Scranton Wants To Declare Bankruptcy

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

SCRANTON, PA — When Detroit filed for bankruptcy, hundreds of residents took to the streets to protest what they saw as a drastic approach to fixing the city’s budget problems.

But in this hilly town of 76,000 in northeastern Pennsylvania, residents have a different view of Chapter 9: They want the city to declare bankruptcy. And soon.

“The silent majority would like to see bankruptcy,” said Bob “Ozzie” Quinn, president of the Scranton and Lackawanna County Taxpayers Association. “Basically, it’s down to a point where people cannot afford to pay the taxes and are moving out of town.”

Faced with a $20 million deficit, Scranton had to do some tricky maneuvering to balance its budget and avoid defaulting on loans. Most of this maneuvering has involved increasing taxes and fees paid by the people who still live in the town, which has seen its population drop by half since the 1930s.

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In Downtown Scranton Residential Boom, No Sign Of Slowing

Picture 062Four years ago, there was no residential life along the unit block of Franklin Avenue. By the end of this year, more than 55 apartments could be located along Franklin, between Lackawanna Avenue and Spruce Street.

“It’s about quality of living,” former Mayor Chris Doherty said earlier this month before he left office. “I said from the beginning, fail or success, we will go after downtown living.”

Scranton building contractor and redeveloper Art Russo bought into Mr. Doherty’s concept and his latest downtown project is one of his largest.

He is constructing 21 apartments on the three upper floors at the Bittenbender Building, a four-story, 48,000-square-foot structure at 126-132 Franklin. A sports bar, seafood restaurant and speakeasy-themed jazz club will occupy the 9,000-square-foot first floor.

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Scranton Mayor Vetoes Council’s Revisions To His Budget

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

Mayor Chris Doherty on Friday vetoed city council’s revisions to his proposed $130.2 million budget.

Council will hold a special meeting Monday at 5:30 p.m. to vote on whether to override or sustain the veto, council President Janet Evans said.

A split council on Thursday raised and lowered some salaries and added two positions in the mayor’s budget. The amendments did not change the budget total or the 57 percent tax increase and 69 percent trash collection fee hike.

Council voted 3-2 on many of the amendments in a split that had Councilmen Bob McGoff, Pat Rogan and Jack Loscombe, who are all returning to council in 2014, forming a bloc to pass the amendments, and Council President Janet Evans and Councilman Frank Joyce, who are departing council, dissenting.

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Scranton Landlords, Homeowners And Renters Brace For Tax Hikes

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

University of Scranton students Bridget McVeigh and Ashley Opalka are apartment hunting with two criteria in mind: proximity to campus and lower prices than the university’s dorms.

The pair were alarmed city landlords are poised to hike rents in response to a proposed 2014 Scranton budget that would raise property taxes 56.7 percent, garbage fees 68.5 percent and rental registration fees from $50 to $150 per structure and $15 to $50 per unit.

Landlord Carol Smurl said she tries “to be compassionate to the tenants because they’re on a fixed income,” but she and her husband cannot afford to absorb that kind of increase.

Normally, Mrs. Smurl waits until tenants move out to raise the rent or tries to delay passing increased costs on for two to three years at her nine properties.

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Scranton Mayor Proposes 56 Percent Property Tax Increase; 69 Percent Garbage Fee Hike

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

With wary banks watching Scranton‘s finances closely, Mayor Chris Doherty today proposed a $130.5 million budget for 2014 that would dramatically raise real estate taxes, the garbage collection fee and parking-meter rates and penalties.

Read the budget HERE

A real estate tax increase of 56.7 percent would be one of the largest, if not the largest, tax hikes ever in the city. A trash collection fee increase of 68.5 percent – from the current $178 a year to $300 a year – would be the largest garbage fee hike ever.

The large spikes are all necessary to close a $20 million operating deficit for 2014 and restore the city’s creditworthiness with lenders, Mr. Doherty said.

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Mall At Steamtown Battles For Survival

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

As Bon-Ton reported it will vacate the Mall at Steamtown in January, department store magnate Al Boscov admits the shopping complex is battling for its existence.

“I am trying to figure out ways that we can survive,” said Boscov, who developed the $101 million Lackawanna Avenue complex and is a principal in the group that owns the facility.

Bon-Ton reported it will close its 100,000-square-foot store in the mall before its lease expires Jan. 31. Spokeswoman Mary Kerr said it probably will cease operations between Jan. 26 and Jan. 29.

“It’s sad. It’s certainly something that we don’t want to do,” Kerr said. “We do have to make these hard decisions at times.”

