One reason Montgomery County is in such deep financial straits is that it has been overpaying developers, including $3.7 million for the same Germantown pumping station and water main for which they were also reimbursed by the Washington Suburban Sanitary District, according to a Feb. 15 interim report by county Inspector General Thomas Dagley. In 2005, at the beginning of the project, WSSC said it would reimburse the developers even though the project was being financed with tax-exempt Montgomery County bonds. However, an unnamed official in the county’s Finance Department refused to issue an assignment letter to WSSC. And when Dagley’s office later asked for documentation to support the cash payments, “OIG was not provided any purchase orders, invoices, or other detailed financial records by MCG Department of Finance that supported the developers’ requests for reimbursements as required by MCG procedures.” The double payments made between 2002 and 2006 are remarkably consistent — down to the last penny. For example, Montgomery County paid Woodcliffe Development District $37,176.23 on April 11, 2002, for a parking lot. Four years later, WSSC paid Arcola Investment Associates $37,176.23 for the same lot. Dagley also reports that interviews with top county officials, including Finance Director Jennifer Barrett, failed to “clarify why the developers were reimbursed the same or similar costs by both WSSC and MCG.” A call to Barrett’s office was not returned.
These expenditures are either waste that cannot be simply chalked up to poor management, or perhaps something even more serious. Besides confirming three of six commissioners who oversee WSSC, a 2009 law signed by Maryland Gov. Martin O’Malley gave the Montgomery County Council authorization to audit WSSC’s books under certain circumstances. But with power comes responsibility. In 2007, council members refused to change regulations that would have expressly precluded the possibility of double-dipping. They should do so now as soon as possible, and reimburse taxpayers in the West Germantown Development District who are being forced to pay twice for the same infrastructure.
But that’s just the beginning of making this right. Dagley timidly suggests the council review all fiscal, ethical and legal issues that led to the fraudulent double payments, but stops short of recommending a full council hearing and a formal criminal investigation. But with the recent memory of the former county executive in neighboring Prince George’s County being indicted for taking kickbacks from developers, how can Montgomery County officials do anything less?
