Cobb County, GA, USA Streetlight Scandal

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The Atlanta Journal-Constitution, Wednesday, September 29, 2010
Metro Section, page B2



Cobb streetlight audit recommends overhaul

By Janel Davis

   Money collected from Cobb County residents to maintain streetlights will be kept separate from the county's general fund, county leaders decided Tuesday after received an internal audit that showed lax supervision of the streetlight program.
   The change would become effective Friday at the start of the new fiscal year, said County Manager David Hankerson.
   Maintaining a separate fund was on of 23 recommendations made by internal auditors, who found that the entire streetlight program needed an overhaul.
   About 65 percent of unincorporated Cobb's residents pay for streetlights, including maintenance and electricity, for neighborhoods that choose to participate.  Residents pay $9.50 per month for the first 23 months, then $3.50 monthly after that.
   The Atlanta Journal-Constitution reported this month that the county had diverted about $5.89 million in surplus money from the program into the county's general fund for other purposes, despite county ordinance that dedicated the funds to the streetlight program only.  The county collects about $4.3 million a year for its streetlight program, according to data obtained by the AJC through an Open Records Act request.
   Despite the program's intent for maintaining a separate fund for the light program, the audit revealed money was diverted throughout the program's operation, Hankerson said.
   "We thought it was important to go with what the intent was," he said.
   Hankerson became aware of the situation last year when he ordered a review to investigate a drop in collections in fiscal 2008.  When that drop was traced to an accounting change, he requested the audit.
   Auditors also recommended improvements in overall administration, including a reliable database of streetlight districts (which is not up to date); better monitoring of energy costs and consistent payment to energy companies; establishment of written guidelines and a possible adjustment to the light fees and installation surcharges.
   During the five-year audit period, from fiscal 2004 to June of fiscal 2009, the program had an average estimated yearly surplus of $404,758 and no adjustments in the policy governing fees.
   The county will decide whether changes, such as reducing fees or refunding residents the surplus money, are warranted after the Transportation Department, which oversees the street light program, responds to the audit, Hankerson said.
   Marietta resident Sandra Schick would like the county to cancel streetlight collections for the next year.
   "I say don't pay anything further until they straighten things out," said Schick, 76, who paid light fees for seven years.  "Because if they give you a refund, it's not going to amount to anything."
   The county established its first streetlight district in 1978 with 14 subdivisions.  About 3,7000 districts have been created, serving more than 106,000 households and businesses.  Three-quarters of the residents in a neighborhood must sign a petition in order to join the program.

Staff writer Tim Eberly contributed to this article.

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East Cobb Neighbor, Thursday, October 7, 2010
Page 8A

Refunds to residents unlikely from county streetlight surplus

By Katy Ruth Camp

Marietta - Residents who pay into the county's streetlight district are unlikely to see a refund of overpayments anytime soon, Chairman Tim Lee said.  And even if they do, the logistics of the refunds may cost taxpayers even more money.
   Earlier, Lee had said he would consider giving refunds for the surplus money that was pent in other areas, but this week, he was more cautious.
   "To give refunds for the last 30 years is going to be next to impossible because people move, subdivisions change, other things change, and honestly, it's just not going to be possible.  But at this moment, we are not going to issue refunds until we see what impacts the results of the recommendations have on the fund," Lee said.
   By January, officials will have set up a special account for streetlight revenue.  County officials only recently realized that revenue that residents had been paying for streetlight maintenance was going into the general fund, and being used for projects in addition to streetlights.  The fund was created in 1978 to install and maintain streetlights around the county.  To opt-in, 75 percent of residents in a subdivision or neighborhood must agree to pay the $3.50 monthly fee, which is added to water bills.  In areas where streetlights must be installed, participants pay $9.50 a month for up to three years, then $3.50 per month thereafter.
   A county audit showed that since 2004, the program has been generating surpluses, sometimes upwards of $700,000 in a year.  After hearing the results of the audit by audit manager Latona Thomas on Tuesday, Chairman Lee directed County Manager David Hankerson to set up a separate account for streetlight income and expenses.
   Projections by Cobb Finance Director Jim Pehrson show a streetlight surplus of $315,000 in the fiscal year that ended Sept. 30.  But by 2012, Pehrson said, the fund could see a deficit of $13,000, and by 2015, that deficit could be much as $249,000 for the fund.  That could result in higher fees for the program.
   Commissioner Bob Ott agreed that even if the county attempted to pay residents back for surpluses, the administrative cost could be prohibitive.
   "We have to determine that most feasible and economical way to handle this, whether it is a refund, or a possible adjustment of the rate.  We have to make sure we're not going to spend more money trying to give people 50 cents each than the money it would take to do that," Ott said.

