Schuylkill County will join the Shenandoah Valley School District in suing Shenandoah borough for its failure to make payments in lieu of taxes for a pilot program.

Commissioners Gary Hess and George Halcovage Jr. took the action Wednesday. Commissioners’ Chairman Barron “Boots” Hetherington did not attend the meeting.

“The county and the district have an obligation to its taxpayers to collect all amounts due and owing. Therefore, the county will join with the district and proceed with the filing of a civil lawsuit against the borough and seeking the past due amounts, along with interest from the date when each annual payment was due, along with court costs and attorney’s fees,” county solicitor Christopher Hobbs said.

At issue is the contention the borough has neglected to pay the county $39,582.72 for 2000 to 2015 for funds collected from the Schuylkill County Housing Authority as part of a federal housing and urban development program whereby it was “obliged” to make pro rata payments to the district and the county, Hobbs said.

Working together, the district and the county found a 1967 agreement saying the borough was to remit the funds. The borough ceased making payments to the district and the county in 2000, Hobbs said.

He said the county found the district received a payment of $46,732.83 from the former borough manager of Shenandoah, Joe Palubinsky. The district learned the money was for 2016 to 2019 for the payments for the pilot program.

“On March 6, 2020, after discussions with representatives of both the district, the borough and the county, a payment of $12,725.54 was paid to the county by the borough consisting of years 2016, 2017, 2018 and 2019,” Hobbs said.

He said the county met with district officials and the borough solicitor to reach an agreement. The borough attempted to settle the debt, he said. The county deferred to the district in an attempt to reach a resolution, Hobbs said. The district demanded payment in full with interest for 2000 to 2015, Hobbs said, adding the borough offered to pay a “minimal” amount.

District responds

The district issued a statement Jan. 27 requesting the county join the district in suing the district for money owed from 2000 to 2015.

District solicitor Robert Matta said Palubinsky contacted the business manager previously. Matta said the business manager was unaware of what the funds were for until told. Matta said he requested documentation from the SCHA, which provided copies of checks from 1998 to 2019 payable to the borough and the agreement. He said the borough is owed $134,487.63. The district offered to permit the borough to pay over a three-year period without interest.

“We felt that was reasonable,” Matta said.

He said a lawsuit will likely be filed within 30 days.

Solicitor answers

James Amato, borough solicitor, said the lack of payment was an “oversight.”

“The money was simply put into the general fund of the town and used to fund general expenses,” he said.

He said there is “no evidence of any nefarious conduct.” He said the borough was audited yearly.

Amato said the borough isn’t the only one responsible.

“They also had an oversight when they did not receive the money,” he said of the district and the county.

Neither attempted to pursue the borough, Amato said.

“We did make a good-faith effort in June 2020,” he said, declining to elaborate on an amount proposed.

He said the offer was “fair.”

“The school district refused to negotiate at all,” Amato said.

Resolving the matter without litigation would be beneficial to all parties.

“We’re not saying we should be absolved of any fault. I feel that we have strong legal positions to defend against the suit,” he said.