Eutaw City Council approves emergency audit of water department; Auditor arrives to find water office in disarray

Office of the City of Eutaw Water Department
Eutaw City Councilwoman Shelia Smith counting cash found in Water Department.
Back room at Water Department where cash was found.

By: John Zippert,

At its regular Eutaw City Council meeting, Tuesday night, September 22, 2020, the Council voted 4 to 1 to contract with Donald H. Wood, CPA of Yeager and Christian PC accounting firm of Tuscaloosa, to conduct an emergency audit of city finances beginning with the Water Department.
Councilmember Sheila Smith announced that Mr. Woods was coming to the City Hall on Wednesday morning at 10:30 AM to begin his forensic audit of the Eutaw Water Department. Councilwoman Latasha Johnson asked the Mayor if he was going to allow the CPA to come into the office and begin his audit. Mayor Steele did not answer this direct question.

A crowd of 20 or more city residents were gathered outside City Hall at 10:30 waiting for the CPA to arrive. City Council members Shelia Smith, Latasha Johnson and LaJeffrey Carpenter were part of the group.
Mayor Steele came out and said, “Ruthie Thomas, our Water Clerk, is moving today and she will not be in the office today. I will not allow you to come in since she is not here.”
The two Councilwomen pushed ahead and said they had the key to the Water Department office and went in and unlocked the door for the CPA to begin work on his audit.
Don Woods, the CPA took one look in the office and said, “There are no records here for me to audit, just a mess. You need to get the State Office of Public Accounts or the FBI to come and straighten this out before I can do an audit.”
Councilwoman Shelia Smith, who has been the most adamant member of the Council insisting that the problems of the Eutaw Water Department be investigated and corrected went into the office and found two bank bags of cash money, as well as stacks of other cash money lying around in the office.
Sheila Smith counted the money in the two bank bags in the presence of numerous witnesses. The first bag held $1,786.65 and the second bag had $2,350.83, a total of $4,137.48. City Attorney, Zane Willingham, who was called to the City Hall by the Mayor,
interrupted the counting, cleared the City Hall of residents and re-locked the Water Department Office. City Clerk, Kathy Bir completed counting the money in the second bag and was asked by the attorney to lock the funds in the office.
The two bank bags were not the only funds visible in the Water Department office. Several other stacks of money could be seen from the doorway of the office.
Councilwoman Latasha Johnson, who is in a runoff contest on October 6, for Mayor against Raymond Steele, pointed out that the Eutaw City Council had passed an ordinance earlier in the year not to accept cash money for water bills. Mayor Steele has disregarded this directive from the Council and directed Ms. Thomas to continue to collect cash from city residents for the water bills.
Several residents asked why there was so much undeposited cash sitting in the Water Department Office instead of being deposited in a bank. These questioned were unanswered.
A majority of the Eutaw City Council has been attempting to resolve the problems of the Water Department for several years, but Mayor Steele has frustrated every attempt to examine and work to resolve the problems of the water system.
The problems include water meters that have been installed incorrectly, problems in synchronizing the digital water meter readings with the billing system and computer softwear; some residents getting minimum water bills and others getting outrageously high bills, not related to actual usage; complaints of brown looking water and water people feel unsuitable to drink.
Mayor Steele’s response for months has been that, “We have corrected all of the problems with the meters, billing and other conditions and things are running smoothly.”
The Alabama Rural Water Association came and did a study three months ago that found that half of the water pumped each month from the City’s wells was not billed and lost by the system. This resulted in an average monthly loss of $49,823.29 in revenues and a loss of close to $600,000 a year by the water system.
In response to this report, the Eutaw City Council voted 5 to 1, with only Mayor Steele in disagreement, to contract with Water Management Services (WMS), an experienced consulting firm allied with the Alabama Rural Water Association, to manage and straighten out the finances and physical condition of the water system.
When Kathy Horne and two associates from WMS arrived to begin work on September 1, 2020, Mayor Steele refused to allow them to enter City Hall. He threatened them with arrest for trespassing if they went forward with the management contract. The consultants were discouraged by the Mayor and went home.
Councilwoman Latasha Johnson asked her opponent in the Mayor’s race, at Tuesday night’s Council meeting, “Why do you not want to accept help from consultants and auditors to fix our water system and make it better. If I am elected to replace you, I will welcome help to get our system back in operation, where it can serve the people and generate revenues to support the city’s budget.”
Other observers at the meeting were less generous in their view of the Mayor’s intransigent position. People were heard to mutter, “What is the Mayor hiding in the water department? Is he stealing water funds? Is he using those funds to buy votes in the election?” Those questions and concerns have also thus far gone unanswered by the Mayor. He continues to refuse help and fight auditors and others who have come to find a path forward.
Councilwoman Sheila Smith says, “I am not giving up. We are going to get to the bottom of the problems in the water department.
I am contacting the State Auditor of Public Accountants, the FBI, the District Attorney, anyone who will listen to me about the problems and corruption in the City of Eutaw Water Department.”

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