Greenville solicitor Warren Keck III said Friday that the borough's use of bond-issue money for general purposes was unauthorized.

"The project (for which the bond was floated) was defined as the sports complex, the fire station and downtown revitalization," Keck said.

About $500,000 of the $3.5 million bond to support the multi-million-dollar recreation and revitalization project was put into the general fund to keep the town afloat financially in 2000, according to an audit of borough finances.

Keck said most of the half-million dollars was used for general expenses -- not for the project or other capital improvements. "I'm reasonably certain that virtually all of it (the bond money) was used for day-to-day expenses," Keck said.

"No one knew that was being done until it was brought to council's attention in November of last year," third-year Councilman Bryan Langietti said Friday.

Langietti said former Borough Manager Peter D. Nicoloff Jr., who resigned in October, told a financially-strapped council it "could draw money from the bond just as long as we paid it back before the project was completed."

"Then we found out $500,000 had already been used," Langietti said. "We were shocked."

Langietti added: "We were told that these kind of things could be done while projects are active. As it turns out, they can be done if you get permission. But we didn't do that. We did it on our own accord."

Both Langietti and Keck said the bond money used for general purposes in 2000 has not been replaced. Neither indicated whether more bond money was used last year for general purposes.

Keck said that information will be revealed in the 2001 audit. The borough expects to receive a copy of that audit within two weeks, he said.

Auditors initially predicted they would complete the audit by the end of February, but Keck said the borough asked for the audit to be "expedited" because new Borough Manager Kenneth S. Weaver and council need to have a clear picture of the borough's finances as the current-year budget is reworked. Weaver and all but two council members -- Langietti and President Richard Houpt -- have been on the job less than a week.

Council reopened the $3 million-plus budget -- which calls for a 4.6-percent hike in property taxes, but still is about $90,000 in the red -- on Monday and said it would make cuts to balance the plan by Feb. 15.

Despite advances from the bond, Keck said the bond is still sound. "To my knowledge, there been no default in payment and bond-holders are being paid on schedule," he said.

You can e-mail Herald Staff Writer Tom Fontaine at tfontaine@sharon-herald.com