Pay early, Munhall asks its taxpayers

Cash-strapped borough struggles

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There won't be layoffs of police and public works employees in Munhall at this point as was feared late last week.

But if council is not able to obtain a tax anticipation loan those layoffs could still occur, council President Dan Lloyd said in an email Sunday.

In the meantime, tax bills are expected to go out today -- two months earlier than usual -- in order to get much needed revenue into borough coffers.

"We are asking our residents to pay early so as to try to avoid layoffs," Mr. Lloyd wrote.

Each year at this time, Munhall, like other municipalities, takes out a tax anticipation note to cover payroll and other bills until tax revenue comes in later in the spring. But this year, about a dozen banks turned Munhall down on the note because the borough does not have completed audits for 2011 and 2012, according to Mr. Lloyd and Mayor Ray Bodnar.

Without the loan, of between $500,000 and $700,000, the borough would not be able to make payroll by the end of the month, and council was prepared at a special meeting on Friday to announce the layoffs of 10 police officers and six public works employees. The layoffs would have left nine officers on the job.

Residents had packed the special Jan. 31 meeting to express concerns about the police force being cut in half.

But just before the meeting, borough officials received an inquiry from a financing source about providing a tax anticipation loan. So council tabled the motion to enact the layoffs.

The mayor said he believes layoffs will be completely unnecessary. But Mr. Lloyd said the borough has not been officially offered a tax anticipation loan nor has it accepted an offer of one. It is advertising for offers until Feb. 10, with deposits made by Feb. 20.

If those deadlines aren't met, Mr. Lloyd said, layoffs may be necessary and would likely last between six and eight weeks.

In addition to the difficulty presented in getting a tax anticipation loan, the missing 2011 and 2102 audits cost the borough about $360,000 in Regional Asset District funds, Mr. Bodnar said.

The missing audits were discovered after former borough manager Matt Galla resigned abruptly in June. He had served as borough manager since December 2010. The mayor said it was also discovered that some payments to retirement funds were not made.

Mr. Lloyd said council has increased its audit budget from $20,000 to $50,000 so that audits can be done for 2011, 2012 and 2013 and that the borough is negotiating with the firm Hosack and Specht to perform the audits.

The borough is on its second interim manager since Mr. Galla resigned and officials are "trying to rebuild financial records, reconcile accounts, fill in gaps of missing and incomplete records," Mr. Lloyd wrote.

The mayor said there is an investigation going on into the borough finances and lack of audits. But he declined to say what agency is investigating.

Mike Manko, a spokesman for District Attorney Stephen A. Zappala Jr. of Allegheny County, said the DA's office is "looking over some material that was presented to us" from Munhall, but that it was premature to say the office has opened an investigation.

On Saturday, Mr. Galla released a statement via email in which he said was "not willing to sign my name to a set of inaccurate books and records for the [2011 and 2102] audits," though he did not provide details about the inaccuracies. In the email, Mr. Galla said he is willing to meet with the district attorney and other authorities.

Mary Niederberger: or 412-263-1590.

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