Politics & Government
Upper Gwynedd Commissioners to Fire Department on Nolan: Why Didn't You Audit?
A lieutenant with Upper Gwynedd Fire Company said the core members of the department are being 'bullied' by commissioners in the wake of the alleged embezzlement by former treasurer and fire marshal Kenneth Nolan.
In order to protect the assets of Upper Gwynedd Township in the wake of the alleged embezzlement by former Upper Gwynedd Fire Department treasurer and township fire marshal Ronald Kenneth Nolan, commissioners Monday night confirmed they want the township to take ownership of the trucks and firehouse and any other fire department assets.
However, Upper Gwynedd Fire Department Lt. Steve Hudson asked why the commissioners are bullying the fire company.
"Any time we tried to deal with anything with the township, Mr. Nolan was called and not the proper channels followed, as far as communication to the fire department," Hudson said. "At one point, we discovered the problem. You wrote us off. You said we need to split ways and treated us as such this entire time."
"I'm only here to ask, why are you trying to bully the fire department?" Hudson said. "In the last few weeks, you requested deeds to all the buildings, and you want to take over the trucks."
Commissioners told Hudson they are not; they want to protect the assets. They also criticized the department for not following proper procedure in the chief and president reporting an accounting problem, rather than through Nolan.
"You want to lease (the trucks) back to us. You want us to turn over full control of every asset. You don’t own the whole truck," Hudson said. "Again, you don’t know what we do, you don’t know who we are. Why are you trying to bully us up to this point, until this was actually made public?"
Hudson said Upper Gwynedd Fire Department has already come up with standard accounting practices that has not been neglected until their tenure as executive members of the fire department.
"We put this in place, we found the problem, we researched it, we fixed it," Hudson said.
Upper Gwynedd Township Commissioners Chairman Kenneth Kroberger said the department has not been bullied in the past and is not being bullied now.
"Years ago, in order to ensure the assets, we said we want a title given to the township for those vehicles, which was done," he said. "We’re here to protect the tax dollars put into the fire company."
Kroberger said nothing was brought to the attention of the board until Nolan's email admitting to embezzlement.
Township attorney Robert Kerns said he has met with an attorney representing the fire department to discuss the department's request of $200,000 from the township from the fire tax for renovations to the firehouse.
"We want to make sure, if fire tax money is used, there is adequate security, especially in light with what happened recently. We started discussions asking for the firehouse to be turned over to the township with a long-term lease to the fire company. That’s just protecting the assets of the township," Kerns said.
He said that since the fire department is a nonprofit, if it goes out of business, then those assets could go to other nonprofit companies and not the residents.
"Which is a waste and abuse of township money," he said. "We're trying to protect the residents and protect the fire tax money of the township."
Kerns said the fire department is, in essence, a vendor of the township.
"We want to make sure if we use those monies, they are adequately protected, and that would be the security of getting the buildings themselves turned over to the township with a long-term lease back to the fire company to provide service," he said.
One commissioner told Hudson if Upper Gwynedd Fire thought there was an embezzlement problem, why did the department not take it upon itself to conduct an audit, per its by-laws, rather than bringing it to the township.
"We pay (Upper Gwynedd Fire Department) a service fee to be the fire company with the township," said Commissioner Eugene Ziemba. "I don’t interfere with their everyday operations. If they suspected a problem of Mr. Nolan, it behooved them to have an immediate audit instead of passing it on."
Ziemba said it was the fire department's responsibility.
'Embarrassing to Everyone'
"(Nolan) betrayed the trust and respects that present and past members of this township gave him as our fire marshal for the past 20 some years," said Kroberger in a statement at the commissioners meeting Monday. "Mr. Nolan was a consultant for the township. He was paid a stipend of $1,500 a year for his service and duties as fire marshal. In that position, he did not have access to any township funds."Kroberger said Nolan was entrusted with the nonprofit volunteer fire company's funds garnered from such things as hoagie sales, beef and beer events, and hall rentals, for instance.
"We all, in addition to our fire tax, have contributed additional personal money to the fire company through many of their fundraising efforts. This was the money he stole," said Kroberger.
Kroberger said Upper Gwynedd Township contributes about $65,000 a year in fire taxes to the fire department to pay for fire coverage.
