More details on the Borough's use of public resources

A reader posted a comment on a recent post here and asked several questions.
In providing the answers to the reader's questions, I thought that the information in the answers should be made available in a more general way. So, I am posting the answer as a new post, rather than as a comment embedded in an older post.

JB, I will try to answer each of your questions in the order that you asked them.

First, the "other places" are all private entities, and there are at least four (4) of them. Three of these private entities are located completely outside our Borough's municipal boundaries, and one private corporation is located within the Borough boundaries. Yes, Campmeeting is one of them. THe others are Conewago Hill, the Mount Gretna Heights (which is the Campmeeting "heights"--not the Chautauqua "heights"), the Pennsylvania Chautauqua.

Second, the "sharing" relationships may or may not be "under a contract." The Borough currently has four snow-plowing/removal contracts with outside entities--three are with private parties, one is with a public party. However, regardless of the existence of these contracts, state law (Borough Code, Section 1703) clearly prohibits the Borough taking or assuming "any interest" in a road that is an undedicated road--i.e. those private roads belonging to homeowners associations. So, even with the contract with the public entity--S. Londonderry, if the roads being plowed are not dedicated, this is still a problem for the MG Borough.

Cornwall Borough recently had to deal with this very same issue--a homeowners association or development asked them to plow the development's road(s), and their solicitor correctly advised them that the law prohibited the municipality from using public resources to do this work for this private entity. (See their Jan 2010 Meeting Minutes, available at their website)

Further, the salt and anti-skid materials used in these contracts are typically paid for with State funds (Liquid Fuels funds), so the Borough must use those materials on their own roads--the roads that triggered the State to share Liquid Fuels monies with the Borough. So, unless the Borough used its own, NON-Liquid Fuels funds to purchase the materials used for these contracts, here we would have another violation of state law.

Further, if you try to get details on that "sharing relationship" between the Chautauqua (a private corporation) and the Borough (a public entity), the Borough only provides a copy of 1988 Council meeting minutes where they voted to start billing the Pennsylvania Chautauqua "on a monthly basis for payroll." Note the word "payroll"--that is an important word, so I will comment more on that below. The PA Chautauqua, being on the other end of the "agreement", simply refuses to provide the information, wrongfully claiming that they are a private company and that, as such, the Open Records Act does not apply. I say "wrongfully" for two reasons: First, in their own tax filings to the IRS, they repeatedly report that such "working documents" are made available to the public upon request. And, second, the Open Records law clearly applies to private entities that are performing or delivering something to a public entity. At a minimum, when either entity is asked for details on that relationship, the Borough will be "deemed" to have access to the information even if it is being kept by the Chautauqua, and must "retrieve" and provide the information.

The other problem with the "sharing relationship" between the Chautauqua (a private corporation) and the MG Borough (a public entity)is that the transaction does not seem to be accurately--or maybe not honestly, reported. For example, The Borough reports that it "shares" Linda Bell with the Chautauqua, meaning that a large percentage of her work and pay is allocated to the Chautauqua. Linda Bell is also the Chautauqua's Financial Secretary. Further, in working their General Fund numbers--numbers not neccessarily reported to the IRS, the Chautauqua numbers detailing its "transfer" to the Borough are broken down into things like salaries, health insurance benefits, State Pension Fund monies, etc.

However, when reporting to the IRS, the Chautauqua indicates that:
1. It has no labor costs.
2. It does not pay any of its officers or it volunteers; and
3. Its transfer to the Borough (reported as intergovernmental transfer) is a fraction of the "labor-costs" that it actually pays to the Borough. For example, the Chautauqua's General Fund breakdown could indicate that it transfers 100k to the Borough in one year, but their IRS Tax Form 990 would report only a 30K transfer to the Borough.

Now, let me wrap this all up by reminding everyone that any type of sharing relationship is supposed to benefit the taxpayer in terms of provision of services that protect the health, safety, and welfare of the public.

And, just because the Chautauqua says that it serves as a "billings and collection conduit" to promote efficiencies and to reduce the cost to the taxpayer, that statement may not really be true. For example, in reality, we have a water/sewer authority that sends us water bills, and the same person that sends us those water bills is the same person that sends us our shareholder assessment bills (which contain our sewer bills). It is not reasonable to think that this parsing out of the sewer bill is an efficiency when there are only 200 or so bills to be sent and when it would take much less time and effort to simply include the sewer charges in with the water bill and send the payment back to the same Authority address in the same envelope.

So, is it really an "efficiency" then to involve a third party--a private entity, to collect sewer fees here, or is it just a way to avoid transparency and the sharing of information with the same public that you are collecting monies from?