HONESDALE — A major payout and two mistakes indicate the financial situation of Honesdale Borough is not as well as had been expected.

HONESDALE — A major payout and two mistakes indicate the financial situation of Honesdale Borough is not as well as had been expected.

During a special meeting of the Honesdale Borough Council on Wednesday morning, finance committee chairman Scott Smith outlined the current budget.

Council members Juanita Pisano and Sam Mikulak were not in attendance.

Smith said at the end of September, the borough had $200,000 in its accounts to pay the bills.

He said the "planned income" for October through December is $160,000 and total expenses are projected at $300,000.

"We will end up okay for the end of the year," said Smith.

He added, however, the borough will have to "tap into" the reserve funds "much greater than expected."

Smith said the borough has had to spend $80,000 to $90,000 of the $100,000 in reserves which were set aside at the beginning of the year.

One major unexpected expense came with the retirement of former police chief Joe LoBasso. Smith said when LeBasso left, the borough had to pay him $30,000.

The rest of the money came from two mistakes which were made concerning the liquid fuels funds.

The first meant $30,000 had to be transferred from the general fund into the liquid fuels fund. Smith said two bills were paid from liquid fuels but auditors determined the purchases were not advertised or purchased properly. That happened in 2010 under the previous council.

Then in 2011, under the current council, borough officials purchased a truck through the liquid fuels fund but "did not follow the right procedures," according to Smith.

That money, too, had to be taken from the general fund and placed into the liquid fuels fund.

Councilman Jim Brennan asked if the proper procedures are now in place to make sure this doesn't happen again.

"Absolutely," said Smith.

In another budget matter, Smith said he is "behind" in getting out the budget plans to the department heads.

Smith said he plans to get those out this week and then there will be a working session with the council to go over the numbers in determining the 2014 budget.

Smith did tell the council he expects the reserve fund to be down considerably next year. Those numbers will not be determined, however, until the council sets a preliminary budget.

That will then have to go through a public hearing process before the council sets the final budget in December.

Police matter

In another matter discussed by the council, a motion was made to officially rescind the July 22 appointment of Sgt. Ron Kominski as office in charge of the police department.

Kominski led the department until recently when Rick Southerton was appointed to the newly announced position of police commissioner.

When asked for discussion, Mayor Ed Langendoerfer asked the council if they "deem it wise to eliminate the chief position and replace it with a non-union position?"

"That has nothing to do with this motion," said council president F.J. Monaghan.

No other council member spoke about the issue.

The motion to rescind Kominski's appointment passed 5-0.

Other business

In other business:

• The council voted 5-0 to issue a temporary certificate of occupancy for the new CVS Pharmacy in Honesdale.

The final certificate of occupancy will be issued once all of the paperwork is completed by PennDOT concerning the 4th and Main intersection.

CVS is expected to open this Sunday.

• The council voted to spend $2,112 to repair and replace sewer pipes in borough hall.

• Tom Shepstone told the council there is a "gigantic hole" near the professional building on Fourth Street. He said it is connected to the borough's storm sewer system.

"We need to work together to correct the problem," said Shepstone.

The hole is located in private property.

• Trackside Grill owner Jeff Hiller also addressed the council. Hiller said he wished that council meetings "had more people from Main Street" in attendance.

He also told the council he thinks a tainted picture is being painted about Honesdale, apparently referring to the controversy surrounding the police chief situation, though he did not say that directly.

He believes that people are staying away from Honesdale despite the fact many local people are "working hard" to attract more people to the borough.

"I hope all parties involved can resolve it," said Hiller.

• The council also conducted an executive session for the purpose of police negotiations.