Localities join in companies' sales pitches

The offer that recently hit DeKalb County mailboxes was clear: Switching to Gas South would save county residents money. Less clear was why the pitch, in a DeKalb County envelope, carried the county's logo and signatures of the CEO and entire County Commission. 

It did not mention that the county gets a payment for every customer who signs up. 

That's the latest example of how cash-strapped metro Atlanta governments are turning to partnerships with private companies to help plug budget gaps. 

The arrangements are legal. But some residents question whether they're appropriate or blur the line between elected officials and corporate interests. Local government officials say they're using creative measures to attract new revenue as they wrestle with budget shortfalls. 

DeKalb is the first county with this arrangement with Gas South. But the company has similar deals with 10 metro cities and a half-dozen local utilities. Earlier this year, Atlanta offered a similar promotion with Utility Service Partners, which offers warranty coverage, in a mailing on government letterhead, for sewer connections. A handful of smaller cities, including Powder Springs and Union City, also have similar arrangements with that company. 

One Gas South competitor, Georgia Natural Gas, declined to comment on the marketing alliances. It does not have a similar program. 

Martha Evans felt so strongly that the DeKalb County mailing was wrong that she reported it to the state Public Service Commission, which regulates utilities. The PSC determined the marketing is legal, but Evans said she is sticking with her current natural gas provider out of principle. 

"It did not in any way tempt me to change. It just raised my suspicions," said Evans, an internal communications manager from the Briarlake area. "And if this is the best way they can come up with to balance a government budget, they're not trying hard enough." 

In all cases, the governments earn a finder's fee for use of their name. Atlanta made $30,000 in the first three months of the sewer warranty program. Kennesaw, the first city to make a deal with Gas South, has made nearly $100,000 in five years, and all of the communities combined have made close to $5 million. 

For every residential and commercial customer in DeKalb that signs up for Gas South, the county will receive $12 and $24 respectively. For their part, the customers get a discount of 2 cents per therm for as long as they remain with the service. 

DeKalb County spokesman Burke Brennan said, "It's something new and different. But ultimately, we hope it's something that will affect our ability to provide services to all residents without raising taxes." 

With about 700 people signed up so far in DeKalb, the $8,400 income is a drop in the bucket for a general fund of $556 million. Governments can also earn over time, since they receive annual payouts for customers who stay with Gas South. 

Kennesaw has turned 901 gas customers into a nearly $100,000 revenue stream to help it develop Swift-Cantrell Park. While that's just a little money relative to the city's $17.8 million budget, the cash is helping it plan more features for the 42-acre site that already has playgrounds, pavilions and a dog park. 

"While it's not a lot, every little bit helps," said Mayor Mark Mathews. "It helps us leverage additional funds, like with grants, without using tax dollars." 

Mathews said no Kennesaw residents have complained about the sales pitches in their mail or the city's involvement. DeKalb has received a handful of objections, though Brennan said many people complaining relent when they learn details of the program. 

For its part, Gas South said it wants to help local governments shore up their budgets because, CEO Kevin Greiner said, as the relatively new kid on the block, it wants to become more engaged and better known in the community. 

"We are certainly open to discussing the potential with other counties in the metro area," he said. "We see it as a win-win." 

But some residents are turned off by the tactic. 

"What bothers me is some people may think they have to change because it looks so official when it isn't," said Rosalie Baine, a retired scientist at the Centers for Disease Control in north DeKalb who said she would have tossed the pitch in the trash if she'd known was it was. "It looked like my water bill." 

David Heyzer, an attorney from Northlake, said he understands the legality and the incentive but finds the whole thing misleading. 

"Corporations are going to do whatever they can get away with," Heyzer said. "It's more concerning that government is willing to dilute its good name to do the same." 

DeKalb County chief executive Burrell Ellis reported no contributions from Gas South in the current election cycles. Greiner, the company's CEO, gave $150 each to the campaigns of Commissioner Elaine Boyer and Kathie Gannon this year. 

Marketing deals with localities 

- Gas South: 

Acworth, College Park, Fairburn, Kennesaw, Marietta, Norcross, Roswell, Sandy Springs, Woodstock and Union City. 

- Utility Service Partners: 

Atlanta, Auburn, Powder Springs, Garden City and Union City. 

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