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The Atlanta Journal-Constitution, Thursday, October 28, 2010
Section B1

Cobb County
Separate fund set for streetlights program

   Cobb County commissioners unanimously approved a separate revenue fund for the county?s streetlight program Tuesday night, calling it an important first step in addressing issues revealed in an audit of the program.
   An internal audit presented last month found the program to have inadequate accounting policies, lax oversight and in need of an overhaul.
   The Atlanta Journal-Constitution reported in September that the county had diverted about $5.89 million in surplus money from the program into the county?s general fund for other purposes, despite a county ordinance that dedicated the funds to the streetlight program only.
   The county collects about $4.3 million a year for its streetlight program, according to data obtained by the AJC.  Janel Davis

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The Atlanta Journal-Constitution, Tuesday, November 9, 2010
Metro Section, page B4

County by county: Cobb

Commission may vote on streetlight mapping

   County officials are continuing cleanup of the streetlight program by mapping its streetlight districts and streetlights.  Commissioners may vote on the $42,372 project today.
   The mapping system is one of several recommendations included in an internal audit of the county's streetlight program.
   The audit found the program to have inadequate accounting policies, lax oversight and in need of an overhaul.  Janel Davis.

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East Cobb Neighbor, Thursday, November 11, 2010
Page 4A

Cobb looking to map out its streetlights

By Katy Ruth Camp

Marietta
   The board of Commissioners is expected to approve spending $41,372 fir a Geographic Information System map of the districts and each streetlight when it meets Tuesday morning.
   Last month, the board created a special revenue account specifically for the fund, which means that revenue paid my member citizens can no longer be used for anything other than street light installation, maintenance and operations.  That recommendation was among a list of 22 recommendations for changes to the program made by the county's internal audit division by Oct. 7.
   Tuesday's item regards another of those recommendations, and Cobb Transportation Director Faye DiMassimo said a mapping system showing where each district and light is located will be the foundation for enacting other recommendations.
   "We've got to have a good core data set to do everything else, so that we know where assets are and we can manage them efficiently," DiMassimo said.  "This will be its own unique component of the county's current mapping system, and will help us significantly moving forward with the other recommendations."
   The GIS street light district maps will be set up into two layers, said Lynn Biggs, GIS Supervisor for Cobb DOT.  The first layer will show all 4,000 street light "district," or neighborhoods, in the county.  The second layer will pinpoint the locations of 40,000 individual street lights.
   The county intends to use contingency funds --- which are the leftover dollars when other projects come in under budget --- to pay for the mapping.  And Biggs said $1,000 of the cost will go just for shipping all of the necessary documents to the winning bidder, R.A. Smith National in Brookfield, Wis.
   "We had four bidders, and that was our low bid.  The company will have to gather all of our street light district information, which is currently just on piece of paper, and put them into a map and the system.  So that takes a little bit of effort, with 4,000 districts and 40,000 street lights," Biggs said.
   Biggs estimated the project will take three months to complete.  The county already has vast GIS, including those for roads, tax districts, and water mains and sewers, she said.
   "This is a great management tool, and we will be able to visualize where they are and get them inventoried.  Eventually, we could look at other details and use them for other purposes, such as tracking which street lights are not working," Biggs said.
   [sic]

[Jace the Gull]

That really sucks that residents would have to pay themselves for service.....

