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.
The University of Scranton is suing the city over a new tax city officials enacted this year on parking garages and parking lots and is refusing to pay it until a judge weighs in.
The university filed suit in Lackawanna County Court on Friday, asking a judge to declare the university – a nonprofit – exempt from the city’s 15 percent tax on parking facilities where patrons pay to park.
City officials have said the tax is critical to bringing in more revenue for the financially distressed city. Council’s 2012 budget estimates the tax will bring in $500,000.
If a judge ruled in the university’s favor, city Business Administrator Ryan McGowan said the city would lose out on a “substantial amount” of revenue from the tax. He could not immediately provide specific numbers when contacted about the suit Friday afternoon.
The effect of Scranton City Council allowing the Scranton Parking Authority to default on a debt was immediate on Friday, officials said.
The bank that the city had been hoping to get financing from to be able to keep the city afloat this year, M&T Bank, backed out first thing Friday morning because of the default, said Mayor Chris Doherty and city Business Administrator Ryan McGowan.
On Thursday night, council voted against covering a $940,000 SPA debt that was due Friday, thus allowing the authority to default even though the city had backed the debt.
“The city defaulted on the guarantee. This default has left us with nowhere to go,” Mr. McGowan said of the city’s hopes for getting loans.