Wozniak defends vote to give ex-aide break on city loan

1/9/2003

Tina Skeldon Wozniak voted last July as a Toledo City Council member to forgive most of a $57,000 business loan owed the city by her former campaign manager.

That ex-campaign manager, Gretchen DeBacker, is among the candidates who want to fill Ms. Wozniak's council seat now that the latter has become a Lucas County commissioner.

DeBacker Management Co. of 6600 West Sylvania Ave., of which Ms. DeBacker is a shareholder, was awarded a $57,000 economic development loan by the city in 1994 to open the Sufficient Grounds coffeehouse at 420 Madison Ave. in downtown Toledo. In 1999, the city sued in Lucas County Common Pleas Court to collect the unpaid balance of $57,000, plus more than $11,000 interest.

On Jan. 8, 2002, the DeBackers sold Sufficient Grounds for an undisclosed amount to B-3 of Ohio, L.L.C. It is now a Beaner's Gourmet Coffee business.

On July 20, council voted 9-1, with two members absent, to accept payment of $15,000 to settle the debt.

Ms. Wozniak said she didn't consider her vote in favor of forgiving the debt to be a conflict of interest.

“I did not have a personal gain of the settling of that loan with the city. She was my campaign manager in 1997, but not in the next one,” Ms. Wozniak said. She said she did not seek advice on whether to cast a vote.

Clerk of Council Michael Beazley said the city charter requires council members to vote on every ordinance unless an ordinance involves an employer or a family member.

“She would not have been allowed to abstain - not unless the legislation would benefit a family member or an employer. Under Ohio law, she has no obligation to abstain,” he said.

Council members cast over 1,000 formal votes each year, and rarely abstain, including on matters involving people who have contributed to their campaigns.

The ordinance to forgive the Sufficient Grounds loan was drafted by the city's law department.

City Law Director Barbara Herring did not return telephone calls yesterday to explain why the city agreed to settle the loan rather than pursue collection.

John Madigan, the general counsel who worked on the case, said he was not allowed to comment on the matter because it was a legal issue.

Betty Shultz, the one councilman who voted against the settlement, said she didn't think the deal returned enough money to the city.

City records show that city officials have tried for years to collect on the loan, but without success.

Ms. DeBacker is one of eight candidates who have expressed interest in screening for the 5th District seat next week with the Lucas County Democratic Party.

“Things turned sour at the downtown location. We were told some things by the past administration that we couldn't rely on, so we tried to address it with the present administration,” Ms. DeBacker said.

Regarding Ms. Wozniak, “I certainly wasn't an employee of hers, and she never had anything to do with it,” Ms. DeBacker said. “I never called her about it.”

Ms. DeBacker screened along with Ms. Wozniak for a vacancy on council in April, 1997.

Ms. Wozniak won the appointment, and Ms. DeBacker became her campaign manager that year for Ms. Wozniak's successful bid for council.

Ms. DeBacker said yesterday the former Finkbeiner administration promised that the loan would be forgiven because of the financial losses at the downtown location, but she declined to say who made the commitment.

A letter from Mayor Carty Finkbeiner to Ms. DeBacker in 1999 explaining why the city was pursuing collection of the loan states: “We regret that you feel that a former city employee made unauthorized promises that the city cannot honor. However, neither the former employee nor our files can verify or document such an agreement.”

Loan documents show that Ms. DeBacker held a 16.3 percent share of the corporation, with the other shares held by other members of her family. She has held several titles, including treasurer, vice president, and secretary.

In November, 2000, DeBacker Management and the city's Department of Development agreed on a $500-a-month repayment schedule.

But the city renewed its collection effort in February, 2002, after learning that the business had been sold without the city being notified, allegedly in violation of the original loan agreement.

Ms. DeBacker said that, including the $15,000 settlement and the $500 monthly payments, the partnership has repaid nearly $20,000 to the city.

Paula Ross, chairman of the county Democratic Party, defended Ms. Wozniak's vote, saying Ms. DeBacker had been a volunteer campaign manager five years previously.

“That does not rise to conflict of interest in my mind,” Ms. Ross said. She said campaigns have many volunteer workers.

As for Ms. DeBacker's inability to repay a city loan, Ms. Ross said her understanding was that the DeBackers had been assured by the Finkbeiner administration that the loan would be forgiven.