Montgomery County Executive Ike Leggett’s administration Monday rejected the findings of an inspector general’s report saying taxpayers were billed twice for costly construction work in West Germantown. “There were no double payments,” Montgomery Finance Director Jennifer Barrett told County Council members at a hearing on the report Monday. She said Inspector General Thomas Dagley’s report was incomplete.
Dagley found that two county government agencies together paid about $6.7 million in cash and credits to developers for a wastewater pumping station that cost between $3.2 million and $3.7 million — transactions first reported by The Washington Examiner in November.
The county paid $3.7 million between 2002 and 2003 to the developers, the Artery Group of Bethesda and Arcola Investment Associates of Hyattsville.
Between 2005 and 2006, the Washington Suburban Sanitary Commission — the water agency for Montgomery and Prince George’s counties — also shelled out $2.9 million in cash and credits to the developers.
The builders also secured private financing, according to Sue Richards, a program evaluator for the Montgomery County Office of Legislative Oversight.
“The thing is, it was money for the same facilities and that’s really where the nexus was,” she said.
Barrett and County Attorney Marc Hansen defended the government’s expenditure, saying it was a loan to the developers aimed at financing the project — not footing the bill.
But some council members didn’t buy the argument.
“How is getting $6.6 million for a project that cost $3.8 million not getting paid more?” asked Councilman Marc Elrich, D-at large. “Am I missing something?”
Several council members complained that details on the transactions — where the taxpayer money went and how it was used — remain unclear. Dagley said he was unable to obtain many of those details from the executive office.
“We need to understand … who ultimately received those dollars and the reasons that they did,” said Dagley.
Councilman Hans Riemer, D-at large, said he is particularly concerned about the taxpayers in West Germantown, where residents pay additional taxes for community improvements.
“There is something fundamentally wrong with this,” Elrich added.
Councilman Roger Berliner, D-Potomac, turned the spotlight on Dagley.
He questioned Dagley’s judgment in referring his findings to law enforcement for an investigation into possible criminal misconduct and pressed him for information on how The Washington Examiner learned of the report before it was published.
Berliner also scolded Dagley for releasing the report before the county executive — who had already delayed publication once — prepared a formal response.
Regardless of whether the developers were in fact paid twice, the incident has revealed that the county must improve its policies on paying developers, said Council President Valerie Ervin.
“This is something that keeps coming back like a bad penny,” Ervin said. “It’s time for us to get some sort of … conclusions drawn.”
