Shenandoah Borough officials say an ongoing review of municipal finances has identified more than $242,000 in additional obligations involving the borough’s Liquid Fuels Fund and the former Municipal Authority of the Borough of Shenandoah.
According to a press release issued by the borough, the newly identified obligations total $242,803.94. That amount includes money the Pennsylvania Department of Transportation determined must be restored to the Liquid Fuels Fund and an unemployment compensation balance connected to the former water authority, commonly known as MABS.
Financial Obligations Identified by Shenandoah Borough
| Obligation | Amount |
|---|---|
| Liquid Fuels Fund restoration | $203,030.96 |
| Former MABS unemployment compensation account | $39,772.98 |
| Total identified obligations | $242,803.94 |
The borough said the findings are part of a wider review that has identified more than $3.5 million in public funds, liabilities, obligations and potential financial exposure requiring corrective action or further examination over approximately the past year.
PennDOT Review Identifies Liquid Fuels Issues
PennDOT’s monitoring review covered the period from January 1 through December 31, 2024.
According to the borough’s release, PennDOT determined that $100,000 transferred from the Liquid Fuels Fund to reimburse the General Fund for prior-year expenses must be restored. The agency also found that $103,030.96 used to pay an electric bill covering multiple years must be reimbursed to the fund.
PennDOT advised the borough that future Liquid Fuels allocations are contingent upon the $203,030.96 being properly restored, the release stated.
The review also examined the borough’s $124,943.16 Liquid Fuels allocation for 2024. According to the release, the money was expected to be received and deposited during the first week of March 2024 but was not deposited until July 7, 2024. PennDOT reportedly attributed the delay to municipal documentation not being filed on time.
PennDOT also noted that the borough treasurer’s $100,000 bond was lower than the annual allocation.
Related coverage: Auditor General report identifies issues with Shenandoah Liquid Fuels Fund spending.
Former MABS Account Shows Nearly $40,000 Due
The second obligation involves the former MABS water operation.
The borough said a statement from the Pennsylvania Department of Labor & Industry’s Office of UC Tax Services lists $39,772.98 as due.
| Account Charge | Amount |
|---|---|
| Unemployment benefit charges | $32,555.82 |
| Interest | $7,123.62 |
| Penalties | $0.54 |
| Fees | $93.00 |
| Total due | $39,772.98 |
The account history cited by the borough includes benefit charges and accumulating interest from the third quarter of 2023 through the second quarter of 2025.
Borough Manager Mike Cadau said the administration must determine how to pay the obligations, how they developed and why they remained unresolved.
“These transactions and liabilities originated before I became Borough Manager in January 2025, but they are now our responsibility to address,” Cadau said. “We cannot simply continue paying historical liabilities without determining what happened.”
Broader Review of MABS Sale Underway
The borough has also begun a broader audit and financial review of the July 23, 2023, sale of the MABS water system and the authority’s subsequent wind-down.
Officials said the review includes questions involving pensions, taxes, unemployment compensation, employee benefits, outstanding liabilities, security deposits, the distribution of sale proceeds and other financial matters.
The borough is seeking records and professional work papers from individuals and entities involved in the transaction as it attempts to reconstruct what occurred before, during and after the sale.
Cadau said the unemployment compensation account illustrates why the broader review is necessary, particularly because the amount due includes more than $7,100 in accumulated interest.
The borough’s release identified former Borough Manager Anthony “Tony” Sajone and former Council President Katie Catizone as holding those positions during periods associated with the 2024 Liquid Fuels transactions and the MABS sale and wind-down.
However, borough officials emphasized that holding an office does not by itself establish personal or legal responsibility. The release did not include comments from Sajone or Catizone.
The borough also stated that identifying a discrepancy, financial question or potential exposure does not establish wrongdoing by any former official, employee, attorney, accountant, financial adviser, consultant or other professional.
Council President Calls for Answers
Council President Joseph R. Boris said council supports the continuing review and wants the borough to determine how the obligations developed and whether any money can be recovered.
“It is not enough for us to find a problem, write another check, and move on,” Boris said. “We need to understand why it happened.”
Boris said the borough could consider insurance, bonds, professional claims, litigation or other lawful avenues if documented facts support recovery.
He also said any matters warranting examination by state or federal agencies or law enforcement would be referred to the appropriate authorities based on evidence and professional advice.
Financial Review Will Continue
The broader review includes matters involving pensions, the former water authority, the Sewer Authority, taxes, unemployment compensation, Liquid Fuels funding, grants, insurance and bond issues, employee benefits and other historical transactions, according to the borough.
Officials said Shenandoah will continue working with PennDOT, the Pennsylvania Department of Labor & Industry, special counsel, a forensic accountant and other agencies as the review continues.
The borough said additional information will be released as more facts are documented.
Source: Shenandoah Borough press release. The financial review remains ongoing, and the identification of discrepancies or potential exposure does not establish wrongdoing.