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Those who requested streetlights in their neighborhood are usually pays via the water bill as mentioned in one of the article.  Only 40,000 streetlights are made out of 280,847 houses by 2009 estimate.

http://quickfacts.census.gov/qfd/states/13/13067.html

Where we live, there is one HPS streetlight right front of my bedroom window.  So far, there are two HPS streetlights are cycling in my neighborhood.  Imagine if the HPS streetlight by my bedroom window is cycling during night, I may want to buy a darker curtain

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Found missing main article to be added:

The Atlanta Journal-Constitution, Sunday, Sept. 12, 2010
Metro Section, page B1

Cobb diverts lighting funds

Fees paid by residents to illuminate stress used for other purposes.

By Tim Eberly

   Over the past decade, many Cobb County residents have paid a special fee -- totaling more than $43 million -- that the county said was going toward maintaining street lights in neighborhoods.
   In fact, the county has diverted $5.89 million of that revenue to feed its general fund in what has amounted to a hidden tax on about 65 percent of the county?s unincorporated residents, The Atlanta Journal-Constitution has learned.
   Questioned by the AJC, top county officials say they discovered in December that the surplus money from the street light program was being spent on other needs.  But the county has not yet taken any action to change that.
   County Manager David Hankerson acknowledged that the practice "raises some concerns" but defended the county's use of the money.
   Cobb's street light ordinance states that the fee collected from residents is for "the cost of providing and maintaining street light service."
   Cobb's response: The ordinance doesn?t say the county can?t use extra money for other expenses.
   "Whether you agree or dis-

Cobb continues on B6

Metro Section, page B6

Fees meant for lighting diverted

Cobb
continued from B1

agree, we tend to look a lot at what it says you can't do," Hankerson said.
   At least one Cobb County commissioner, Bob Ott, has concerns about the county's actions.
   If the county is telling residents that the money is for a specific service, Ott said, "then that ought to be how it works.  If that's not how it works, then you're not telling the people what's really going on."

Charge added to water bill
   There are 107,000 households in Cobb's street light program, which pays for the installation, maintenance and replacement of the street lights, as well as the electricity cost.
   Neighborhoods or subdivision can join the program as long as three-quarters of their residents sign a petition in support.
   New members pay $9.50 per month for the first 23 months, then $3.50 monthly after that.  The charge is added to residents' water bills.
   On average, the county brings in $4.3 million yearly for its street light program, according to data obtained by the AJC through an Open Records Act request.
   The Cobb government website states: "The street light funds go to the county's general funds to pay for utility costs and other maintenance associated with providing this service."
   What the county doesn't tell residents is that, each year, about $600,000 of those fees -- about 14 percent of the total street light revenue -- has been diverted to other county needs.
   When asked where the extra money goes, county spokesman Robert Quigley said in an e-mail that it is "spent on varity of things, which could include police salaries, playground equipment or fixing pot holes, etc."
   A taxpayer watchdog group based in Washington said Cobb's use of the money is inappropriate.
   If the money is collected for a specific purporse, then it should be used only for that, regardless of whether the county ordinance prohibits it or not, said Leslie Paige, spokeswoman for Citizens Against Government Waste.
   "It shouldn't have to say that," Paige said.  "Because the government is not entitled to the money automatically.  The

On average, the county brings in $4.3 million yearly for its street light program, according to data obtained by the AJC through an Open Records Act request.

government is not entitled to keep any extra without coming back to the people and saying, 'We want to use this for something else.' "
   Andy Padgett, 71, who lives in northwest Cobb and has been paying the fee since the 1980s, said it should be spent on the street light program and nothing else.
   "The county's just ripping us off under the guise that the money is paying for street lights," Padgett said.  "I think the country ought to refund people and lower the rates."
   Thellis Myers, an East Cobb resident, is one of the program's newest members.  His subdivision, Foxridge Court, submitted its petition in March and got street lights installed in June.
   Myers, who spearheaded the effort, said he was not aware the excess street light revenue went toward paying other county expenses.
   "I think that's absurd," Myers, 71, said. "I don't think we should be paying extra for another expense."

