Tuesday, November 25, 2003

Inside City Hall

Plenty of blame to spread for Empire disaster

Of the thousands of pages of documents the city turned over to the federal grand jury investigating the Empire Theater scandal, the seven-page statement that Peg Moertl gave to internal auditors is the most intriguing.

In it, the soon-to-be-former community development director provided an account of being caught between impatient elected officials and an ineffective bureaucracy that literally lost the manual on small business development.

The result: the city released $184,172 to a developer who is now wanted by the FBI, and the Vine Street theater is now a pile of rubble.

Maria Collins, the development officer most directly responsible for the Empire project, was being unfairly portrayed as a "Little Bo Peep" who was a "victim of management," Moertl said. She also said she was upset with Collins' boss, Ron Regula, who says he had nothing to do with the project but who Moertl says sat in on meetings with the developer and representatives from the mayor's and vice mayor's offices.

There was pressure from the top, too, she said. Moertl said that when she met with the Covedale Theater principals and asked them to provide a business plan, Mayor Charlie Luken "responded in anger."

"They're a non-profit organization. They've been around forever. What are you talking about, a business plan?" Luken said.

Moertl said she received similar pressure from a "variety of people" in the Empire project. Vice Mayor Alicia Reece wanted to make sure arts funds were going to minorities, she said, and council members were calling her telling her to "get it done."

"It's no wonder the department goes through directors like water," Moertl said.

Moertl suggests that the bureaucracy undermined her from the beginning, saying she was "set up." She said auditors should be asking questions about why City Council approved the project without a recommendation from her department. Indeed, she said, City Council never asked for a report.

And then, as she was leaving the Oct. 8 meeting with Internal Audit director Mark Ashworth and investigator Kimberlee Gray, Moertl said, "I will tell you everything that happened after I leave the city."

Moertl said she regrets that last remark.

"I was so furious at that first draft of the report. I thought there was a lot of bias in it," she said in an interview. "There's no smoking gun, no big surprise coming when I leave."

Your tax money

At the end of each fiscal year, Cincinnati City Council passes a Final Adjustment Ordinance to pay for city spending not included in the annual budget. It's a routine ordinance, but it provides a good insight into the hidden costs of City Council initiatives - even those that are supposed to be "revenue neutral." To wit:

 $35,000 for the Recreation Commission to put on a tree-lighting ceremony on Fountain Square.

 $50,000 for the Society for the Prevention of Cruelty to Animals to take in dogs abandoned because of the "pit bull" ban.

 $101,000 for the Police Department to implement the tax on alarm systems - a tax City Council later repealed after hundreds of angry taxpayers complained. The Police Department's costs included printing and mailing of the tax bills, the printing and mailing of the notice of the repeal, and the processing of 1,500 refunds.

 $208,000 for Community Development to carry out the council's mandates on the "living wage" and "prompt pay" ordinances and affirmative-action programs.


E-mail gkorte@enquirer.com

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