The City of Shady Cove published a report on delinquent payroll taxes paid in arrears, and discussed the situation at the May 7th, 2026 Council meeting.
The report showed a significant amount of payroll taxes were paid almost two years late -- apparently in conjunction with the completion of the first delayed audit in early 2024. For the four-year period 2021 - 2025, total fines/fees associated with the failure to file IRS 941s and late taxes appear to be somewhere north of $81,000 dollars.
We applaud the Council for being transparent on this subject. Residents would rather hear bad news than "everything's fine". The Council also passed a resolution to implement payroll services through ADP payroll services to help prevent future issues.
Link to the report: https://shadycove.org/wp-content/uploads/2026/04/Penalties-and-interest-paid-on-back-taxes-R1.pdf .
The City failed to file IRS 941 forms (Employers Quarterly Federal Tax Returns) from Q1/2021 to Q2/25.
SCM previously reported the existence of IRS Withholding failures, after confirming that an email was provided to Mayor Richardson and all City Councilors on 9/29/2025 (making it public record). Shady Cove was delinquent on IRS payroll reporting for over four years. The attachments to the letter indicate Shady Cove was sent multiple letters with notifications of delinquency. The missing filings date from March 2021 through June 2025.
Audio recordings from 2024 seem to indicate budget committee members were aware of a problem at that time.
The start of the failures appears to coincide with the same timeframe in which Shady Cove stopped reconciling bank records in 2021. Paperwork to complete the filings (totaling almost $300K) was apparently completed in September 2025. However, the actual financial impact to the City was not announced publicly until May 7th, 2026. Scroll down below to read the letter and attachments.
*** We recommend all Shady Cove employees check their reported IRS and Social Security contributions to ensure they are accurate. ***
On December 18th, SCM Treasurer Natalie Swendener asked Mayor Richardson what the City planned to do about the problem.
Mayor Richardson's response: "Thank you for your comment"
During Shady Cove's FY24-25 budget committee meeting on June 4th, 2024 there are two instances where City leaders acknowledge additional problems with PERS and payroll taxes with the last completed audit. The audit that is referred to appears to be FY20-21, completed in Feb 2024.
Audio excerpts have been combined for ease of listening, however these occurred at different times in the meeting. See the Shady Cove website for the full audio (when prompted for a password use ky&r8m#3 ).
At approximately 26:43 minutes into the recording, a City Leader talks about the last audit (FY 20-21 which was completed -- disclaimed-- in Feb 2024) and states “It really is that god-awful. “Uhm, in that last audit, if you got into the actual entries and stuff, there were payroll taxes that weren’t paid for a whole year.”
At approximately 37 minutes into the recording, another City Leader acknowledges that the City had a PERS payment problem. The City Administrator (who had been on the job for about 3 weeks) discusses personally calling the state to confirm PERS payments are cleared up, and says the City is waiting on fees to come in from the federal government.
Paid for by shady cove matters political action committee
We use cookies to analyze website traffic and optimize your website experience. By accepting our use of cookies, your data will be aggregated with all other user data.
THE CITIZENS OF SHADY COVE HAVE SPOKEN!!! We were notified on June 10th that Jackson County completed the signature verification. As we already knew, there were enough signatures to proceed with the recall. Mayor Richardson will have till June 15th to decide to resign or make the decision to have the City hold an election. We await the City's response.
It's time for new Leadership. Learn how you can support the recall effort.