   Hankerson said he was surprised to learn recently that surplus money was being used for the other purposes, and added that the practice has been going on since before he became county manager in 1993.
   "I really didn't know and had never asked, 'Where does the surplus money go?' " Hankerson said.
   When asked how long surplus money has been diverted Quigley said it apparently has been happening since the program was created about three decades ago.
   Each year, all money earmarked for the street light program is put in the general fund.  The program has withdrawn money as needed, but used the rest for other purposes.
   Hankerson said he discovered the issue while the county was investigating a dip in the street light program's revenue.  The program is run by the county's transportation department.
   As a result, he directed the internal audit division to look into the matter, Quigley said.  The review should be completed this month.
   "Result of the audit would most likely be change in procedures to provide more accurate accounting of the revenues and expenses," Quigley stated in an e-mail.  "And to provide guidance on how the fund is set up."

Other counties
   Cobb stands alone in it use of surplus street light money compared to other major county governments in metro Atlanta with similar programs.
   DeKalb, Gwinnett, Clayton, Paulding, Henry and Fayette counties either do not generate surplus money with their street light programs or do not spend their surplus on anything other than street light expenses.
   "You would never want to do that," Fayette County spokeswoman Carol Chandler said.  "That's astounding."
   Of those county governments, the two that have generated surplus revenue, DeKalb and Gwinnett, say they keep their street light money in a separate fund and do not use it for anything else.
   Cherokee County's street light program is the only other in metro Atlanta that generates surplus revenue and uses some of it for other expenses.  But Cherokee's program is not run by its county government, but rather a water and sewer authority that is a separate government entity.  Its surplus revenue also was significantly less than Cobb's.
   Cobb officials also told the AJC that other costs actually made its street lighting surpluses less than they appear on annual balance sheets.  They argued that indirect costs -- the time and resources that other county departments put into the street light program -- associated with the program have average about $213,000 annually in recent years.
   Most other metro Atlanta counties don't calculate indirect costs for their stree light program.  But Gwinnett, which has a program that is considerably larger than Cobb's, has annual indirect cost of less than $20,000 per year.
   Padgett, the retiree from northwest Cobb, said he was upset the county was spending his street light money on other things.
   Back in 1986, Padgett had the same suspicions and did some detective work of his own.  He said he went to the county government offices and reviewed street light program documents.
   During a public hearing from that year, Padgett reported to the county officials that he discovered the program had overcharged residents $109,000 during a five-month period, according to minutes of that meeting.
   He said county official told him the surplus money was to pay the salaries of those who worked on the street light program and to have a cash reserve for maintenance and repairs.
   "They were charging more than what they should be charging," Padgett said.  "I fought them tooth and nail back then, but it didn't do me a bit of good."

Dealing with a surplus
Local county governments that have street light programs

County                     Surplus revenue?    If so, do they use it for other expense?

Cherokee*               Yes                          Yes
Clayton                    Generally not           No
Cobb                        Yes                          Yes
DeKalb                     Yes, sometimes       No
Fayette                    No
Gwinnett                  Yes, sometimes       No
Henry                       No
Paulding                   No

*Cherokee's street light program is not run by the county government, but rather a separate not-for-profit government entity.

Sizable Windfall
Surplus money from Cobb's street light program

Fiscal year   Surplus
2000      $581,685
2001      $646,620
2002      $753,085
2003      $788,875
2004      $654,974
2005      $726,489
2006      $793,073
2007      $557,239
2008      $18,233
2009      $377,568

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