A judge Thursday morning said he was “leaning toward” green-lighting an emergency request by Millvale to take out a $2 million loan to avert a looming budget crisis.
Allegheny County Common Pleas Judge John T. McVay Jr. did not rule from the bench on the borough’s request but said he’d make a decision “soon.”
Attorneys representing the borough of 3,300 residents along the Allegheny River told TribLive they hope to resolve the matter in the next two weeks and close on the loan by March.
Millvale officials testified that they first learned about the fiscal crisis early last year.
Council president James Machajewski said Ed Figas, who was then the borough manager, asked him to meet about “financial liabilities” three hours before a council meeting in February 2025.
Figas was moving money from dedicated funds to plug holes in the budget and pay down debts, Machajewski said he learned.
While there were no accusations of any criminal conduct, Figas was removed from the post for not keeping council apprised of the debt, according to borough Solicitor Jack Cambest.
Figas did not immediately respond to phone calls on Thursday.
“We were not aware of the situation from the reports we were getting,” the councilman testified. “We found debt we didn’t even know about, that he wasn’t telling us about.”
Currently, Millvale owes more than $250,000 on a short-term loan the borough secured in July 2024, said attorney Samuel J. Dalfonso, who represented Millvale in court this week. That money must be paid back by the end of this year.
Millvale also owes:
- more than $410,000 in pension costs
- nearly $480,000 in utilities and taxes
- $200,000 on police vehicles and infrastructure improvements
- more than $225,000 on building and janitorial supplies, personnel, fleet costs and insurance
About $380,000 in debts are due in the next 30 to 90 days, Dalfonso said.
The ‘No Man’
“Things started going awry” in February 2025, interim borough manager Joe Kypta said.
Kypta testified he started fielding calls around that time from banks looking for money Millvale owed.
“ ‘Don’t worry, Joe, this is being taken care of,’ ” Figas, the former manager, would say, Kypta testified.
After Figas’ departure last year, the municipality responded to its financial woes by shutting down all discretionary spending, Kypta said. State Department of Community and Economic Development staffers came to Millvale to help craft both short- and long-term financial plans. All expenditures needed to be approved by Kypta.
“I said, ‘I’ve got to stop everything,’ ” he told the judge. “I’m the ‘No Man.’ ”
The borough council also increased Millvale’s property taxes 58% last year, its first increase in more than a decade, to help pay debts to utility providers, insurance companies and others.
“Many people were upset” about the tax hike, Machajewski testified. “It’s been a tough journey but it’s something we had to do to stabilize our situation.”
Machajewski has served for 16 years on the borough council, 13 of them as council president. During that time, the governing body has previously increased taxes once — but cut them twice, he said.
Dire picture
Borough officials painted a dire picture of what could happen to Millvale if its officials don’t secure the First National Bank loan.
Without the loan, Millvale might need to cut services and lay off employees — possibly including police officers, Machajewski testified Thursday. The borough’s payroll currently includes about 10 municipal and public works employees.
Millvale police Chief Timothy Komoroski told the judge that cuts to his eight-officer force “would be devastating to the town.”
The force handles more than 600 calls a month, the chief said. If Millvale needed to rely solely on Pennsylvania State Police patrols, residents would face “up to a half-hour in delays.” Troopers might only respond to serious crimes or emergencies, he added.
“It would throw everything into chaos,” Komoroski added. “It’s not the time in history to pull back on policing.”
Pennsylvania’s Local Government Unit Debt Act requires municipalities with outstanding, unfunded debt to seek a Common Pleas judge’s approval to borrow money, if the public’s health and safety are in potential danger.
If the judge approves Millvale’s petition for the loan, the municipality expects to pay back the funds within 10 years. Payments would be made in twice-yearly installments — one in June, another in December.
Millvale plans to save $290,000 every year from its property tax revenues to pay down the $2 million loan, Dalfonso told the judge.
“It’s an unfortunate situation the borough’s in, for sure — and it has to take action,” McVay responded.
Millvale budgeted $4.28 million for expenditures in 2025, online records show. It also was set to receive an estimated $845,000 in property taxes.
Funds for Millvale’s police force accounted for about a quarter of the 2025 budget and was its single largest expense, online records show. Administrative wages totaled about $505,000.
In a crowded City-County Building hallway in Downtown Pittsburgh after the hearing, Dalfonso told TribLive Thursday’s 45-minute session “went well.”
“I think we got across that the borough understands the situation that they’re in,” he said.