One Port Clinton administrator resigned and another was demoted as the result of an investigation into missing scrap metal.
Rich Babcock resigned as safety service director and Kenneth Heschel was demoted from service department supervisor to heavy equipment operator, a position he held before.
Marshall & Melhorn, a Toledo law firm, headed up the investigation on behalf of the city and determined that Heschel and Babcock had sold city-owned scrap metal with the intent to contribute it to a cash slush fund. Babcock and Heschel also knew that city employees had an established fund that came from selling scrap metal.
Mayor Tom Brown said via a letter that violations of the city's written policies did occur.
"As a senior non-elected official in the city administration, Mr. Babcock had a duty to set a proper example and ensure that he and other city employees abided by the city's established written policies," Brown said.
Brown also said Ottawa County Prosecutor Mark Mulligan is conducting a separate investigation to determine whether the policy violations warrant the filing of criminal charges.
Acting City Auditor Steve Benko said the prosecutor's investigation began Monday.
The question of missing scrap metal arose in April when Heschel gave then-City Auditor Nancy O'Neal $1,200 without a receipt. Heschel said it was from selling city-owned scrap metal to Burns Iron & Metal Co. in Fremont.
According to city policy, money along with written documentation needs to be submitted to the auditor's office. O'Neal therefore asked Heschel to provide a receipt to account for the $1,200 sale.
After three months without a receipt, Deputy Auditor Rachel Klimentov contacted Burns Iron & Metal. According to the report, the scrap metal company had purchase orders from the city going from 2004 to the present totaling $6,992.22. None of those receipts was for $1,200.
The auditor's office received only $4,308.09 over during the same time period, including the undocumented $1,200. Based on these figures, $2,684.13 was missing.
In July, Babcock gave O'Neal a receipt for the $1,200, but the receipt had an illegible signature and no date.
According to reports, Babcock and Heschel had demanded that Richard Farmer, general manager of Burns Iron & Metal, give them a receipt. Farmer explained that no such transaction took place Jan. 15. Farmer says he gave them a receipt just so they would leave. He purposely wrote copy on the signature line since it was not a valid receipt.
Babcock and Heschel told investigators they removed copper water lines and brass fittings from the old city Water Works building Jan. 13-14. They claimed they sold the copper and brass Jan. 15 with the intent to create a new slush fund for work-related purposes at the city cemetery office, where Heschel worked.
Through interviews with city employees, investigators determined that employees at the city garage had established a "widows and orphans fund" from the sale of scrap metal. The fund was typically used for "coffee and pop," but the union employees alone decided how and when to spend the money.
Babcock and Heschel knew about the fund and never told the employees there was anything wrong with it, according to reports.
Babcock said the fund has existed since he was hired by the city in 1972, right up until the present. Because it had existed for so long, he never tried to stop it.
Fred Bice, one of three service department supervisors, did not know about the fund.
Port Clinton police seized the fund, which contained more than $437 and receipts from Burns Iron & Metal. According to reports, there were no records to account for when or how much money was placed in the fund nor when or how much money was spent.
Upon Babcock's resignation, Brown appointed Dennis Fligor of Catawba Island to serve as interim safety-service director. Parks and Recreation Director Tracy Colston and Streets Superintendent Fred Bice will split the duties of the service department supervisor.
*4/24/2007 - Heschel handed City Auditor Nancy O'Neal $1,200 that he claimed was money for the sale of scrap metal. Heschel said he did not have a receipt, but would provide one later.
*4/24 to 6/26/2007 - Deputy Auditor Rachel Klimentov reminded Heschel that the city still needed a receipt for the $1,200.
*6/28 - Klimentov called Burns Iron & Metal Co., which typically handles the city's sale of scrap metal. She requested all scrap metal purchases from the city in April 2007. Later that day, a city employee informed Klimentov that Babcock allows them to use the sale of scrap metal to buy pop or water. They do not fill out purchase orders for it.
The same day a city administrator submitted a letter to City Law Director George Wilber, concerning "questionable" practices by the safety-service director.
*7/11 - Babcock turned in a receipt from Burns Iron & Metal for $1,200. The receipt had an illegible signature and no date.
*7/17 - O'Neal called Joyce Burns with Burns Iron & Metal. Burns had no knowledge of the receipt or amount contained on the receipt.
*7/18 - Mayor Tom Brown asked Babcock about rumors that he had took scrap metal, sold it and kept some of the money. Babcock said, "It's all lies, Mayor."
*8/7 - The city launched an internal investigation involving city employees.
*8/14 - Brown told council that Babcock and Heschel were placed on unpaid administrative leave.