Newville Borough financials are a mess right now – and it could mean higher taxes for residents

December 13 – Since 1994, Fred Potzer has been borough manager for Newville, a quaint little town in Cumberland County, just north of Shippensburg. 

At the end of last year, Potzer got sick and needed help with his duties for the first time in almost 30 years. 

It was only then that questions started to come up about how money had been handled during that time. 

Apparently Newville Borough is looking at hundreds of thousands of dollars of misappropriated funds, including unpaid bills and employee pensions that have not been paid. There is also an outstanding loan for more than $150,000 that has not been paid. 

Earlier this year, Potzer was fired as borough manager. 

An audit of all the finances is currently underway and a loan was taken out to pay off the debt. 

The borough may be looking at cuts to the police force as well as an increase in both property and income taxes to pay off the loan. 

Attorney Clint Barkdoll said, “That little borough is in dire straits. A few weeks ago, they raised their local wage tax if you live in that borough to over 3 percent. That’s got to be the highest in this entire region. Now they’re entertaining massive real estate tax increases. They’re also looking at cutting their police force. They only have three full time officers. There’s some proposal that may reduce that down to one and it’s all in light of these financial problems. The allegations are that a former employee has misappropriated or at least mismanaged to be charitable about it, a lot of money over the years and when you’re a borough that small, you don’t have a reserve. There is no way to recoup that without massive increases in taxes.”

A recent Newville Borough Council meeting saw a lot of residents show up to voice opinions. 

Barkdoll said, “They, I believe, meet again next week, and will have to adopt some kind of a final plan on how they’re going to get out of this hole.”

Michele Jansen of NewsTalk 103.7FM pointed out, “Newville, as I was researching the story, had problems in 2013 with the tax collector under investigation and potentially missing funds. So you would have thought that they would have learned their lesson. There’s something called good accounting practice where you’re supposed to have more than one set of eyes on the things going on financially. You would have thought that this wouldn’t have been possible after incidents in 2013 where the tax collector was under investigation, but it sounds like no. They didn’t bother to apply that.”

Barkdoll said, “It’s interesting that an audit never detected this either. Again, going back to 2013, I would surmise there would have been extra scrutiny moving forward on how borough funds were being managed. So it’s interesting how this seemingly slipped through the cracks all of those years. When you’re dealing with a small municipality like that, and you’re looking at now a local wage tax of over 3 percent, massive real estate tax increases, this is a problem for everyone because if you live there, you’re probably thinking about relocating and if you are considering moving there, this would be a huge deterrent to move into that borough or open a business there. So they’re going to have some real challenges going forward getting out of this mess.”