A probe of the Metropolitan Sewer District has deepened from charges of bad management to potential criminality.
Thursday, a Hamilton County grand jury began investigation of illegal fee waivers and incomplete billings of $113,000. Three top MSD supervisors were subpoenaed and gave testimony to the grand jury.
Sources said the probe involves other matters, but would not elaborate except to say that it is something that has arisen since Hamilton County commissioners ordered an administrative review 10 days ago.
Because of the new criminal investigation, County Administrator David Krings suspended the administrative review indefinitely. ''It's important . . . to have this (grand jury) review so we can be set once and for all whether there are significant violations of the law or not,'' Mr. Krings said.
Thomas J. Quinn, director of the Metropolitan Sewer District (MSD), refused an interview but issued this statement: ''I am declining to comment on any of the subjects that are being considered by the grand jury and auditors at this time.''
Prosecutors also declined comment, citing the secrecy attached to grand jury proceedings.
Meanwhile, Cincinnati's internal audit department has made MSD its top priority, per order of the city manager, said audit manager Greg Hanfbauer. The MSD is a county agency that is run under contract by the city.
City Councilman Charles Winburn, who called for an independent review of MSD in late February, said Mr. Quinn should be removed from his post for now so that whistleblowers will feel safe from retaliation.
''I am very puzzled that (City Manager) John Shirey is dragging his feet and has not reassigned Tom Quinn,'' Mr. Winburn said.
Mr. Shirey was unavailable for comment. Deputy City Manager Richard Mendes declined to comment.
Subpoenaed to testify were Joseph Niehaus, superintendent of MSD's planning and program management division, which oversees capital spending, and a man who reports to him, Thomas Schwiers. Anthony Huang, superintendent of the engineering division, was also subpoenaed and asked to bring contracts and payment records related to work by JMA Consultants, as well as interdepartmental memos and correspondence regarding hook-up fee waivers.
They said the prosecutor advised them not to talk about the grand jury.
JMA Consultants, which had been working on a rainwater diversion program for the sewer district, has not been able to produce complete paperwork for $113,000 in billings, according to MSD records. JMA's principal, William McCormick, met with sewer officials Friday to try to work things out. The staff reported to Mr. Quinn that the paperwork is still incomplete.
MSD records show that Mr. Huang and his staff first brought concerns about JMA's bills to Mr. Quinn last April.
On March 9, Mr. Quinn forwarded documents to the prosecutor to see if further action was needed, MSD records show.
Mr. McCormick was unavailable Friday for comment.
The rainwater program involves rerouting downspouts so they no longer flow into sewer pipes. It saves sewer plants from processing the clean water, which means Hamilton County can build fewer plants. The fee-waiver problems involve MSD pledges to reimburse three developers for building oversize sewer pipes in western Hamilton County. MSD promised $100,000 each to VRE Inc., Drees Co. and Biederman Educational Centers.
The money was to be paid as each developer connected to the sewer system and MSD waived fees for the connections. The fees are $2,500 for each single-family home.
In a September opinion sent to MSD, the county prosecutor said the waiver program is illegal: ''. . . There is no statutory authority to waive tap-in fees to 'purchase' a privately constructed sewer line.''
Paying for oversized sewer mains is permitted, the opinion said, but not with fee waivers.
Seven waivers were issued after that September opinion, Mr. Quinn has said. He said he told Mr. Huang to stop issuing them, but Mr. Huang either didn't hear him or didn't understand.
Mr. Huang has said he was never told to stop.
County commission President Tom Neyer Jr. said he hopes the grand jury probe exonerates Mr. Quinn.
''There's no question that Mr. Quinn has improved the professionalism and results of MSD during his tenure,'' Mr. Neyer said. ''The results of this investigation will hopefully reveal that all his i's are dotted and t's are crossed appropriately.''