"Because these revenues were paid into their general fund, at this time, it is difficult to determine how much of which source of income was stolen," Kroberger said.
Kroberger said the township contributed money to the fire department for major capital purchases from the fire tax, including fire house improvements and purchase of fire trucks.
"In order to protect these assets, the township has held the titles to these vehicles. The ones we have titles to at this time amount to $1.7 million," he said.
Kroberger said the alleged embezzlement is "embarrassing to everyone."
"But most of all to present and past members of the fire company," he said. "As I said earlier, the closer you are to this, the more it hurts."
Kroberger said the fire company's financial position is good and it will continue to provide the high quality of service it is known for in Upper Gwynedd.
"The township will continue to work with the fire company in their efforts to provide fire service to the community. The fire company is an independent volunteer nonprofit organization that provides fire services to Upper Gwynedd Township and operates pursuant to its own constitution and by-laws," Kroberger said.
He said Upper Gwynedd has always greatly appreciated and respected all members of the fire company for their service to residents.
"We know they will not be distracted by the recent event," Kroberger said.
Resident Reaction
Resident Ruth Damsker told commissioners that all residents should be concerned of the lack of oversight of tax dollars by the board of commissioners in relation to the alleged fraud of fire department funds."Moneys from the fire protection tax as well as township contributions to the fire department funds have been misused," Damsker said. "The accused, Kenneth Nolan, was a longtime township employee as the township fire marshal, as well as serving as treasurer of the fire board."
Kroberger said Nolan was not an employee of the township, but a contractor.
Damsker wanted to know why commissioners reappointed Nolan to fire marshal in December 2012, after Commissioner Clare Edelmayer was informed last August by two officers of the fire company executive board of their concerns of missing funds.
"At that point in time," Kroberger said, "there was no allegation of fraud from anyone concerning his activities."
Edelmayer corrected Damsker: She was approached by only fire company President Joe Bifolco via a phone call.
"The question was Mr. Nolan's bookkeeping practices. That was the concern," she said. "It was not anything about fraud. There was no feeling about fraud."
Edelmayer said she brought the concern to the board of commissioners. Kroberger said the board instructed township Manager Len Perrone to contact Nolan and request financial records.
"The board instructed Mr. Perrone to call Mr. Nolan. Mr. Nolan called Mr. Bifolco, and said 'we can't have an audit now because the record keeping is not up to date," Kroberger said.
Damsker asked why Perrone did not insist on financial records for an audit, even when Nolan asked for a delay. She said Perrone was aware of suspected misuse of funds.
Damsker also wanted to know of safeguards for the future, so taxpayer dollars are protected.
"Because of (the) requirement (of state grant funds to fire companies having biannual audits), why can't the township, in conjunction with the fire department, conduct a similar audit of other fire department funds that include taxpayer dollars?" Damsker said. "Let's protect our volunteer firemen that protect this community and who provide an invaluable service to residents of Upper Gwynedd."
She said the current fire department board should be commended for putting in safeguards as soon as Nolan was replaced as treasurer and it became aware of the alleged fraud.
"Will the board do the same for the taxpayers of Upper Gwynedd?" she asked.
Kroberger told Damsker that he and Public Safety Committee Chairman Eugene Ziemba met with Bifolco on Jan. 3, 2013, where Bifolco indicated he would start an investigation because of Nolan's accounting practices.
"At that meeting," Kroberger said, "he said to me, 'I have no thoughts that Mr. Nolan was stealing.' Mr. Ziemba and I said they would continue the investigation. The township will do whatever we can to support you."
Kroberger said he had an additional meeting with Bifolco and deputy Chief Chris Sharkey to get copies of by-laws.
"(They) informed me of how the investigation was going and then, as stated, on Feb. 21, Mr. Nolan admitted to embezzlement," Kroberger said. "That was the first time anyone suspected anything dealing with fraud or stealing."
Hudson said that wasn't true.
"This was brought to your attention with the intent of saying, 'Hey, we’ve suspected something. You haven’t audited us. We’d like you to audit us,'" he said.
"No, it wasn't," said Edelmayer.
"OK, well agree to disagree," Hudson said.
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