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Dayton Sues Former Mayor, Alleges Misappropriation of Funds

Money belonging to the City of Dayton was inappropriately used to finance engineering work at a private business, a lawsuit filed last week claims.

The suit, filed against former Mayor Ken Rankle, claims that two checks were written in the amounts of $1,781.25 and $475 and paid to Cardinal Engineering for services provided to Buona Vita, a family-owned Italian restaurant in Dayton. The checks were signed by Rankle but the funds were not approved by city council.

The bank that the City of Dayton used at the time only required one signature, according to the lawsuit. Current City Administrator Michael Giffen told The River City News on Monday that the mayor, the city clerk, and the city attorney are authorized to sign checks. "A purchase order is signed by the city administrator and then the purchase order goes to the clerk where a check is generated," Giffen said.

Typically, expenses like those provided to Buona Vita as claimed in the lawsuit are voted on by city council. "City council will set the budget for the year and then each department will operate under that budget amount," Giffen explained, adding that funds can be moved around as necessary, with council approval.

Rankle could was not immediately available for comment but this story will updated when he can be reached. He spoke to the Bellevue-Dayton Sun on Sunday. "I am not sure why the checks were sent out to Cardinal without a second signature," Rankle said. "It is the clerk/treasurer’s responsibility to generate checks and secure 2 signatures and that person was and still is Donna Leger. We wanted to help Buona Vita expand their business and bring people into the city. Thriving businesses make thriving communities. I had no motivation or personal gain to help Buona Vita. I have never even gotten a free meal from them. They are one of a few businesses that have hung in there and done pretty well here.”

According to the lawsuit, the engineering work at Buona Vita was not budgeted for in the 2010-11 budget year when the checks were written. The suit alleges that in May, 2011, after the checks had been cashed, then-Mayor Rankle made his first references to the expenses. The suit describes Rankle's remarks as "cryptic" and said that he told council that there would be a bill of $1,775 for Planning & Zoning. The payments were later filed under "city engineering fees".

Rankle was defeated in his bid for a fourth four-year term last year. Mayor Virgil Boruske, who served on council when Rankle was mayor and when the checks were written, told The River City News that he learned of what the city has called "illegal payments" in January and turned the issue over to the city attorney. 

"It wasn't voted on. He never had council vote on that thing," Boruske said. With the payments becoming a legal issue more than four years after they were written, when asked, Boruske said that "somebody told me that it had happened". The budget from that year was then reviewed and the payments discovered to be illegal in the eyes of City Attorney Tom Edge.

"City money is supposed to be used for public purposes," Edge told The River City News. "That money was not used for a public purpose." Recently, the City of Dayton adopted a new economic development program that will use public money to assist private businesses in locating or growing in the city. That program did not exist in 2011 when the public funds were allegedly used illegally for a private restaurant. "The recent (economic development) program that Dayton does, that was all approved on the front end by council before any money is disbursed. There is a process. The council has always approved the expenditures well in advance."

The City first sent a letter to Rankle earlier in the summer asking for repayment. When he apparently opted not to comply with the request, the City sued. 

The suit seeks compensatory damages and court costs. "I'd just like to have some reimbursement," Boruske said.

Written by Michael Monks, editor & publisher

Photo: Ken Rankle