Keeping in mind there's 3 sides to every story, if this is remotely true (and I'm sure it's more than remotely true) then that's totally messed up.
The idea that there wouldn't even be elections for 70 years it's hard to wrap my head around. On the other hand, this is a community of 300 people. When you're dealing with such a small number of people, a lot of messed up stuff can happen.
Probably a number of different motives. Yes a degree of racism, but also a degree of nepotism and desperation. All those people are unemployed because there's nothing to do except work in government in that town, so of course parents are going to try to get their kids into government positions using their current position of power. Then there'd obviously be a deep chasm of classism, since the government worker class would be on a completely different level than the unemployed class in many ways, and I'm sure they look down their nose at the 'unwashed masses' (who are overwhelmingly black since that's where the south came from).
Unethical? Super unethical. And immoral. And illegal. And virtually everyone in government should be fired and charged personally with 1983/1984 claims.
But also a reminder that we need to remember there's a lot of tragedies in our back yard and they won't go away if we just ignore them.
How big do you think the government of a town of a couple hundred people is? It's probably like half a dozen people. The mayor, the sheriff, the judge, the clerk, and the treasurer. There's not much "government" to work in. I am familiar with towns like this.