Past verbal agreements and handshake deals contributed to Greenville becoming a financially distressed community.

But at least some of those informal contracts appear to have been well-intentioned.

Sandra Stainbrook, a former borough secretary, addressed borough council Tuesday to explain why she felt an unwritten promise made to her by former Borough Manager Peter D. Nicoloff Jr. should be kept and how efforts by current borough and state officials to right past mismanagement and poor fiscal practices in the borough could be wrong.

Mrs. Stainbrook said she was 62 years, 4 months old when she retired in May 2001 for health reasons.

"At that time, (Nicoloff) assured me that my hospitalization would be paid until I was 65, as had been done for (former) Borough Manager Marie Julian," Mrs. Stainbrook said.

Since then, 14 months of premiums have been paid by the borough.

But Mrs. Stainbrook said she was notified -- late last month, via letter from Borough Manager Kenneth S. Weaver and council President Richard S. Houpt -- that her borough coverage would be dropped on Sept. 1, because there was no on-the-record council action authorizing that her premiums be paid by the borough.

She said she asked Weaver if she would be able to keep the coverage if she were able to get signatures and a statement regarding the approval of the hospitalization, and Weaver told her no.

"Secretaries never had a written contract, and my retirement was not even recorded in council minutes. Am I not legally retired?" Mrs. Stainbrook asked council.

"If this issue should have been in council minutes, then you are saying that the fault lies with the lack of knowledge of managers and councilpersons from years back. We trusted our employers to know the proper procedures, rules and regulations. This was not the secretary's job," Mrs. Stainbrook said.

Mrs. Stainbrook said there has been a precedent of unwritten agreements in the borough. She cited past cash advances to borough employees and officials, pay raises that were not approved by council, a car lease for Nicoloff that was paid for by the borough, and hospitalization coverage for other retired borough employees.

"I could understand your desire to change policies upon your (council members') election, but how can you go back and change my insurance when you have paid it for 14 months?" Mrs. Stainbrook said. "I realize that the borough is in a sad state of affairs, but I did not create this mess, so why am I being punished?"

She said her $206-a-month premium is "a drop of water in an ocean of debt" for the borough, but it could eat up her pension like a tapeworm.

After Mrs. Stainbrook addressed council Tuesday, most of the more than 50 residents attending the meeting applauded in support of her. Several residents and a borough firefighter spoke in her defense.

Council convened into executive session for more than an hour then Weaver informed Mrs. Stainbrook that the borough would stand by its decision to discontinue her coverage.