MAHONING VALLEY Investment company pays funds back to MVSD

The company says it was cheaper to pay the money than to fight the finding.
By SHERRI L. SHAULIS
VINDICATOR TRUMBULL STAFF
MINERAL RIDGE -- Without admitting any fault, an investment company has paid back money the state says it owes the Mahoning Valley Sanitary District.
McDonald Investments Inc., based in Cleveland, sent a $65,000 payment to the MVSD last month.
A 1997 special state audit of the water district determined the company owed the money after it hired an outside consultant to perform work and then billed the fee to the MVSD.
As part of its capital improvement project, then-directors Edward Flask and Frank DeJute hired the Gilbane Building Co. of Providence, R.I., as the construction contractor.
McDonald Investments was hired by the MVSD to sell bonds to raise money for construction. The investment company in turn hired Atty. Michael Morley, former Mahoning County Democratic Party chairman, to help oversee some of the work at a cost of $65,000.
The audit determined McDonald Investments improperly billed that amount to the MVSD, and issued a finding for recovery.
Letter
In a letter dated Nov. 6 that accompanied a check to the MVSD, officials from McDonald Investments say they do not admit any of the allegations, nor do they agree there was any basis for the finding.
"However, the costs of contesting this matter for the taxpayers of the State and for McDonald may well exceed the amount in controversy," the letter reads.
Bob Beasley, a spokesman for Ohio Attorney General Jim Petro's office in Columbus, confirmed the payment had been made, and that it removed McDonald Investments and Morley from the department's list of unresolved findings for recovery.
When Petro was state auditor, he issued the special report that called for $2.6 million in findings for recovery stemming from an investigation into the MVSD.
About $2.4 million of the findings was against Gilbane, DeJute and Flask. None of that money has been recovered by the MVSD.
MVSD provides water from the Meander Reservoir to about 300,000 customers in Mahoning and Trumbull counties.
slshaulis@vindy.com