Top officials in Montgomery County Executive Ike Leggett’s administration are fighting with the jurisdiction’s top watchdog over a damning audit that says developers collected payments from two government agencies for the same work, ultimately leaving taxpayers on the hook for millions of dollars. The Washington Suburban Sanitary Commission, the water agency for Montgomery and Prince George’s counties, gave roughly $3 million in payments and credits to developers for a wastewater pumping station in the West Germantown Development District — an area where residents pay additional taxes for improvements in the community — according to a report from Inspector General Thomas Dagley.
However, the developers, the Artery Group of Bethesda and Arcola Investment Associates of Hyattsville, already had been paid more than $3 million by the county through bonds financed by taxpayers in the development district, the inspector general said — concerns first reported by The Washington Examiner in November.
In other words, the developers collected more than twice what they invested in the pumping station and water main, Dagley found.
But Chief Administrative Officer Tim Firestine is calling those claims both “unfortunate and unprofessional.”
“The [inspector general’s] recommendation is of great concern, because it implies wrongdoing and potential financial loss without any actual findings or basis in his report for such an assertion,” he wrote to county officials. “The county and the WSSC have found that all payments and reimbursements made to the developers or their representative were legal and proper.”
The Firestine memo was sent before a County Council hearing Monday on Dagley’s report.
The spat is just another chapter in a tumultuous relationship between the outgoing inspector general and Leggett. Dagley has accused some in the executive branch of interfering with his investigations.
In dismissing the findings, Firestine said that without payments from both the county and WSSC, the cost would have been passed on to homeowners in the development district.
Yet, before paying developers, WSSC officials contacted the county’s Finance Department about the billing for the pump — but were turned away, records show.
Council members say they will draft legislation to block similar arrangements, as well as demand a refund from developers if they aren’t swayed by Leggett’s representatives.
“It looks to me like there was a double payment,” said Councilman Marc Elrich, D-at large. “It doesn’t matter where the money came from. This is just wrong.”
Stephen Kaufman, a lawyer with prominent land-use firm Linowes and Blocher, which represents Artery and Arcola, acknowledged that developers received payments from both the county and WSSC but said they didn’t violate county law.
“It’s essentially just a loan,” he previously told The Examiner. “They only followed the rules. All I can tell you is the policies were followed by our clients.”
