Shenandoah Borough Council members voted last month to hire a special counsel to investigate alleged “financial improprieties” by its former Borough Manager and other borough officials.
Council members voted, 6-1, to hire Maria Casey, the former Schuylkill County Clerk of Courts, “regarding a bond matter, which will result in significant sums returned to the Borough.”
Katie Catizone cast the lone dissenting vote, saying she wanted proof that a borough’s insurance carrier said it should hire an attorney for this reason.
Since taking over in the role of Borough Manager at the beginning of this year, Mike Cadau has spent a considerable amount of time during public meetings this year pointing out what he perceives as these financial errors and mismanagement, namely by his predecessor, Tony Sajone. He says these errors have cost and continue to cost the borough tens of thousands of dollars.
The Council’s vote last month will also allow Casey to assist with an ongoing investigation into those alleged “financial improprieties” of Shenandoah’s business and personnel issues.
On Monday – at its June council meeting – board members are expected to vote on Casey’s fee schedule.
Lapsed Life Insurance Policy
In a conversation with The Canary several months ago, Cadau and Borough Council President Joe Boris discussed what they say is just one of the examples of financial mismanagement.
They say a life insurance policy for retired Borough employees lapsed due to non-payment. Since it could not be reinstated, Cadau says Sajone purchased a new policy that is intended for active employees and then listed those retired employees as active.
Cadau says this has caused costly issues if and when a retired Borough employee dies and Shenandoah must pay out a death benefit of $10,000. First, he says, the Borough is unsure who the beneficiary of that employee is on the lapsed policy. Secondly, the Borough must now pay out that benefit from its General Fund.
Several months ago, Council members OK’d a resolution to allow up to $180,000 be spent paying out death benefits to 18 former employees affected by the lapsed policy.
Further, Cadau says when the Borough renegotiated its union contract for its employees, the lapsed policy was never disclosed. Cadau says this means the negotiations were done in bad faith.
If all that can be proven by an attorney – which is why the Borough hired Casey – Cadau believes the bond could be “pulled back” and Shenandoah would be able to recover the money it’s paid out in death benefits from its General Fund that should have been paid by the insurance company, had that policy not lapsed.
More Alleged Financial Improprieties
During the council’s May meeting, Cadau prepared a “Transparency Report” – which was shared in print – highlighting many of the alleged other examples. Some of those include:
- Lack of an “appropriate budget”
- “Irresponsible” bill paying and being assessed late fees
- Incorrect payroll accounting
- Taxing medical benefits
- Incorrect and late tax reporting
- Misappropriation of Liquid Fuels money
- Police pension underfunded, Municipal pension overfunded
- Inaccurate sewer bills to some commercial customers
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