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Mayor Holds Line On Taxes, Raises His Own Salary In Proposed Budget

Map of Pennsylvania highlighting Luzerne County

Map of Pennsylvania highlighting Luzerne County (Photo credit: Wikipedia)

WILKES-BARRE, PA – Mayor Tom Leighton proposed a $42.7 million 2014 budget Friday without any tax or fee hikes, a raise for himself and funding to hire additional police officers.

“My goal is to hire at least 10 new officers in 2014, but we will closely monitor the strength of city finances to hire as many officers as the general fund can afford,” Leighton said during his budget presentation at city hall.

Unionized city employees will receive a 3 percent raise. Leighton’s salary also will increase 3 percent for 2014 to $82,309.

Leighton, who is serving in his third term as mayor, said he has not taken a raise for the last seven years amid financial woes

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PEL: Scranton Faces $20 Million Deficit Next Year; Needs To Raise Taxes

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

Scranton city government’s budget outlook for next year continues to worsen as the city now faces a possible deficit of nearly $20 million for 2014, according to the city’s financial-recovery coordinator.

That state-appointed Act 47 coordinator, Pennsylvania Economy League, also urges the city to craft a “realistic and responsible” budget for next year that closes the structural deficit and lists as options unspecified hikes in both the real-estate (property) and earned-income (wage) taxes, and an increase in the city’s annual garbage fee.

“I think the letter speaks for itself,” Mr. Cross said in a phone interview. “It shows where the city is in terms of recovery-plan progress and shows the challenges that we always spoke of for 2014 being a challenging year.”

Read the letter here

City Business Administrator Gina McAndrew said the 2014 budget is in the works. She would not rule out any increases in taxes or fees but declined to say what may be under consideration.

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Residents Of One Scranton Neighborhood Praise City’s Blight Removals

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

Kevin O’Boyle doesn’t own the empty lot alongside his home on Mineral Avenue in Scranton, but he is the one who takes care of it.

“I keep it clean because it’s next to my house,” Mr. O’Boyle said.

Other neighbors do the same thing, as de-facto caretakers of several vacant lots that used to have condemned homes on them in the tiny neighborhood called Sandy Banks encompassing Mineral Avenue and Barrett Court at West Olive Street near the Lackawanna River.

“It’s our neighborhood.  We want to keep it clean,” Mr. O’Boyle said of the community pride there.

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Chris Kelly: Scranton Voters Stick With What They Know Is Killing Them

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

The table was set for reform-hungry Scranton voters to nominate successors to three-term Mayor Chris Doherty, but they showed little appetite for change at City Hall in Tuesday’s primary election.

Just under 37 percent of city Democrats voted; about 19 percent of their Republican neighbors. The turnout was shockingly anemic, considering taxpayers’ endless braying about being bled dry by a parasitic government.

Turnout was similarly listless countywide (35.3 percent), but at least voters supported a government study commission that could lead to real change and voted to keep county row offices, rejecting a naked power grab by the incumbent county commissioners.  Jim Wansacz, Corey O’Brien and Pat “Cheese” O’Malley weren’t up for re-nomination, but voters let them know they were lucky not to be on the ballot.

City voters sent a different message:  Forget belt-tightening!  Bring on the bankruptcy buffet!

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Dems Nominate New Mayors In Pa. Primary

HARRISBURG — Democrats nominated new mayoral candidates in Pittsburgh, Scranton and Harrisburg in the Pennsylvania primary election.

They tapped veteran city Councilman William Peduto as their standard-bearer in Pittsburgh and city Tax Collector Bill Courtright in Scranton, but spurned Harrisburg Mayor Linda Thompson’s re-election bid and chose bookstore owner Eric Papenfuse instead on Tuesday.

Each is favored to win in the November election, given Democrats’ heavy registration advantage in the three cities.  Voters also handed Kim Bracey an apparent second term as mayor of York, where no Republican is running.

In the only statewide nomination race, Allegheny County Judge Jack McVay Jr. won the Democratic nomination for an open seat on the Superior Court, defeating Philadelphia Municipal Court Judge Joseph C. Waters Jr.

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Scranton Parking Garage Revenues Not Meeting Expectations

After four months of Scranton‘s parking garages being operated by a private firm, the bottom line could end up short by $300,000 to $500,000 over a year, according to court documents and a receiver overseeing the garages.

Central Parking took over operation of the city’s five garages in mid-September when the firm was hired by court-appointed receiver Mike Washo.

“Of course it’s a cause for concern,” Mr. Washo said. “It’s cause for concern for Central Parking, for the receivership and for the city.”

