Update: If Derby Worker Pays $9,000, City Won’t Call Police

A Derby City Hall tax office employee has resigned and agreed to pay the city $9,000 in “damages.”

The details come from a separation agreement approved by Derby Aldermen Aug. 23 and made public Tuesday.

The city will file a criminal complaint with police if the former employee, Katherine Kulhawik, doesn’t pay $5,000 within 30 days, according to the agreement.

The document sets up a payment plan for the remaining $4,000. As part of the agreement, Kulhawik also agrees not to file a lawsuit or union grievance against the city.

Kulhawik’s lawyer did not return calls for comment.

Kulhawik was escorted out of City Hall and suspended without pay June 25 after her supervisor — Tax Collector Denise Cesaroni — accused her of mishandling cash payments from residents.

Kulhawik was allegedly receiving cash tax payments, issuing people receipts saying they paid and then voiding the cash payments from the system.

While Kulhawik is agreeing to reimburse the city to the tune of $9,000, city officials have deliberately and repeatedly stopped short of saying money was stolen — but they promise to file a criminal complaint if money isn’t paid.

Derby’s handling of the tax office matter differs from Ansonia, where there have also been problems in the city’s tax office.

After an article appeared in the Valley Indy, Ansonia Mayor James Della Volpe announced the formation of a three-person “fact-finding” team to look into the matter.

The team prepared a written report, which was also made public. Ansonia Aldermen are reviewing proposed reforms in the tax office.

Ansonia police turned over the city’s “fact finding” report to a prosecutor, who is deciding whether the situation merits criminal charges. The situation in Ansonia did not involve cash.

Meanwhile, Derby officials have been far more cryptic when answering questions about the allegations they have made against Kulhawik. The Aldermen met in executive session at their last meeting to discuss “security” in the tax office, but offered no public explanation.


The agreement says Kulhawik “may have engaged in mishandling of cash, misapplication of payments and data manipulation or fraud.”

The document gives Kulhawik seven days to rescind the agreement. City officials chose their words carefully when interviewed about the subject Tuesday.

A copy of the agreement is posted below. The article continues after the document.

Kathy K Separation

Mayor Anthony Staffieri said the agreement is in the city’s best interest.

“We caught the problem, we got the amount, it is being paid back and we are moving forward,” Staffieri said.

When asked why the city didn’t file a report with police, Staffieri said:

“The city talked to the police department. We got their advice and we acted in the best way to do it.”

The alleged data manipulation was uncovered after a resident was unable to register her vehicle with the Department of Motor Vehicles because the DMV said she owed Derby car taxes — but the woman had a receipt from Derby City Hall saying she had paid.

Derby tax clerks then searched the office — including a trash can — in an effort to find the resident’s cash payment or a paper slip associated with it. Neither were found.

The following documents related to the investigation were released by Derby Aug. 7. They include a statement from Cesaroni and a letter from the city’s corporation counsel.

Derby Releases Docs

When asked why the city isn’t filing a criminal complaint Tuesday, Derby Corporation Counsel Joseph Coppola said:

“What’s your assumption, that you rather make a complaint to the cops than to do this? I don’t understand,” he said.

“The way that agreement works, if she doesn’t pay the $5,000 by Sept. 30, we will make a formal complaint to the PD. The crime is probably in the realm of I guess what you would call fraud,” Coppola said.

Valley Indy Facebook readers commenting on the news Tuesday did not approve of the way Derby handled the issue.

Aldermanic President Ron Sill also said the board did what’s best for the city.

“When people see the details and know the facts going back through the months of what really happened, I think people will realize that this really was in the best interests of the city,” Sill said.

Sill declined to reveal anything more Tuesday.

When asked about the specifics of the agreement’s language — and how it mentions “damages” instead of missing money, or theft — Sill indicated there’s more to the document than meets the eye.

“The lawyers talk a different language than we do,” he said. “If there’s an agreement to pay money back, then something happened here.”

Again, he declined to go further.

But he said the agreement was the best way to move forward and obtain restitution for the city sooner rather than later.

He contrasted Derby’s situation with that of Oxford, where the town filed a criminal complaint and also sued an ex-tax collector accused of stealing hundreds of thousands of dollars.

Oxford’s lawsuit is still pending, Sill pointed out.

“Here we’re able to recover some if not all,” he said, adding that Kulhawik’s situation is “totally different” to Guillet’s.

Guillet faces five years in prison.

“We’re off to a quick start with recovery here and a quick end by the looks of it,” Sill said. “I believe that’s the way the Aldermen saw it too.”

The tax office problems were first questioned publicly by Derby Democratic Town Committee chairwoman Sheila Parizo, who posted a comment on the Valley Independent Sentinel July 14 asking why an employee was escorted out of Derby City Hall.

Reporter Ethan Fry contributed to this report.


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