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Former Bath sheriff defends gas expenses
BY CHARLES GARRATT • STAFF WRITER
 | | Former sheriff Tommy Black says buying gas at the lowest price was the directive to his deputies based on authorization from supervisor Stuart Hall. (Recorder file photo) |
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WARM SPRINGS - Rising fuel prices impact the Bath County budget as much as they do private citizens. While the county struggles to findways to save, a bold move two years ago to reduce fuel costs in the sheriff's department ended up costing the county.
In a November 2007 memo to department employees, former longtime sheriff Charles T. "Tommy" Black told his staff to use the county Visa card to purchase gas at county stations with the lowest price available. The memo said the sheriff was acting at the direction of Stuart Hall, who was chairman of the board of supervisors at the time.
Black said this week then county administrator Claire Collins and Hall directed him to purchase gasoline around the county at the lowest possible price, he generated the memo, dated Nov. 15, 2005, telling his staff, "Mr. Hall has recommended that our deputies purchase gas using the sheriff's officecredit card, with the following rules: 1. Purchase must be made at a location within Bath County and at the lowest price available. 2. All charge tickets or receipts must be turned in as soon as charges are made."
Prior to the memo, sheriff's officeemployees purchased gas at Home Oil and Gas in Mitchelltown, as did other county departments. The other departments continued to purchase gas at Home Oil during 2005 and still do. New Sheriff Larry Norfleetreturned the department to the Home Oil system this year, effective Jan. 1.
"Sheriff Norfleetis saving the county money his way and I saved the county money my way," Black said this week.
The posted price at Home Oil is often among the highest per gallon in the county, Black noted. Prices on the eastern side of the mountain were normally lower than stations along US. 220, he added.
Black estimates his deputies were saving 15 cents per gallon by purchasing at local stations other than Home Oil.
The A&D store, which is no longer in business, often had the lowest price, Black said. Deputies were also allowed to purchase at stations with 24-hour pumps even at higher prices if they needed fuel after hours.
The shift away from the system the county had with Home Oil actually cost the county money rather than saving, Black contends. The 15 cents the sheriff's department saved was eaten up by 36.6 cents in taxes the county paid unnecessarily, he said.
The price for gasoline includes federal and state taxes. Government agencies, including the sheriff's department, are exempt from those taxes- which are currently 36.6 cents per gallon. These taxes are paid by the retailer when fuel is delivered, so the retailer must charge the county for the tax at the time of purchase or it loses money. The county can then apply to appropriate federal and state agencies for a refund of the taxes it paid.
County business manager Betty Mace says the county files with the Virginia Department of Motor Vehicles every month and the federal IRS quarterly for the tax refunds. The refund is based on the number of gallons purchased, since the tax is assessed per gallon.
In the month just before Black's directive to buy gas at the lowest price available, the department had purchased 586 gallons of gas at Home Oil. The county received a refund of $102.46 in state fuel taxes and $107.73 in federal fuel taxes - 15 percent of the total cost of the fuel for the period.
From mid-November 2005 to the end of December 2007, the county did not receive any tax refunds for fuel purchased by the sheriff's department using the Visa cards. At a conservative estimate of fuel usage of 500 gallons per month, that amounts to $2,379 in money paid for taxes but not refunded as it could have been over the course of 26 months.
Black says he did not knowingly fail to apply for the tax refunds.
Mace said Home Oil provides the reports for tax filing and all she has to do is complete the form and mail them. With the sheriff's department not purchasing from Home Oil, she would have not received the necessary data to fileunless it was provided by the sheriff's department.
This is not just a matter of the sheriff's officeand the county not applying for the refunds. Copies of the charge receipts from stations around the county show that little detail about what's bought with the cards is provided on receipts. In most cases, only the total charge for the gasoline is given, not a breakdown showing the number of gallons purchased.
This is important, because the tax refunds can only be requested based on the number of gallons; the tax is based on the number of gallons, not the price paid. Thus, the sheriff's department did not have the information it needed to request the refunds even if it had wanted to, unless deputies had noted the gallons purchased. There is no record that this was done.
Black said he didn't collect the information and apply for the refund simply because he didn't know it needed to be done. No one at the county administrator's office directed him to provide the information or apply for the refund, he said. Supervisors Percy Nowlin and Jon Trees both said this week they hadn't heard anything about the refunds falling through the cracks until the first of this year.