Scranton is banking on the private management of the garages to maximize revenue and minimize expenses, so the city doesn’t have to pay as much as it otherwise might to cover the debt of the Scranton Parking Authority, said Mr. Washo and city Business Administrator Ryan McGowan said.

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Scranton’s Parking-Garage Rates Won’t Decrease; Chamber Seeks Parking Input

As Scranton leaders are considering increasing hours, days and rates of downtown parking meters, some business owners want to see the city’s parking-garage rates reduced.

However, the court-appointed receiver in charge of the garages and their rates, Mike Washo, said he has no plans to lower garage rates, because a reduction would drain revenue from the authority and further burden city taxpayers to fund any shortfall that may arise from reduced rates.

“We don’t believe that any reduction in parking garage rates at this time will generate additional customers to justify the reduction in rates,” Mr. Washo said. “At the end of the day, we’ll end up with less revenue.”

In recent weeks, a plan by Scranton’s mayor and city council to hire a private firm, Standard Parking, to manage the city’s on-street parking meters has raised numerous questions and concerns among downtown businesses, residents and council members.  Citing Standard Parking’s estimates, council members think the city can net an additional $1.8 million a year by switching parking-meter management from the inactive Scranton Parking Authority to Standard Parking.  Under this plan, which was tabled Feb. 7 by council, meter hours would extend from 8 a.m. to 6 p.m. Monday through Friday to 8 a.m. to 8 p.m. Monday through Saturday.  Ten-hour meters also would increase from $1 an hour to $1.50 an hour.

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Bank Sues Scranton, Parking Authority And Receiver Over Loan Default

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

Landmark Community Bank on Friday sued Scranton, its parking authority and the authority’s court-appointed receiver over a $2.6 million loan default.

Landmark loaned the Scranton Parking Authority $2.9 million in September 2011, but the SPA has not paid on the loan since the authority was stripped last year of most of its functions, funding and power.

The lawsuit was not unexpected because Landmark’s attorney, Robert Gownley, last year threatened to sue if Scranton City Council terminated a 1995 cooperation agreement between the city and SPA that was used as the basis for collateral and security of the 2011 loan.  The Landmark loan was secured by the 10 percent of parking meter revenue that SPA receives under the 1995 cooperation agreement.

The lawsuit claims that city administration solicitor Paul Kelly, who at the time the loan was made in 2011 was solicitor for both the city and SPA, had told Landmark that the city could not unilaterally cancel the cooperation agreement between the city and authority.

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Courtright Announces Candidacy For Scranton Mayor

The hundreds of supporters entering the front door at the Keyser Valley Community Center on Sunday to see Democrat Bill Courtright formally announce his campaign for mayor of Scranton received smiles and handshakes from the candidate himself.

Bruce Springsteen’s “Glory Days” played in the background as Mr. Courtright focused on themes of “returning the luster” and reaching out to the people of his hometown – a place of staggering municipal debt and significant skepticism about city leadership.

The city’s current tax collector and a former city councilman, Mr. Courtright, 55, of 126 Ridgeview Drive, said he will bring commitment, competence and character to City Hall.

Without going into a lot of detail, he also offered insights into his immediate priorities if elected mayor, calling for an in-depth analysis of the city’s finances and plans to create a panel of community leaders to help solve the city’s problems.

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Chris Kelly: How Can Scranton Find A Talented Mayor For $50G?

picture-0571Editor’s note:  And sometimes people are grossly overpaid and get lousy results, but we won’t name any names.  And sometimes you do a national search for qualified candidates (that was funded by tax dollars), offer a huge salary to attract the cream of the crop and then STILL give the job to your best pal with almost no hands-on experience.

HELP WANTED: CEO for financially distressed 146-year-old limited partnership drowning in long-term debt and enough past-due bills to choke a goat.  Successful applicant will be responsible for managing the needs, wants, safety and endless complaints of 74,000 customers while juggling chronic deficits, anemic revenues, suffocating union contracts and crippling legacy costs using a business model that hasn’t evolved since the advent of indoor plumbing.  ANNUAL SALARY: $50,000.  Seriously.  That is not a typo.

Mayor Chris Doherty’s recent announcement that he will not seek a fourth term as the CEO of Scranton was as anticlimactic as the average January sunset – bleak blue beams bleeding into blackness.  Anyone with a calendar saw it coming.

Eleven years into Mr. Doherty’s reign, the Electric City remains powered more by wishful thinking than objective reality.  More than 20 years after it blundered into the roach motel that is the state’s Act 47 Distressed Cities Recovery program, Scranton is still stuck.  Mr. Doherty promised escape from distressed status by the end of his first term.  He failed, but he had a lot of help.

