5 things to know about Cape Coral finance controversy

Cape Coral City Council will again consider the controversy over the city's finance department at a meeting Monday afternoon. The council could take action to remove County Manager John Szerlag from office, at least temporarily, while investigations continue.

Here are five things to know about the controversy:

1. At issue is failure to pay the IRS more than $400,000 in money withheld from employee paychecks. The county contract employee who got notices from the IRS about the failure to send the funds kept the notices from her supervisors. It resulted in the IRS attaching gas tax revenues due to the city from the state. The accounting clerk has since resigned.

Read: Cape Coral City Council orders look into $402,000 problem with IRS

2. Mayor Joe Coviello said City Manager John Szerlag knew about the situation but failed to inform the council about what was happening. Coviello also noted that the manager was negotiating a pay increase as part of a six-month contract extension to take him into retirement. Szerlag has defended himself and says he will fight to protect his reputation, which he describes as "stellar."

Read: Cape Coral City Manager John Szerlag to retire; city council prepares for successor

3. Three employees were placed on leave after the tax withholding issue was discovered. Included was Finance Director Virginia Bateman, who sent a letter to individual City Council members listing allegations against Szerlag, some dating back more than a year, before the IRS issue was revealed. Bateman claims intimidation against her and her office.

4. Bateman's letter has not been released despite a public records request, even though its contents were discussed in public, in the presence of the city attorney, with no caution or advice to members of the city council not to reveal its contents.

5. Council members voted to ask for outside investigations into the failure to turn money over to the IRS and the city's response. Both criminal and administrative probes were requested. The council discussed putting Szerlag on administrative leave last Thursday but did not vote on it. The issue is expected to arise again at the council meeting scheduled for Monday at 4:30 p.m.