State: Salmon received water bill credit for “leaky hose”

While City Manager Tim Salmon was recommending water rate increases for Goldsboro residents, he did so with the knowledge that he was one of the recipients of a credit to his water account for a “leaky hose” — just one of dozens of undocumented credits awarded to city employees, elected officials, and some of their family members discovered during an audit of the city’s finances that began in 2022 after State Treasurer Dale Folwell blew the whistle on how business was conducted inside City Hall amid Goldsboro’s inability to hit financial reporting deadlines.

In a report drafted by the North Carolina State Auditor’s Office and sent to Salmon Jan. 12, officials identified six “issues” of concern.

Several of them, according to auditors, were reflective of a lack of oversight by Goldsboro leaders and had the potential to “erode” the public’s trust in its local government.

When it came to the Water Department, the report, which was obtained by New Old North through a confidential source, alleged that “inaction from city leadership” led to everything from an employee crediting her mother’s water account 11 times and former City Council members receiving grace after, in one case, failing to pay a water bill for more than four years without disconnection to officials “wasting” 2.2 million gallons of the city’s water and sewer services “by distributing water without collecting payments.”

The state also found, after a review of the account billing history for 36 accounts that were “delinquent and/or in the name of a City employee or elected official” from July 2019 to June 2022, that 24 balance credits had been made to those accounts without justification that they were necessary, calculated correctly, or approved by the unidentified “Utility Customer Service Supervisor.”

“Since the Utility Department did not have supporting documentation … auditors could not determine how many gallons of water and sewer usage were unpaid,” the report reads.

One of those credits was allegedly given to Salmon, who earns more than $160,000 a year.

Others implicated by the state include two former City Council members, a current Wayne County commissioner, and a current member of the City Council and their mother. (Once their names are independently verified, they will be published here.)

The problem, according to auditors, is mainly perception — that Goldsboro leaders giving elected officials, city employees, and their family members grace that may or may not have been extended to the general public “risked giving the appearance of unequal treatment.”

“Equal treatment by the government is a key responsibility for government leaders,” the report reads. “Standards from the United States Government Accountability Office state that those entrusted with public resources are responsible for providing service to the public effectively, efficiently, economically, ethically, and equitably.”

Members of the current City Council participated in two marathon closed sessions Monday and Tuesday — with the second ending well after midnight.

And while it is unclear whether Salmon provided documentation to support the credit made to his water account, a state source with direct knowledge of the investigation that resulted in the preliminary report sent to City Hall said the manager was unable to explain why he was given what auditors perceived as “preferential treatment.”

The state, in its report, blamed leaders inside City Hall — both the current leadership team and the people who held the posts before them — for failing to develop “written policies and procedures to govern utility operations.”

The findings related to the Water Department include:

• A former member of the City Council did not have their utility services cut off, despite accruing a debt of more than $4,700 over more than four years.

• A former City Council member was delinquent on two separate occasions — for a total of 1,392 days — and did not have their utility services cut off, despite carrying a debt of $798.

• A current city employee was delinquent on three separate occasions — for a total of 3,111 days — and did not have their utility services cut off, despite carrying a debt of $1,466.

• Auditors reviewed the detailed account balance history for 19 accounts that were delinquent from July 1, 2019, to June 30, 2022, and found that the Utility Department did not cut off the 19 accounts until between 34 and 817 days after what should have been the cut-off date. From that date until their eventual cutoff, those customers used approximately 2.19 million gallons of water and sewer services without paying.

• Auditors found that the Utility Department did not detect in a timely manner, or, in some cases, at all, the illegal reconnection of utility services on accounts that had been cut off. They reviewed 167 accounts that were delinquent between October 2020 and November 2022 for nonpayment and determined that 9 percent of the customers illegally reconnected their service and resumed usage.

• Auditors determined that the city failed to collect at least $24,537 in water and sewer services provided to delinquent accounts with untimely disconnections.

• Auditors determined that the city failed to collect $1,012 in stolen water and sewer services.

• Auditors determined that the city failed to collect $40,520 because of “unsupported balance credits.”

• A current Goldsboro employee allegedly used their position to credit their mother’s utility account nearly a dozen times between Jan. 30, 2019, and March 30, 2022, to reduce her water bill by more than $400 — an alleged crime state officials blame on inaction from city leaders.

It is unclear how the current council plans to rectify the water issues identified in the preliminary report, but auditors asked for the city’s response — and any documentation that could be used to refute the claims — by Friday. Whether or not Salmon and his team hit that deadline remains to be seen.

But the state was clear that at the very least, the optics of perceived preferential treatment could have repercussions in the court of public opinion.

“Unequal treatment could prevent the proper operation of democratic government by threatening the public’s confidence,” the report reads. “For example, the City Code of Ethics states: The proper operation of democratic government requires that public officials and employees by independent, impartial and responsible to the people … that public office not be used for personal gain, and that the public have confidence in the integrity of its government.”

Calls to Salmon for comment have not been returned.