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Audit shows Orrville received years of unauthorized payments

Published 10:46pm Tuesday, February 5, 2013

ORRVILLE — The town of Orrville will no longer be paid a portion of beer tax collected from the sale of beer within its corporate limits — a tax the town has been collecting since 1994. In the past two years, the beer tax brought in more than $7,000 annually to the town of Orrville.

Lumpkin

Dallas County attorney John Kelly III explained to the Orrville Town Council Monday that the act of legislation from 1994, detailing the distribution of beer tax, had been superseded with an amended legislative act in 1995 — an amendment that did not make any provisions for the town of Orrville.

The beer tax is a sales tax that is not collected at the retail sale but by the distributor.

“When [the distributors] sell beer, they collect the sales tax when they sell it to the ABC board licenses. Then they remit that tax, according to law,” Kelley explained to the council. “In this case, they remit the city of Selma the portion of the sales tax that’s due to the city of Selma, and they remit the rest of it to Dallas County. And the reason for that is, [the distributors] are following a 1995 act that basically says how those proceeds should be distributed.”

The 1994 legislation states that in Dallas County, the entire tax collected on beer sales inside the corporate limits of the town of Orrville shall be paid as follows: 72.23 percent to the town and 27.77 percent shall be paid to the Dallas County Commission. In the same act, beer sales within the city of Selma are given the same provisions.

But when the auditors reviewed the Dallas County Commission’s 2011 fiscal year, they noticed there was an act passed in 1995, which noted in Dallas County, Selma would continue to receive 72 percent of the proceeds from the beer tax and the commission would receive 27 percent, but provided no provisions for the town of Orrville.

“In January, the auditor raised the question saying ‘why is the Dallas County Commission paying these proceeds to the town of Orrville,’” Kelly said. “The auditor looked into it and found the two acts. The 1994 act, but then there is this 1995 act.”

Kelly said it was his opinion that the 1995 act superseded the 1994 act, which excluded Orrville’s rights to a portion of the beer tax sold in town.

“[The 1995 act] had provisions that said any other act of the Legislature, that is contrary to this, is repealed. It had a provision that said this general act can be changed by a local act hereafter adopted,” Kelly said. “The last act said all of these proceeds in Dallas County, outside the city of Selma go to Dallas County Commission, and inside the city of Selma, 72 percent of those proceeds go to the city of Selma.”

Orrville Mayor Louvenia Lumpkin said the issue was brought to her attention in December.

“I inquired about the checks not being made to the town of Orrville, but the person I spoke with told me the check would come. Two or three weeks went by, I called again, and they said the checks would come,” Lumpkin said. “And so when I called in January, they told me that the audit report showed that the town of Orrville didn’t receive any beer tax.”

Lumpkin received a letter from Kelly in January outlining the situation.

Barbara Harrell with the Dallas County Commission office, said the commission hasn’t paid Orrville anything so far this fiscal year, which began Oct. 1, 2012. Harrell said the county commission paid the town of Orrville $7,472 from the beer tax in the 2011 fiscal year and $7,120 in the 2012 fiscal year.

Harrell said the last check for beer tax the commission sent to Orrville was in September.

“They got $729.62 for September 2012, but they haven’t gotten anything in October, November, December or January,” she said.

Dallas County Probate Judge Kim Ballard acknowledged that, while Orrville needs the money, it would be illegal to continue sending the town a check each month, after the discovery of the 1995 act.

“A town as small as Orrville needs every dime they can get, but we cannot send [the beer distributors’] tax money to Orrville. The auditors pointed it out to us that we were illegally doing that and so we had to change that policy,” Ballard said. “And it wasn’t any fault of theirs that they were illegally receiving it. Somebody prior to my watch had misinterpreted the code and thought that we were supposed to send them a portion of the beer tax.”

Ballard added the auditors did not retroactively ask the town of Orrville to pay the commission back for all the time they were illegally receiving those funds.

Kelly offered two possible solutions to the council, and suggested they ask the Attorney General Luther Strange for an opinion and get the legislative delegation to adopt a new act, restoring payments to Orrville.

  • http://www.facebook.com/profile.php?id=1445295330 Kimesha Sunshine Alvarado

    I tell ya!! Perception is a interesting thing! The Dallas County Commission over paid Orville $7000 annually since at least 1994. Almost 20 years! $140,000!

    Fast Forward many of the people in Orville didn’t know they even had an election until this year! The same man has been running unopposed mainly because he eluded to inform the citizens they could run for office in Orville! Can you say corrupt!

    Now to present day, an African American Woman is now Mayor and I guess the good ole boys had to make her already difficult task harder!

    I’m not a race baiter…i believe fair is fair…but for 20 years the Dallas County Commission gave Orville $7000 of money the didn’t deserve. It looks like a blind eye was implemented and now they wanna look good and conduct a phony audit…and they all individually removed their blinders after the African American Woman took the seat!!
    I hope it was an innocent catch, but I doubt it. The county have been fiscally conservative in the past, and it is hard for me to fathom they over looked $140,000.
    Politics is a dirty game! Praying for Orville’s new Mayor. It’s just gonna make her stronger!

    • popdukes12

      Sunshine, this is a normal annual audit that was done by Dallas County every year. The article says that the mayor had done nothing wrong. Dallas County was at fault, Not her. They aren’t asking for the money back. $7,400 out of the county budget is peanuts, but that amount out of a city the size of Orrville is major. Mrs.Lumpkin’s job will become more challenging, but I’m sure the people of Orrville feel she can handle it. Let’s pull for her to be successful in the effort. If Dallas County sends me a $7,400 check, I’ll split it with you. pops

      • http://www.facebook.com/profile.php?id=1445295330 Kimesha Sunshine Alvarado

        I know she isn’t accused of wrong doing!! I know that they are not making the City of Orville repay the oversight! I understand that this audit is an annual event!
        now, back to my post…how can such a fiscally conservative commission overlook this transaction for 20 years!
        come on Pops…your just trying to smooth over my spotting the obviously convenient 20 year oversight that robbed the rest of the county of approximately 140,000 + dollars!
        Someone is not being honest here!
        I am in total support of Mayor Lumpkin’s success. I love that politics gave her the opportunity to become more creative and strengthen her at the same time!
        Perception is reality to many!

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