The review, which began in January 2025, is examining the borough’s finances, infrastructure obligations and historical records. Officials attributed the obligations to prior administrations while emphasizing that the borough remains financially stable and continues to invest in municipal services and infrastructure.
According to the borough, the obligations and potential liabilities identified so far include:
- A $1,223,719.83 Sewer Authority bridge loan connected to a wastewater treatment plant that was never completed.
- Approximately $895,000 in police pension underfunding, with current estimates approaching $1 million.
- More than $100,000 in outstanding obligations associated with the 2023 sale of the Municipal Authority of the Borough of Shenandoah, known as MABS.
- $163,522 in questioned federal COVID-19 expenditures identified during a previous forensic review.
- Approximately $200,000 that must be restored to the borough’s Liquid Fuels account following a state audit.
- Approximately $240,000 in anticipated life insurance obligations related to the cancellation of a group policy in 2020.
- More than $200,000 in payroll taxes and related employment costs associated with historical payroll practices that remain under review.
- Potential exposure of $498,000 related to previous Community Development Block Grant projects. That matter remains under review by the Pennsylvania Department of Community and Economic Development.
Officials said additional engineering invoices, contractor payments, utility bills, insurance obligations, tax liabilities and other financial commitments continue to be evaluated. Information uncovered during the review is also being shared with agencies conducting criminal investigations, according to the borough. The release did not provide further details about those investigations.
Borough Manager Mike Cadau said the current administration did not create the obligations but is responsible for addressing their financial effects.
“These financial obligations were not created by the current administration,” Cadau said. “They are the result of years of unresolved financial issues that now require corrective action. While correcting the financial consequences of past decisions is costly, failing to address them would only increase the burden on future generations.”
Cadau said it was unfortunate that money from the MABS sale, which was intended to support Shenandoah’s future, is instead being used to address inherited debt and other historical obligations.
He said the administration intends to limit the amount taken from those proceeds, recover public money when legally possible and preserve funding for roads, infrastructure, public safety, parks and recreation.
The borough is pursuing grant funding, strengthening its financial controls and evaluating possible legal remedies. Officials are also working with attorneys, accountants and insurance representatives to determine whether money may be recovered through the borough’s fidelity bond or directors and officers liability insurance.
Council President Joe Boris said council supports the administration’s financial recovery work.
“Although these inherited financial obligations are significant, the Borough remains financially stable, and we are committed to protecting taxpayer dollars, improving infrastructure, and ensuring that future generations inherit a stronger and more financially secure community,” Boris said.
Shenandoah has already used some proceeds from the MABS sale for Operation Paving, construction of a new borough garage, improvements to public safety facilities, parks and recreation projects, and other capital improvements.
Officials said preserving the remaining proceeds for community investments remains a priority. The borough plans to release additional information as its financial reviews are completed.
Residents seeking more information about the recovery efforts may contact Shenandoah Borough Hall to schedule a meeting.