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Judges Reject Scranton Commuter Tax

A panel of three judges Wednesday rejected Scranton‘s petition for a 1 percent wage tax on the nearly 23,000 nonresidents who work in the city but live elsewhere.

The city may make up the resulting budget shortfall next year by borrowing more next year than had been anticipated or selling an unspecified city asset, Mayor Chris Doherty said.

In their 50-page ruling, Lackawanna County Judges Terrence Nealon and Robert Mazzoni and visiting Pike County Judge Harold Thomson stated the city failed to prove its case for a 1 percent earned income tax on the 22,655 nonresidents working in the city.

The city failed to pass a required hurdle of having “substantially implemented” a revised recovery plan, by failing to fulfill two revenue generators in that plan.  Those included failing to obtain a commitment from a lender for a lease-back borrowing measure to be undertaken next year; and failing to obtain commitments from nonprofit entities for significantly increased donations, according to the ruling.

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PEL: Scranton Needs More Than 12% Tax Hike

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

Scranton‘s state-designated recovery coordinator, Pennsylvania Economy League, has told city officials they need to raise property taxes next year higher than the 12 percent that the city budget for 2013 proposes. Exactly how much higher was not stated.

In a letter received Thursday, PEL Executive Director Gerald Cross notes that the city has not dedicated a tax millage toward paying for the city’s second unfunded debt package approved by a court this year, of $9.75 million. In that case, Judge Peter O’Brien, a senior visiting judge from Monroe County, on Oct. 31 ordered that a tax millage be dedicated to paying back this unfunded debt.

It was the same arrangement the city sought and received in January, when a different judge, Senior Monroe County Judge Jerome Cheslock, approved the city’s first unfunded debt, of $9.85 million, and ordered that this amount be paid back with a dedicated tax millage over 10 years.

The first unfunded debt package translated into the 12 percent tax hike in the proposed budget for next year, city officials have said.

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Scranton City Council Introduces Budget, Takes Flak Over Pay Raises

In a split vote, Scranton City Council on Thursday introduced a $109.7 million budget for 2013 that contains a 12 percent property tax increase for residents and hikes in several other taxes, including a hoped-for commuter tax.

The council also took flak from some residents for hefty raises ranging between 19 and 33 percent in the budget for six employees, including council and administration solicitors, fire chief, business administrator and two administrative employees.

“This city is in such financial disaster. We’re close to bankruptcy and we’re giving raises up as high as 33 percent? It’s just an outrage,” resident Les Spindler told council. “This just cannot happen. You’re not going to raise my taxes and give these other people raises.”

Resident Tom Ungvarsky added, “I hope city council will reconsider and do what’s right by the residents.”

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Pottstown Police Department Versus Scranton Police Department

Editor’s note:  Scranton had a population of 76,089 according to the 2010 census.   The city is 25 square miles.  According to, Scranton had 150 police officers and a department of 170 as of 2010.   The crime rate in Scranton for 2010 was 275.7 (US average is 319.1).

Scranton currently has an acting Chief of Police whose salary is the same as the permanent Chief who stepped down three months ago.  The salary for running a department of 170, in a city of 76,000 people is $81,073.

Pottstown had 22,377 residents according to the 2010 census and is 5 square miles.   Pottstown had a police department of 46 officers (58 total) per’s data for 2010. Pottstown’s crime rate for 2010 was 539 (US average 319.1).  

Pottstown’s Chief of Police/Acting Borough Manager is already making more than $100,000.00 a year.

The cost of living differences being taken into consideration, Scranton is 3 1/2 times the size of Pottstown in population, 5 time as large as Pottstown in area and has a police department 3 times the size of Pottstown’s and yet Scranton’s Chief of Police makes $20,000 less a year than Pottstown’s???  We won’t even get into the difference in the crime rate between the two (HINT: Scranton is safer).

Does this not illustrate why Pottstown’s budget is grossly over inflated?  Does this not indicate paying a new borough manager way more than Jason Bobst was making is fiscal insanity?  

The mayor of Scranton, who is the chief executive and not a ribbon cutter like Pottstown’s Missy Mayor, makes $81,872 (far less than Jason did) and he runs a city 3 1/2 time the size of Pottstown.  And trust me, running Scranton is more challenging than running Pottstown.

Pottstown Borough Council might as well start a bonfire in Smith Plaza, throw the taxpayer’s money in, make a few s’mores and call it a day!

Here is the link to the article about how Scranton is handling their police department: