During the Oct. 20 Catasauqua Borough Council meeting, council President Howard Cunningham reported the borough needs to repay nearly $700,000 in American Rescue Plan Act funds distributed during the COVID-19 pandemic.

Cunningham alleged members of the previous council and administration misused the funds and did not follow through on reporting obligations. It was reported there is no official record of how the funds were used, but Cunningham said he and other borough officials were told the money was used for payroll. This is not one of the approved uses of the relief funds.

There are members of that previous council who still serve on this council — Brian Bartholomew and Eugene Schlegel. Mayor Barbara Schlegel also held the position during that time.

Reached after the meeting, Vince Smith, who was borough council president during the American Rescue Plan funding, denied the allegations that he and his colleagues misused any money.

Smith said it is important to understand the role of council members and the subsequent responsibilities of a borough manager. Council members do not allocate funding, he said, adding the allocation is the job of a borough manager.

According to borough code, he said, council is tasked only with making decisions on what needs to be paid. That information is relayed to a borough manager, who, along with the solicitor, research payment options and any relevant funding rules.

Smith said blaming council members for misuse of funding is misguided. If American Rescue Plan Act funding was misused, Smith said, that error falls on a borough manager, who is in charge of all day-to-day operations.

“Borough council only does so much,” Smith said. “The borough code says that.”

Cunningham said the borough has until Dec. 15 to repay the $694,000.

Borough Manager Glenn Eckhart said he and Treasurer Deanna Decker have been working to save funds in the borough so they will not have to raise taxes to repay the funds. Eckhart noted this will affect the timeline of when he expected them to be able to lower taxes, but it will not result in a tax hike.

Barbara Schlegel asked if there could be action brought against those involved in the misuse of funds and failure to report. She noted the previous manager is deceased but also mentioned the treasurer at the time. Bartholomew noted he has been calling for action for a while. No action was taken at this time.

Cunningham also noted there were questions about how involved the previous council was in paying attention to how money was being spent at that time. It was asked if they had too much trust in the professionals on the borough team instead of looking into matters themselves as well.

In other news, Cunningham and Eckhart reported the borough’s bond rating recently upgraded. S&P Global Ratings recently moved the borough from BB+ status, to BBB-, with a positive outlook. According to Eckhart, the borough had an A+ rating in 2021, but the financial difficulties of the past few years caused the rating to drop. He said they have been working hard to bring the rating back up, and this change marks the borough’s second consecutive upgrade.

Cunningham reflected back to 2023 when the borough took part in a Strategic Management Planning Program with the Department of Community and Economic Development to help combat the financial situation they were in. According to Cunningham, the options were to declare bankruptcy and have the state take over running the borough or do the Strategic Management Planning Program and work with a financial consultant.

He noted this program, along with the work of the borough administration, has helped get the borough back on track. It was noted they are still finding setbacks, but Eckhart noted they are committed to continuing forward.

Eckhart also provided a quick overview on the 2026 budget process. He shared the current numbers with council and asked them to dive in and look for cuts. As it stands, there is a deficit between revenue and expenditures, so he wants council to look for places to trim numbers.

A resident brought before council an issue she said has been going on for 19 years. It started as a parking issue with a residential day care on Limestone Street. She said they were assured parking would not be a problem since the day care would only have about three children. The resident noted she has seen as many as 12 children.

She and her husband said the parking situation has been a nightmare, with them getting blocked in and suffering vehicle damage. It was noted the narrow width of the street is a factor.

The resident said she has tried getting the issue resolved, but things have escalated. She alleged she is being “harassed, threatened and chased” by representatives of the day care.

She noted she has called the police about the parking issues, but the department just issues warnings with no real action. She said she plans to file a report about the harassment measures.

Barbara Schlegel said she will explore the matter with the police department, and Cunningham and Eckhart asked the resident to keep them in the loop about the issue.

Council approved five ordinances and one resolution. They unanimously voted to approve ordinance 1450, detailing the borough manager’s duties; ordinance 1452, adding a handicapped parking space at 541 Walnut St.; ordinance 1453, updating sewer connection surcharge levels and tapping fees; ordinance 1454, restricting parking on 14th Street by Sheckler Elementary School for a public safety, line-of-sight issue; ordinance 1456, adding a business license registration to help establish a business registry and maintain proper records of businesses in the borough; and a resolution updating the borough fee schedule.

Ordinance 1455 was tabled. This ordinance would prohibit camping on public property. Councilwoman Kim Brubaker, seconded by Councilwoman Virginia Schlegel, asked for the issue to be tabled while they discuss all the factors of this sensitive issue, especially consequences. They both said they have been in discussions with representatives to explore additional resources and outreach. They are expected to bring options to a workshop meeting.

The vote to table the ordinance passed 6-1, with Councilman Eugene Schlegel voting against.

A resolution adopting changes to the Civil Service Commission rules and regulations, including modified qualifications and physical fitness requirements, was sent back to the commission. Solicitor Chuck Smith noted some things were missing, and the official document needed some cleaning up.

Engineer Vanessa Nedrick asked council to approve a change order for the first trickling filter replacement project. She noted final costs came in lower than expected, and council approved the lower overall cost from about $290,000 to $240,000. Nedrick reported the extra funds will roll over into the second trickling filter replacement project.

Council also approved the final payment of $31,000 to close out the project.

Eckhart and Nedrick reported the project was 100% grant funded.

Nedrick requested council approve awarding the pocket park at 14th and Poplar streets project to SLC Excavating. She noted the borough received six bids, and SLC’s was the lowest.

VM Development Group wants to meet with the borough to present a final engineered plan for the Iron Works site, to span three phases. Additionally, the Redevelopment Authority of Lehigh County continues to seek additional grant funding.

Councilwoman Tara Nicholas reported the River Central Multimunicipal Comprehensive Plan is close to having the zoning plans done. She also noted there are still vacancies on the borough code board of appeals.

Brubaker noted Catasauqua Main Streets was set to host a meet-the-candidates event Oct. 29 at Taylor House Brewing Company.

During the recreation committee report, it was noted Catasauqua Park and Playground would be open during the annual Halloween parade with fun activities and music.

At the end of the meeting, Councilman Eugene Schlegel said there was a recent confidentiality leak in the borough and asked if they could look into what happened and possibly seek action if it violated the Sunshine Act. Cunningham said there were Whistleblower Law protections to consider in this issue, and Smith noted it should be discussed in executive session since it is a personnel issue.

After the meeting, Candace Maxwell-Kern, administrative operations and community coordinator, reported this was in reference to the public safety concern she brought before council regarding the loaded firearm that was found in a public bathroom, reportedly left behind by a police detective. She said she shared the details with council to inform them of the steps she took after consulting with the appropriate authorities, and her comments should be protected under the Whistleblower Law and First Amendment.

“I was not advised of any confidentiality and acted in good faith out of concern for the safety of staff and the public,” Maxwell-Kern said.

Borough council next meets 7 p.m. Nov. 17 for the regular business meeting in the municipal complex, 90 Bridge St.

(Editor Kelly Lutterschmidt contributed to this report.)