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Former Dewey town manager used military surplus funds

Commissioners awaiting completion of five-year review of accounts
January 22, 2018

Story Location:
Dagsworthy Street
Dewey Beach, DE 19971
United States

Not only does it appear former Dewey Beach Town Manager Marc Appelbaum knew about the town’s participation in a federal military surplus program, it appears he used the program to the town’s benefit outside the scope of the police department.

During a Jan. 13 town council meeting, Commissioner Paul Bauer presented a number of documents showing Appelbaum signed off on the town’s participation in the surplus program, used surplus equipment in exchange for demolition of a town-owned building, and put the money from the sale of another item into the town’s general fund.

In October, the Cape Gazette reported on the police department’s participation in the federal military surplus program and that the department was using funds from the sale of equipment to supplement police department revenue. At the time, Appelbaum said he was aware the police department was participating in the program, but not to what extent.

Appelbaum, whose last day as town manager was Oct. 20, could not be reached for comment.

The first document Bauer provided was a deposit slip in the amount of $35,000 for the sale of a bulldozer acquired through the program. The money was deposited into the town’s general fund, which, said Bauer.

Bauer then showed a letter signed by Appelbaum from October 2015 acknowledging the town’s participation in the program. Bauer said this letter is a requirement for a town to participate in the program.

The final document was a May 2016 estimate from Lewes-based demolition company Dirt Works discounting the price of demolishing the former Seasons Pizza building in exchange for a forklift the police department had acquired through the program. The Route 1 property, 1503 and 1505 Coastal Highway, was one of two neighboring lots the town purchased in March 2015 for $875,000.

Bauer also presented the other commissioners with a list of more than 400 items the town has procured over the last five years. He said as recently as August 2017, Dewey’s police department had undergone an audit by the federal government to make sure each piece of equipment was accounted for.

This items used in this program have been out in the open and helped the town’s residents, said Bauer, dispelling the myth the police department was hiding the equipment.

Commissioner Dale Cooke, who was mayor last year, said he was aware the police department was using the program.

Immediately following the presentation, Commissioner Gary Persinger said he did not know about the program until reading about it in the Gazette, and he wasn’t satisfied with the information provided by the police. He said the presentation showed some property had been sold, but he wanted to know how the rest of the equipment had been used, disposed of and accounted for. There may be other sales that have not been accounted for in town revenue, he said.

Referencing the biannual reviews, Mayor TJ Redefer said the federal government already accounts for the police department’s handling of the equipment procured by the town. He said it was inappropriate for the commissioners to be asking anything other than if there was additional revenue.

Redefer said the town should let Salisbury-based TGM Group conduct its five-year look back into each town department’s procurement procedures and any other revenue-generating activity not under the finance department’s control. The accounting firm was hired in December, and Redefer said during the council meeting the review had been started.

According to a Dec. 9 agreement letter from TGM, the agreed-upon procedures audit is expected to cost $10,000 to $12,500 and take 65 to 80 hours to complete. More than dozen current employees and Appelbaum are expected to be interviewed.

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