Munhall secures loan from construction firm to avoid layoffs
February 12, 2014 11:48 PM
Munhall borough council member Bernard Shields questions a member of the public during last night's workshop meeting dealing with loans and fiscal turmoil.
By Robert Zullo / Pittsburgh Post-Gazette
Munhall officials said Wednesday night that they had secured private financing that will avoid the layoffs of 10 police officers and six public works employees.
At an at-times volatile borough council meeting at the municipal building that featured a few shouting matches between residents and council members, interim borough manager Harry Faulk said the council will meet again today to consider accepting a $500,000 tax-anticipation loan from Joe and Frank Leonello, of Franjo Construction in Homestead, and Christian Stein of Arch Masonry Inc.
The money is expected by Feb. 20.
Joe Leonello is a longtime friend of Munhall police Chief Patrick Campbell, who said that of the four bids submitted to help the borough meet its obligations, the Leonellos' interest rate of 5.25 percent was the lowest.
When residents complained about the interest rate, Councilman Rick Brennan fired back.
"We didn't do our audits. We didn't do it properly. So we can't go to a bank," he said.
Munhall landed in a tight spot after losing out on $360,000 in regional asset district funds because the borough did not have annual audits for 2011 and 2012 performed by an independent auditor and filed with the state.
The unperformed audits, along with insufficient pension fund contributions and missing records, were discovered in the wake of the sudden resignation in June of former borough manager Matt Galla, who may have also paid himself more than his approved salary, borough officials said.
Mr. Galla claims he told council leaders he would not bring in auditors because of major problems he found with the borough's books. He says he resigned because he could not work under "unethical, immoral and illegal conditions."
The Allegheny County district attorney is investigating, a spokesman has said.
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