Mayor says Munhall did not 'crash'

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Just before what promised to be another contentious Munhall Borough Council meeting Wednesday night, Mayor Raymond Bodnar stood to address a packed room, with some residents spilling out into the hallway outside the council chambers.

"Contrary to some of the news put out by some of the media ... Munhall did not crash and go to hell," Mr. Bodnar said. "Munhall is and will be in good shape as soon as we get over a bump or two that was caused unneccessarily by some, well I don't want to use the words ... some slimy snakes. ...They're responsible for causing some of the financial problems."

Mr. Bodnar, who also told the crowd to "keep smiling," was addressing what has been a rocky past several months for the borough, which was forced to seek out private financing to avoid layoffs because of a budget crisis borough officials have said came in the wake of the departure last summer of former borough manager Matt Galla.

Because of uncompleted audits, Munhall failed to secure $360,000 in Regional Asset District money and faced an additional $168,000 shortfall as a result of a failure to deduct police pension contributions from the borough's officers over several years. As of Jan. 15, Munhall had just $15,000 in its checking account, Council President Dan Lloyd told residents Wednesday night, adding that the borough's monthly payroll and bills are about $290,000. Mr. Galla has said the audits never happened because he refused to sign off on what he considered illegitimate books and that council members were aware of his actions and the financial problems.

Last week, state Auditor General Eugene DePasquale said his office would resume audits of Munhall's two pension funds: one for police and the other for "non-uniformed" workers such as public works employees.

The lack of audits also meant the borough could not get a traditional "tax anticipation note" from a bank and had to seek other financing.

However, Mr. Lloyd said Munhall would be current on all its pension obligations within the next several months. And though the borough council voted unanimously, with Mr. Lloyd abstaining because of past business dealings, to accept a bid for a $500,000 loan from Joe and Frank Leonello, of Franjo Construction in Homestead, and Christian Stein of Arch Masonry Inc., the borough may not need to take it.

The interest rate on the loan is 5.25 percent, the lowest of the four bids the borough received, and comes with an additional "origination fee" of $12,500. It cannot be paid back earlier than three months, meaning the loan would cost taxpayers a minimum of nearly $19,000.

In a move to get money into the borough's coffers quickly, officials have implored residents to pay tax bills early and hundreds have responded, meaning an influx of nearly $580,600 in real estate tax payments, interim borough manager Harry Faulk said.

"The public came running with their checks and their money, their real estate tax money, as soon as we asked," Mr. Bodnar said.

Still, there was still a tough road to plow to win back the favor of many residents who showed up Wednesday. They took the council members and borough administration to task over a closed-door council finance committee meeting last week to receive the loan bids, the borough's pension plans, code enforcement, garbage bills, the number of borough employees on disability and the council's plan to merge the borough's four full-time and six part-time emergency dispatchers with Allegheny County's system by April 1. Council members said the borough might not be able to meet the deadline for the transition, which is projected to save money over the long term but comes with an upfront cost of about $170,000 for new equipment for the police and fire departments, including radios and pagers.

Peggy Vakerak, a resident who has said bullets have blasted into her house, pledged to "come back from beyond" if the new system endangered herself or her family.

Donna Dreshman, another resident, urged the council to dock themselves their own salaries for the year to cover the costs associated with the loan.

"The taxpayers had nothing to do with what happened," she said, drawing a round of applause.

And the council even faced a stern lecture from one of its newest members. Rick Brennan, who heads the finance committee. Mr. Brennan completely disagreed with borough solicitor Greg Evashavik, who opined that the council did not violate the state's Sunshine Law by closing off the meeting last week to receive the loan bids.

"I think it was an obvious Sunshine Law violation," Mr. Brennan said. "I challenge each and every one of you to get a book and start reading what you're allowed to do and what you're not allowed to do. ... We should be ashamed of ourselves."

Mr. Brennan, elected last year, pledged that it would never happen again.

"I was embarrassed to be part of that situation," he said. "The days of a meeting that the public is not invited to are over."

Mr. Lloyd said he expects to end 2014 with a surplus, not another financial mess, and wanted the candid dialogue between with the residents to instill confidence in the council and the new borough staff.

"I hope people left with a sense tonight that we're on top of it now," he said.

Leaving the meeting, Ms. Dreshman wouldn't say whether the meeting convinced her the borough government was on the right track.

"I will say I hope so," she said.

Robert Zullo: or 412-263-3909. Twitter @rczullo.

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