City of Covington Issues Statement Regarding Finance Director's Arrest
UPDATE: City Commissioner Steve Frank said at The River City News Facebook page that State Auditor Adam Edelen's involvement will be requested and that a call will also be made to federal investigators.
The City of Covington responded late Monday afternoon to the allegations that Finance Director Bob Due stole roughly $300,000 from the city treasury, a number that could be higher in a scheme that started earlier than originally known.
At a special meeting on Tuesday, one previously scheduled and one in which Due would have played a significant role since it involves the property tax rate for the next year, the city commission will vote to terminate Due's employment. The termination would retroactively begin last Friday.
Due, finance director since 1999, was arrested late Friday and suspended indefinitely without pay.
City Manager Larry Klein announced Monday that the city will implement immediate action to respond to Due's alleged misappropriation of funds.
The City will seek full recovery of any missing funds by retaining attorneys and other professionals who specialize in the collection of misappropriated funds. It will also make a claim under its insurance crime policy.
On Tuesday, a plan of action will be presented establishing a task force to review current procedures, checks and balances, recover all misappropriated funds, and recommend changes in the city's finance department operations, policies, and procedures to make sure that the City faces no future losses.
"We need to take a hard look at our procedures and we must implement new procedures to ensure that this does not happen again," Klein said in a statement. "To that end we will be establishing a Task Force of seasoned professionals with expertise in municipal finance and how to eliminate the potential for fraud to be committed on the public and to seek full recovery of all misappropriated funds."
"I cannot and will not tolerate the deception that has transpired. The public trust has been violated, and that is the highest crime that can be committed in government."
Klein met with City staff at 9 a.m. Monday to discuss the allegations against Due and according to the news release, employees expressed shock and dismay.
Mayor Sherry Carran also spoke to the staff and indicated that new procedures will be developed and implemented based on the recommendations of the task force. Carran urged the staff to continue doing its job and to continue to move the city forward.
She noted several positive projects in development and the commission-approved five-year community investment plan which aims to repair and replace much of the city's aging infrastructure.
"We have many positive projects going forward," the mayor said. "We will get through this, and we will be better for it."
Due appeared in Kenton County District Court on Monday morning and entered a plea of not guilty. His bond was reduced from $50,000 to $10,000 and he was released at 4:56 p.m. Monday according to Kenton County Jail records. He will be on electronic monitoring at his home in Independence and will require permission from the court to leave.
Due, who was a consistent voice at City Hall for fiscal conservatism and often drew attention to the city's dire financial situation in years past, faces twenty years in prison if convicted on all the charges that include theft and official misconduct.
Accounting Operations Manager Jerome Heist will be voted upon to replace Due as finance director on an interim basis.
The meeting is open to the public and begins at 6 p.m. on Tuesday at City Hall's Commission Chambers.
Items on the agenda in addition to those related to Due, Heist, and the Task Force:
- The city commission will consider taking the compensating rate on property taxes which would be $0.3045 per $100 valuation. The higher compensating rate is necessary, according to the commission agenda, to bring in the same amount of revenue as the previous year.
- A zoning change necessary for the conversation of the former Lincoln Grant School building into the Scholar House residential and educational facility. (SEE PREVIOUSLY: Photos: Inside the Deteriorating Lincoln Grant School Building)
- The city commission will consider the bid of Cincinnati-based Ray Hamilton Company for the purchase of new furniture and for moving/relocating City Hall to its new location at the former JC Penney (or more recently, Pike Place Bingo) building, in an amount not to exceed $90,900 payable from the capital improvements fund.
Written by Michael Monks, editor & publisher of The River City News
Photo: Covington City Hall/RCN file