I don't believe it. Not for a second. Quakertown Borough Council claims that it made what amounted to an honest mistake, which resulted in residents of central and upper Bucks County overpaying the borough by as much as $2 million on their sewer bills over seven years. If the mistake was honest, the actions of council, and the Bucks County Water and Sewer Authority, since 2002 certainly have not seemed so.
Council dismisses the whole matter as a simple business disagreement with BCWSA. A difference of opinion as to the interpretation of a paragraph. It happens all the time in the commercial world. What's all the fuss about?
The answer is the appearance of honesty. If everyone involved had made things public in 2002, when a BCWSA audit caught the overbillings, this might all be a non-issue. But it is hard to believe that there was no deliberate scheme when looking at everything they did for two years to hide the improper records and the size of the BCWSA claim - two years of secret discussions, inaccurate minutes of meetings, incomplete financial statements.
It appears everything was designed to keep this a secret from the people. And, even worse, keep it a secret from those who buy and sell Quakertown's municipal bonds. People who rely on the borough for honesty and a proper statement of finances. Keep in mind that people like Martha Stewart and Richard Nixon were not brought down by illegal acts, but by their cover-ups.
Since 2002, council, and BCWSA, have known that the borough would have to repay close to $1 million or more, according to Authority sources. And, in fact, there was a note in the borough's 2002 Financial Statement which says "BCWSA has alleged that, during the years 1994-2000, the Borough overcharged the Authority the common operating costs of the shared sewage treatment facility".
The note also stated, "The financial impact to the Borough, if any, cannot be determined as of the date of the financial statements" (December 31, 2002). This was not true. According to officials, the borough had made offers, which represented the MINIMUM it would give back. Council members knew. BCWSA knew. Only the public - the ones who would be impacted - did not. The appearance of honesty, council members.
Furthermore, the closed sessions of council and BCWSA have violated the state Sunshine Law. The purpose of this legislation is to prevent exactly what they did - hide possible wrongdoing from the public. Their own records - the minutes of their official meetings - show that Quakertown has discussed "possible litigation" a MINIMUM of six or seven times in the last two years. Once they gave no reason at all for the session. But when governments meet in secret, they must tell the public EXACTLY WHY. It is not enough to state "possible litigation".
Pennsylvania law is clear: "In order to effectuate the purpose of the Sunshine Act requirement that reasons for the public's exclusion from executive session be given - so that the public can determine if it is properly being excluded - the reasons stated by the public agency must be specific, identifying a real, discrete matter that is best addressed in private."
Pennsylvania Commonwealth Court went even further in 1993:
"The reason given, of course, must be meaningful. It must be more than some generalized term which in reality tells the public nothing. To simply say 'personnel matters' or 'litigation' tells nothing. The reason stated must be of sufficient specificity to inform those present that there is, in reality, a specific, discrete matter or area which the board had determined should be discussed in executive (or closed) session...".
Actually, council met secretly many more than six or seven times, but hid those additional meetings by wrongfully exploiting a loophole in the law. It held executive sessions after so-called "work sessions". These work sessions are non-voting meetings, so no records are kept. The closed sessions afterward were not stated anywhere for the public to see. The law requires council to disclose the sessions at the next public meeting, but there has been nothing. The appearance of honesty, council members.
BCWSA also did not reveal the problem in its public meetings or minutes. When it discovered the overbillings, it was faced with a choice. It could have announced the whole issue, and risked litigation with its only local waste processor. The cost of the fight would have fallen on the same people who had already been victimized once. Or it could try to negotiate with Qtown, try to recapture as much of the money as possible, and make sure that billings were proper going forward. It opted for secret negotiations. The appearance of honesty, authority members.
Council's many improprieties may have done irreparable harm to the borough's ability to raise needed money for future improvements. Like many towns, Quakertown pays for large projects, such as water and sewer work, new electrical lines, and even the new swimming pool, by seeking loans and issuing municipal bonds. They did so back in 2001, and are in the process of issuing more.
Because Quakertown does not have it's own good credit, it buys municipal bond insurance from a major player in the field, MBIA. With MBIA insurance, Qtown bonds are rated AAA, regarded as excellent investments. But after news of this debacle, both investors and insurers may have second, and third, thoughts about adding the borough to their portfolios. Certainly the enormous payment to BCWSA will drain the ol' bank account, and make the borough a greater risk.
Currently the settlement talks are at $800,000, which will come from the borough's $1.3 million sewer reserve fund, according to vice president James Roberts.
What could this mean to you, local resident? Two words - HIGHER TAXES. On top of this year's 60% water and sewer increases. On top of the costs of repaying BCWSA. If you think seven years of savings was a good thing, watch what may be happening. This is a mess that could haunt residents for a long time to come. Honesty.