Government

City Hires Architect to Review Wastewater Grant Work

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YOUNGSTOWN, Ohio – The city today hired a local architect to review water, wastewater and environmental sanitation-related grants it awards for economic development projects.

The action follows up on a recommendation resulting from Ohio Auditor David Yost’s 2014 audit of the city, which prompted a review by the auditor earlier this year of such grants awarded to NYO Property Group.

This morning, the city Board of Control – Mayor John McNally, Finance Director David Bozanich and Law Director Martin Hume – approved hiring architect Paul J. Ricciuti “for services necessary to verify the completion of work and assess the reasonableness of costs pertaining to the city’s economic development grant program,” specifically for grants related to the water, wastewater and environmental sanitation funds.

Under the professional services agreement, Ricciuti will be paid $165 per hour, not to exceed $25,000 for the term of the contract. The contract runs from Dec. 1 to Nov. 30, 2017.

The review “provides just another level of assurance” regarding how funds the city provides to developers for eligible water and wastewater expenses are used, and that “everything is transparent” to city residents, McNally said.

“When granting monies to a private developer, the city should review the work done by the private contractor to determine the work done was actually done, and is appropriate for the costs being charged,” Yost wrote in an Oct. 12 letter to city officials following completion of the 2014 audit in October.

City officials said no particular incident triggered the move. However, the auditor’s letter specifically pointed to a $500,000 grant made to a “private developer for water and sewer purposes for economic development. Though documentation supporting the expenditures was submitted, there was “no indication” that the city had reviewed the work done by the developer to verify the work was done and the costs were appropriate.

In 2014, the city awarded $500,000 in water and wastewater funds to support NYO Property Group’s redevelopment of the Wick Tower downtown as an apartment building. Earlier this year, Yost’s office sought financial records related to how NYO spent more than $1.7 million in water and wastewater grants funds provided by the city.

The auditor’s office “wanted to make sure that there’s accountability connected with the giving of those grants,” Hume said. State auditors “asked that there be verification that both the work was done and the cost was reasonable,” he added.

“It’s just a precautionary measure,” T. Sharon Woodberry, director of economic and community development. “There are concerns that have been raised form the audits that we had and so although we felt that we provided documentation, this was another step that [the auditor] asked for and this was the best way of accommodating that.”

Published by The Business Journal, Youngstown, Ohio.