A Montgomery County Council member will introduce legislation to stop developers from collecting payments from multiple government agencies for the same work, after an article in The Washington Examiner found that county taxpayers were charged twice for a multimillion-dollar water pumping station. “You can’t get paid for something that you’ve already collected on,” said Councilman Marc Elrich, D-at large, who is drafting the bill. “This should never happen again.”
The Washington Suburban Sanitary Commission, the water agency for Montgomery and Prince George’s counties, gave $2 million in payments and credits to developers for a wastewater pumping station in the West Germantown Development District. In that area, residents pay additional taxes for infrastructure improvements in the community.
However, the developers, the Artery Group of Bethesda and Arcola Investment Associates of Hyattsville, already had been paid by the county through bonds financed by taxpayers in the development district, multiple county sources said.
County officials have made no efforts to recoup the money. And Elrich called such an effort unlikely, adding that developers “apparently found a loophole in the system” rather than violate any law.
Sources said that top brass in County Executive Ike Leggett’s administration were aware of the double payment but chose not to stop it. Leggett’s representatives did not respond to calls for comment.
In essence, developers were reimbursed nearly $2 for every $1 spent, as the county ultimately paid $3.7 million for the pumping station and water main before the WSSC devoted roughly $2 million to the same project.
A lawyer for the developers said his clients “followed the rules.”
Montgomery County Inspector General Thomas Dagley, who has initiated an investigation into the double payment, says he will propose that the county require more oversight of capital projects. The protocol would be similar to an arrangement at WSSC, where policy was altered after auditors discovered the repetitious payments for the Germantown water pump.
“We recommend the council consider new legislation requiring independent audits of higher risk capital projects,” he told The Examiner.
A previous report by the county’s Office of Legislative Oversight highlighted the potential for duplicate payments made by residents of a development district and other public sources. However, the council never changed the regulations.
“It’s troublesome,” Elrich said of the inaction by county officials. “I lack any plausible explanation for why the issue wasn’t addressed.”
bhughes@washingtonexaminer.com
