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Where did the money go?

Andy Ouriel • Jan 13, 2014 at 8:57 AM

For months, Sandusky officials have complained about vital income sources drying up, generating a huge deficit in this year’s budget.

But they should also blame themselves for mismanaging taxpayer dollars creating a financial catastrophe.

Less money given from the state paired with a major firefighter employment grant expiring a few weeks ago greatly contributed to Sandusky’s looming $1.1 million budget deficit.

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Surely some increases in expenses couldn’t be avoided, such as health insurance costs surging, a trend handcuffing most governments and private industry.

But a Register analysis, compiled through public records requests, determined city officials wasted or carelessly spent at least $293,000 in taxpayer funds in 2013. The figure couldn’t completely bail out officials from this deficit. But it would’ve definitely eased a burdensome process, calling for multiple layoffs and numerous reductions to city services.

Among the incidents of negligent spending:

Incident No. 1: Poorly negotiated union raises

• Money misspent: $394,000 over three-year period; or about $125,000 in 2013.

• What went wrong: City officials negotiated wage increases for all unionized employees, despite not having enough money to do so. Now they must lay off employees to help erase a shortfall.

• Explanation: About 170 employees, including police officers and firefighters, obtained a 1.5 percent wage increase in each year from 2013 through 2015.

The raise occurred although city officials knew full well a deficit loomed.    

A $1.1 million shortfall derives from several factors. The two primary reasons, however, involve Sandusky obtaining less money from the state along with a $500,000 federal grant employing six full-time firefighter positions that expired in December.

The only way to offset this red ink is to lay off workers.

Payroll accounts for up to 85 percent of Sandusky’s $16.3 million 2014 budget, covering services such as police and fire.

City commissioners recently agreed on a working model to reduce the deficit, which includes axing six full-time firefighters and removing one full-time police position along with other cuts.

Numerous departments — parks and recreation, streets, engineering and the greenhouse, among others — are also being scrutinized for possible reductions in resources.

To some, giving out raises while at the same time contemplating — and later implementing — layoffs seems puzzling.

“I don’t understand the logic at all,” said commissioner Dick Brady, who began his term this month. “It sounds like 1.5 percent raise a year for three years is a terrific bargain for our city, but not when you look at the overall context of where our city is going. Did anyone factor in our losses when giving these raises? Where did they think this money would come from?”

Incident No. 2: Sandusky police love triangle

• Money misspent: At least $72,000

• What went wrong: Sandusky officials, according to an arbitrator, unjustly terminated two police officers involved in a “sexting” scandal.

• Explanation: In April 2012, city manager Nicole Ard fired Sandusky police officers Stephen Ritterbach and Todd Smith.

Their firings resulted from an internal police investigation involving Ritterbach, Smith and Ritterbach’s wife, Jennifer.

Among the report’s findings: Jennifer asked Smith to have sex with both her and Ritterbach in late 2011. Smith also sent a picture of his private parts to Jennifer.

Sometime afterward, Ritterbach discovered Smith and Jennifer exchanged nude images via text messaging, and he later threatened to shoot Smith. Ritterbach’s and Smith’s tribulations mirror one another to a particular point. Both were fired for their alleged actions. Both received vindication through arbitration when, in separate cases, a judge ordered each one must return to the police department. They’re also both entitled to receive compensation for any time they missed or couldn’t work because of the firings.

But the similarities stop there.

City officials never disputed Ritterbach’s comeback — demoted from a sergeant to officer upon returning in February 2013 — but are fighting Smith’s return. In May, Ard filed paperwork protesting the arbitrator’s decision.

Why they’re battling Smith’s decision, and not Ritterbach’s, is seemingly a mystery.

Ard fired Ritterbach for conduct unbecoming of an officer, harassment, making inappropriate comments, gossip, spreading false information about staff, dishonesty and insubordination. Smith was fined for similar reasons.

Ritterbach received $22,000 in back pay.

Smith, meanwhile, could obtain at least $50,000 in back pay. He could make more, considering city officials haven’t pinpointed exactly what he’s owed.

In early 2013, an arbitrator said Smith must return, writing off his misdeeds as nothing more than a “late-night soap opera on Telemundo” and “comparable to any other officer’s off-duty review of the content of Playboy magazine or watching an X-rated film.”

Incident No. 3: Cedar Point Chaussee lawsuit

• Money misspent: $50,000

• What went wrong: Both local and state judges scorned city officials when attempting to prohibit some area property owners from renting out their homes to tourists.

• Explanation: City officials started a two-year fight in summer 2011, attempting to forbid people — primarily on the Cedar Point Chaussee — from letting vacationers pay to stay at their swanky pads.

The homeowners finally received vindication in June when a state court upheld all homeowners’ rights to rent out their homes.

This decision piggybacked off Erie County Common Pleas Court Judge Tygh Tone’s ruling in A vacation rental home 2012, supporting on the Chaussee. homeowners and slamming Sandusky’s legal counsel.

City taxpayers fronted about $50,000 in an unsuccessful legal effort.

“Because the city was playing with house money, it was poised to continue to fight this fight when there was no real common-sense basis to do so,” said Doug Ebner, one of several property owners city officials targeted in the lawsuit. “Now that the final decision has been issued, I would hope the city would do the right thing and reimburse the property owners for the tens of thousands of dollars they spent in defending these prosecutions.”

City officials ultimately agreed to drop the legal battle altogether shortly after the state’s decision.

Incident No. 4: Botched police chief search

• Money misspent: $25,000

• What went wrong: A volunteer selection committee charged with finding Sandusky’s next top cop violated city laws, disqualifying certain candidates and prolonging a costly process.

• Explanation: A legal fiasco, two separate searches and countless ethical questions haunted a search team’s yearlong effort to find Sandusky’s new police chief.

In September, former city commissioner Diedre Cole questioned the process.

Cole’s probing spurred commission to hire an attorney to investigate the situation.

Shortly thereafter, that attorney determined three of the original five finalists selected were ineligible for the position.

In short, they weren’t active full-time officers when applying — a mandatory qualification for hiring a police chief outlined in Sandusky’s bylaws.

City officials determined to reset the process, starting an entirely new search. Ard, responsible for selecting a police chief, ultimately chose John Orzech, a longtime Sandusky police officer and commander.

But the city’s negligence cost taxpayers about $25,000 that could’ve been avoided with a properly conducted search.

“There is little question that it could have been done differently and handled much better,” commissioner Wes Poole said. “The money is spent now, and we are not going to get it back.”

Incident No. 5: Panicking on purchasing security alarms

• Money misspent: $21,000

• What went wrong: Commissioners panicked when pressed for details about an expensive alert system.

• Explanation: Despite being confused about the issue, commissioners still plowed forward, agreeing to spend $21,000 on either installing or enhancing panic alarms in City Hall.

Commissioners agreed to this deal without knowing what the alarms did or where they’d go in City Hall.

Commissioners, past and present, voted on the issue before engaging in any sort of discussion.

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