PRESQUE ISLE TOWNSHIP - A fire department in Presque Isle Township has closed due to financial trouble, and now faces a foreclosure auction on Sept. 20.
Presque Isle Township officials have decided not to renew a contract with the Presque Isle Fire Department, a privately-owned nonprofit organization. The department's fire trucks could be repossessed, and it faces foreclosure and a tax lien. This is due in part to an alleged embezzlement by a former employee, according to department administrator and former Township Supervisor Patrick Pokorski. Now, both sides blame the other for the department's situation, a Michigan State Police investigation failed to turn up any evidence of embezzlement and neighboring fire departments are handling emergency calls.
Presque Isle Township Supervisor Brent Koel said he wasn't aware of the department's troubles until he was contacted by Kansas State Bank concerning late payments for its fire trucks. The bank contacted him shortly after he was elected in November, unseating Pokorski. He believes the bank contacted him under the assumption the department is run by the township.
Unlike most fire departments serving all or part of a township, Presque Isle Fire Department is privately run, with the township contracting with it for service, Pokorski said. This arrangement was typical several decades ago, but now most township fire departments are run by local government or fire authority.
After meeting in December with Pokorski and two other department members, including Pokorski's son, Ross, Koel said he and township Treasurer Bette Tadajewski agreed to pay the bank $15,000. A month later, the township cut another check for $12,000 for the same purpose. Pokorski told the board in January he was working to refinance the department's truck loan, and agreed to an audit of the department's finances. Neither of these things happened, according to Koel.
From December through June, the township paid out $142,345.71, including $10,888.13 in delinquent taxes, according to township financial records. This is roughly the amount the township owes the department under their July 2012 to June 2013 contract. Copies of the checks, provided by Koel and Tadajewski, show that some were made out to Kansas State Bank and the fire department, with Ross Pokorski endorsing them as department president. Others were made to insurance company Burnham & Flower, as the department's liability insurance had lapsed in 2012.
Pokorski said the township made payments to the department and its creditors, but believes the township defaulted on its contractual payments. He accused the township of putting stipulations on its payments and believes he's being personally attacked. He's been with the department since 1993 and was made admimnistrator in 2011, adding past mismanagement is also to blame for the department's troubles.
Pokorski also was critical of Koel's decision to pay the department as the township did, six months after the contract began.
"I told (Koel), if he kept doing this, the department wouldn't be able to run through the year," he said.
Koel disputed Pokorski's claims, saying the township requested some things from the department. He pointed out the contract never states when the township has to pay the department, and most of the money was paid out as fire millage revenues came in.
On the advice of the township's lawyer, Koel said he contacted the Michigan State Police in December to relay Pokorski's allegations of embezzlement. Detective Sgt. Richard Rule said in an email that he spoke to both Pokorskis, who told him a previous employee took $70,000 from the department's checking account. Rule conducted search warrants on two of the department's accounting firms, but found no evidence of wrongdoing.
After five months, Rule closed the investigation and the accounting records were forwarded to the Michigan Attorney General Office, Rule said. No evidence of embezzlement was noted, although the office did question some of the department's accounting practices, according to an email from Rule. Rule closed the matter after consulting with Presque Isle County Prosecutor Richard Steiger and the AG's office.
"We don't have any information that there was an embezzlement," Rule said Wednesday.
The department faces a lien for unpaid payroll taxes dating from 2010, Pokorski said. What's more, a $49,000 loan the department took out in 2012 to keep the department afloat is now in default. The department owes Besser Credit Union $50,124.46, according to a public notice. If some sort of deal can't be reached, the department building will be sold on Sept. 20, with six months to redeem the property after.
Pokorski said he's considering his options for settling the department's debt, including selling one of the trucks. He's also discussed ways to keep the department open with Alpena Township officials.
Koel said he's also talking with Alpena Township, as it's providing fire coverage south of Grand Lake through its own fire department. One possibility would be to contract with Alpena Township to operate the former Presque Isle Fire Department as a satellite station.
Koel said he believes the now-defunct department lacks the manpower to adequately serve its part of the township, and created its own financial crisis.
"I think the township has done everything in our power to keep that department going, and we cannot at this time contract with a department having these kinds of issues," he said.
Pokorski doesn't wish to contract with Presque Isle Township either, and announced as much in an August press release. The announcement came out just before a contract extension between the department and township expired.
Meanwhile, Alpena Township firefighters are providing mutual aid to southern Presque Isle Township, as are Maple Ridge Township and East Grand Lake Fire Department personnel, Koel said