Beginning in January, Norfleetdiscovered the department was not receiving the refunds and switched the department back to the Home Oil system and began applying for the refunds. While Norfleet'sstaff does the paper work and applies for the refund, the tax is returned to the county treasury.
When the tax refund is calculated into the price - the net price paid for gasoline using the Home Oil system is 36.6 cents less than the posted price. The 15 cents saved by station shopping is eaten up and another 21 cents lost.
Trees and Nowlin were on the board in 2005, but neither recalls the board taking any officialaction to direct Black to use county stores instead of Home Oil. Nowlin said if the board did discuss the item, "we didn't talk very long about it" because it doesn't stick in his memory.
In the memo Black sent to his deputies, he states only that Hall recommended the action.
Wednesday, Hall explained that Collins and the board had directed him to make the change to save money.
Hall says receipts from Oak Ridge Station do give full details of the purchase, including the number of gallons. But cop- ies of receipts from Oak Ridge, A&D and Warm Springs Market obtained by The Recorder, all list only the total amount purchased, not the number of gallons.
While the purpose of the move to using the county credit card was to save money, and even though it appears the county did not save any money, one business that benefitedfrom the system was Oak Ridge Station on Route 39 just east of Warm Springs Mountain.
The station is operated by Oak Ridge Station, LLC and managed by Black's wife, Lynn Ellen. Oak Ridge Station, LLC is listed on the financial interest statements filed by Tommy and Lynn Ellen Black as required by state law, showing they have a financial interest in the store. The station opened in August 2005. Records obtained by The Recorder show that then sheriff Black purchased all of the fuel for his officialvehicle at Oak Ridge between November 2005 and Dec. 31, 2007 when he retired - a total of $1,326.
Black told The Recorder he bought his fuel at Oak Ridge because it was convenient and the store's price was at, or only slightly above, the price at competitor A&D. Black says he did not have any influence on the prices his wife's store charged the county, or any other store in the county. His department paid pump price, he said.
Other deputies fueled at Oak Ridge also. For the year 2007, deputies spent $1,870 at Oak Ridge.
Black said of the four local stores where deputies fueled frequently, A&D usually received the most purchases and Oak Ridge the least. The Recorder did not have the data available to confirmthis conclusion. Based on the total department budget for fuel, purchases at Oak Ridge amounted to about 10 percent of the total budget.
Last week, supervisor Hall confirmedhe had authorized Black to stop using the system at Home Oil, and the sheriff specificallytold deputies to avoid using Oak Ridge Station except in emergencies to "avoid the appearance of conflictof interest."
The best of both worlds for the county would appear to be able to shop for price and also receive the tax refund. Black noted his administrative assistant had already been spending two days per month on the credit card transactions.
Home Oil provides details, including the vehicle, mileage, person charging, along with number of gallons for each purchase. It also gives the county the refund forms printed and ready to fileon a monthly basis, according to county administrator Bonnie Johnson.
David Walrond, owner of Home Oil, declined to comment on why he provides the information to the county and his arrangement with the county. While it is part of good customer service, he said he doesn't discuss the business details of any of his customers unless they ask him to do so.
Home Oil has its own card, central billing, and record keeping system, and was the first station in the county to provide fuel 24 hours a day, seven days a week, using Home Oil cards. This information has been widely advertised. For individual convenience stores to collect, store and supply the same information to the county might be cost prohibitive. The county would have to collect the information and prepare the reports. Any savings might be eaten up with administrative costs.
Hall said the county negotiated with the Virginia Department of Transportation three years ago to use the two VDOT facilities in the county.
VDOT purchases fuel on a statewide contract at reduced prices, receives tanker truck load deliveries and does not pay tax on the fuel, said Johnson. If the county could purchase directly from the state, it might receive a lower price and not have to tie up time and money in the tax refund process.
The county is now again negotiating with the VDOT to gas up at one of the two equipment sites in the county. The facilities would not be available to county vehicles except for the limited weekday hours those are normally open, a definiteproblem for the county, Johnson noted.
Like many other issues facing Bath County government, there doesn't seem to be a simple answer. Everyone seems to agree the county needs to save money on fuel, but all say that doing so is easier than it actually is.
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