and meals." Ard said advance tickets are generally available for under $200.

"This was a poorly-planned trip for a meeting in a hallway with a congressional aide with no results to measure," Ard said.

Sampling of charge cards

She asked for copies of these receipts for periods in 2007 and 2008, she said, to see what sort of expenses were put on the various credit cards.

When former city administrator Steve Thomas was in Georgetown, there were several calls for an audit of finances before his departure. Several members of council and Mayor Lynn Wood Wilson said at the time that they didn't see the necessity of an audit.

Thomas resigned under intense pressure last fall. He was paid $40,000 in a severance agreement. His last day of work was Oct. 3.

"Apparently, there has been little control on expenditures by city staff," Ard said. She cited purchases for soap, tissue, paper, pens and the like. Also, groceries and snack items and soft drinks are purchased on the Wal-Mart charge cards.

"Who is cooking and for whom?" Ard asked. "If for staff, shouldn't they just chip in?"

New city administrator Chris Eldridge has a difficult job of bringing staff and spending back into line, Ard said. The nation's economy is tough and presents difficulties with setting "a budget that the citizens can afford to live with.

"We cannot and should not ask the citizens to pay increased taxes or fees that will cover the present deficit that comes from irresponsible spending," Ard said.

"In a city with a decreasing population and an increasing size of staff and budget," she continued, "this sampling is astounding. We definitely need an explanation of how spending has gone wild and the need for a city-wide audit is apparent."

Changes underway

Eldridge told the Georgetown Times Tuesday afternoon that there are a number of changes he's made since coming to his new job at the end of March.

For one of Ard's major complaints, most of the 40 or so Wal-Mart charge cards have been turned in.

Eldridge said each department now has one card, so there are about 10.

This makes it the responsibility of each department head to know what the expenditures are and makes it less likely that a card can be lost.

He said bulk purchases from wholesalers can make sense, but if there's a shipping charge on the item -- as he said there would be from "state contract" purchases -- it makes the cost about equal to what is paid at the local big box retailer.

He said the food and snack items are charges he hasn't seen. "I know we have coffee and some snack items. I think they do sometimes feed the boards when they are meeting."

The city's various boards and commissions are made up of volunteers who receive no pay for their service, he said.

There are numerous charges reflected on the statements where former administrator Steve Thomas charged meals at Lands End Restaurant, The Rice Paddy, the River Room and others.

Some of the charges have hand-written notations of several employees eating together.

A local accountant said that for private businesses, several employees going to lunch together would not be a tax-deductible expense allowable under IRS regulations.

When asked about such charges, Eldridge said "The only ones I know are if they're traveling."

He looks at every travel expense report before he signs it.

If Eldridge takes someone else out to lunch for city business, he might buy a meal for somebody, "But no, not normally."

If three employees have lunch together, he continued, you would write on the receipt what the meeting is for.

Bigger concerns

Eldridge said these practices are a concern, but there are other issues that capture his attention.

"My biggest concern is $600,000," he said. "I know this is election time."

The $600,000 he's referring to is the expected revenue shortfall the city faces with the indefinite closure of ArcelorMittal's steel mill in July. The company spends that amount of money each year for water and wastewater treatment. Since no one knows how long the mill will be non-operational, the budget has to be adjusted to deal with the lost revenue.

Eldridge said he hasn't seen the copies of the past charge card statements, "But, definitely, everyone needs to be careful what they do and how they spend taxpayer's money."

Other issues

Speaking of other issues facing the city's budget planning, Eldridge said, "I just found out today we're paying for a separate long-term disability policy for all employees. It costs $30,000 per year."

City council will have a special meeting at 4 p.m. today (Wednesday) to look at healthcare costs.

Reducing costs

Other cost-cutting measures are in the works.

The city will save from $16,000 to $18,000 annually by getting rid of some cell phones.

Other issues include a take-home vehicle policy, on-call pay and a new lease for a street sweeper.

In the building and planning department, a $70,000-item for consulting fees is being removed. That is for redoing the city's comprehensive plan. Members of the Planning Commission and staff will do that work in-house.

Since Sabrina Morris resigned as director of that department, Eldridge said, he's decided not to fill that position at least until the first of the year.

Other vacancies that won't be filled include an administrative assistant position in his office, a zoning enforcement position, and other jobs in the water utilities and electric departments.

Healthcare costs

"The big thing is health insurance," Eldridge said.

There is no magic bullet, he added.

Council and staff will look at the $2.1 million the city is spending each year to buy health and dental insurance for employees, as well as some spouses and family members.

That works out to $728 per employee per month for last year, and is running $736 per employee per month this year.

In 2005, he said, the cost was $583.

"Taxpayers are paying for dependents," Eldridge said. "That's why it's been the focus of a lot of these work sessions."

He noted that $2 million for healthcare out of a total budget of $30 million is "a big chunk of the operating budget." That's one-fifteenth or close to 7 percent of the total budget for healthcare.

Looking around

There are big issues and little issues, Eldridge said. With the closure of the steel mill, that's a loss of a big employer, he said.

"We're looking under every rock we can, squeezing" the budget to reduce costs.

There was a recent suggestion that the city not attend the Municipal Association of South Carolina meeting at Hilton Head Island in August. That would save from $10,000 to $15,000 for meeting fees, lodging and other expenses.

*

The city's budget has to be approved by June 30.

There will be a budget workshop at 4 p.m. Thursday in City Hall.