Sunday, March 12, 2000

Ludlow is case study in fund-fumbling




BY KAREN SAMPLES
The Cincinnati Enquirer

        LUDLOW — Ludlow's fire department is under investigation, the city's water bills are a year behind, its clerks have quit and its budget is a mess.

        The bright side: Apparently nobody has run off with bags of public money.

        Man, it would have been easy.

        Ludlow is like lots of other Kentucky towns in this way. They're too small for top-notch accounting staffs, so the people in charge handle city affairs as if they were juggling grocery bills at the kitchen table.

        This often works just fine.

        But if these clerks are dishonest, loose procedures make it easy for them to steal. Then there's that other bugaboo: retirement. God forbid anyone try to figure out the system after good ol' Betty is gone.

        Ludlow's longtime city clerks left in the mid-'90s, around the time computers arrived in the city office. The clerks were replaced by Richard Abney, who had little accounting experience. As elected officials bickered, Mr. Abney and others fell behind on basic record-keeping. Then they quit.

        The city recently hired Robin Garrison, an accountant from a temporary services agency, to fill in. At a city council meeting on Thursday, she described an office in disarray.

        Ms. Garrison has found undeposited checks stacked among unrelated documents. She has discovered accounts that don't balance and books that are missing entries.

        For months, the city has failed to send out water bills, resulting in a big debt. Any day now, residents will be getting a surprise in the mail: Bills based on a year's worth of meter readings.

        Despite the confusion, Ms. Garrison doesn't think any money is missing. She just needs time to sort through documents.

        Meanwhile, Ludlow officials are flying blind. They don't know where city money has been going, which makes it tough to write a budget.

        Toss personality conflicts and political agendas into the mix, and you have a conflagration waiting to happen.

        Mini-explosions have been going off for the last year.

        In early 1999, the fire department's charity bingo games came under scrutiny by state authorities. Around the same time, Mayor Tom Stacy put City Administrator Mike Moehlman on paid leave. The vague explanation: Mr. Moehlman had issued $18,000 to the fire department that wasn't in the budget.

        Auditors later found nothing wrong with the payment. Mr. Moehlman was never put back on the job, however, and last month, he sued the city for defamation.

        Then there's the police department. It was awarded federal grants to start programs in Ludlow schools. But City Council, with a weak grasp on the budget, hesitated to release the money. This caused an uproar, with cops reporting the situation to the U.S. Justice Department.

        The mayor is an ally of the police chief. City Council wants to dump the mayor. At meetings, citizens gripe, glower and take sides.

        At Thursday's meeting, resident David Colwell demanded to know whether all the grant money had finally made it to the police.

        Councilman Ron Wofford assured him all was OK. Then he followed up with one of those puzzling Ludlow-isms: “The money is somewhere in an account that we're not sure where it is. It never came through this council.”

        Personally, I know squat about bookkeeping. City councils and mayors shouldn't have to be experts, either. But they better make sure our tax money is in professional hands.

        Sometimes, that's a tall order for tiny governments.

        Consider Kenton County's Fairview, population 250. Last year, its longtime treasurer and her daughter were convicted of stealing $70,000 from the town. Council members simply assumed the women were honest.

        Politicians hate to hear it, but the long-term solution to such problems is fewer tiny governments.

        Towns like Ludlow are special. They offer a gentle pace, friendly atmosphere and great housing values. These qualities are worth preserving. The complications of governance often are not.

        Karen Samples is Kentucky columnist for The Enquirer. Her column appears Thursdays and Sundays. She can be reached at (606) 578-5584, or by e-mail at ksamples@enquirer.com.