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Public Corruption in Chester County, PA

I believe an unlikely mix of alleged drug trafficking related politicos and alleged white nationalist related politicos united to elect the infamous “Bloc of Four” in the abysmal voter turnout election of 2005. During their four year term the drug business was good again and white nationalists used Coatesville as an example on white supremacist websites like “Stormfront”. Strong community organization and support from law enforcement, in particular Chester County District Attorney Joseph W. Carroll has begun to turn our community around. The Chester County drug trafficking that I believe centers on Coatesville continues and I believe we still have public officials in place that profit from the drug sales. But the people here are amazing and continue to work against the odds to make Coatesville a good place to live.

Sunday, September 23, 2012


Guest Column by
Stacy Bjorhus, Former Finance Director at the City of Coatesville

During the summer of 2011 Gary Rawlings called a Department Head Staff Meeting.  He broached the topic of Bonus Pay for Department Heads and Managers.  His proposal:  Department Heads and Managers would receive Bonus Pay for ‘savings’ to the Department at Year End.  Ten percent (10%) of the savings realized would be paid to Department Heads and Managers based on ‘savings’ in the Department.  Each Department would operate as a Cost Center*, and the Bonus Pay would be an incentive to bring in ‘savings’ to the Department.
The concept of Cost Centers and Bonus Pay is not a foreign concept, but two elements were missing from Mr. Rawlings proposal:  absence of an acceptable ‘Base Period’ that would establish the period that current Year End balances were compared to, and the definition of the basis of comparison (Departmental Total, or Line Item Total) that would be used as the basis for entitled Bonus Pay.
If Mr. Rawlings plan was put into place the City would need to regress to a year that the City expenditures were lower than the City’s Annual Budget, presumably with a balanced budget.  Mr. Rawlings selected the 1/1/2011 Original Final Budget.  The Original 2011 FY General Fund (GF) Budget was amended in mid-year 2011 based on substantial omissions from the Original GF Budget that were required for the City to recognize pending expenditures.  A valid Base Period should have been in a year that the City successfully balanced its budget and its expenditures were within the budget range for the period.  A balanced budget is one in which the Revenues of the City were equal or greater than the expenditures of the City.  The City has not experienced a Balanced Budget, in the last twenty years to my knowledge.
I was terminated in October 2011. In July of 2011 I was the lone dissenter of the Bonus Plan.  The City did not have an accurate Base Period that could serve the City for the Bonus Plan suggested.  Mr. Rawlings announced to those present that the Finance Director did not agree with the Plan, so the Plan would be suspended.  The Staff in attendance hissed their disapproval.
In October, I was handed a notice that served as a Severance Notice.  That same day I had been expected to submit the Revenue and Expenditure Draft Budgets to the City Manager (Gary Rawlings) for submission to City Council, for the upcoming Budget Workshop.  I was called into the Manager’s Office and placed on Administrative Leave, with intention to Terminate.
The Preliminary Budget was presented to Council with the Manager’s Message and Discussion Items.  Embedded in the Preliminary Budget’s ancillary documents was Discussion Item #1, which was originally presented to Council in July 2011.  Discussion Item #1 made a proposal:
Empower Department Heads and Employees.
o Each department accountable/responsible for their own budget. Each
Department becomes its own "cost center".
o Department Head/Employees receive 10% of any savings registered below the 2011 General Fund Budget adopted 01.01.1 1

Mr. Rawlings Bonus Plan changed slightly, from July’s Staff Meeting to this version of the Bonus Plan.  The current version of the Bonus Plan paid Department Heads and Employees rather than Department Heads and Managers.  Noting the July 2011 date on Discussion #1’s heading would encourage the City’s outside auditors to accept the Bonus Pay to management and staff as an acceptable expenditure for both 2011 and 2012.  It is most likely that they would not question Bonus Pay paid out to City employees.
Mr. Rawlings proposal was loosely defined, and did not answer many of the questions of ‘how’ the Bonus Pay would be determined:  
  • Is 10% of the savings paid to each Department Head and Employee or is 10% shared by these parties.  
  • Is the savings registered by Departmental Total, or by Line Item?  If the Departmental Savings are determined by Line Item then it is possible that 10% of each under-budget Line Item is paid to Department Heads and Employees while the Departmental Total, as a whole, is over-budget, with a negative variance to the total.
The Preliminary Budget, where the Manager’s Message and the Bonus Plan was initially posted, is no longer available on the City’s web site.
The City’s Year to Date Monthly Financial Reports for January 2012 and February 2012 are posted on the City’s web site, but they are the only months posted.
The City’s General Ledger can only maintain three open periods.  Any other prior periods must be ‘closed’.  The City could not have December 2011 open in the month of March.  The City’s General Ledger must be closed for Year End 2011 prior to the time that March 2012 is open.  This means that the City would have Year End figures by the February 2012 financial period.  The December 2011 period would be closed and the City Managers would have been able to determine if ‘savings’ from 1/1/2011 Budget were realized by Year End 2011 prior to March 2012.
Is it an accident that neither the March 2012 Month to Date Financial Reports nor subsequent month's reports are not posted on the City’s Web Site?
Is it possible that Department Head and Employee Bonus Pay Proposal (Discussion Item #1) has been embedded in the Final 2012 GF Budget, and was approved by Council when they approved the 2012 GF Budget?  Was Bonus Pay paid out to City staff in March of 2012?  Is it possible that the General Ledger for the month of March 2012 discloses employees’ salaries with Bonus Pay included in the March Year to Date Monthly Financial Report?  Is the City hiding the City’s Department Head and Employee salaries in March 2012 and beyond because they do not match Budgeted Salaries due to them, per the 2012 Final Budget?
Consider the fact that the 2011 Final Budget is posted on the City’s web site in its entirety, but the 2012 Final Budget is posted with Revenues and Expenditures only, failing to post the Managers Message and ancillary documents.
Consider that the Year to Date Monthly Financial Reports for January and February are posted, but the ensuing months are not posted.  Why?
Was I, as the Finance Director, terminated in October 2011 due to the City Manager’s desire to move forward with his Bonus Plan?  Did the City Manager fear that I would highlight the Plan to Council and the general public?  Would Council Members remove the Bonus Plan from the Final Budget, negating the Manager’s ability to be rewarded with Bonus Pay, accordingly?
Assuming that the Plan was included in the Manager’s Message in the Final 2012 Budget:  Do Council Members know that they awarded Bonus Pay to the Department Heads and City Employees?
What was paid out? Did the City’s employees profit with Bonus Pay from the Year End General Fund Departmental expenditure balances while City Council ponders another withdrawal from the Trust?
Can the citizens of Coatesville count on the current Council and City Hall management and staff to perform the fiduciary responsibilities that are expected and required from them?
Why won’t the City post all of the financial documents on their web site? 
What are they hiding? 

*“Cost center” means an account used by a local government to track specific assets, liabilities, capital, expenses or income of the local government.

1 comment:

  1. Also see:
    Who Stole the Peoples Money?http://coatesvilledems.blogspot.com/2012/01/who-stole-peoples-money.html


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