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.

Read more:  http://thetimes-tribune.com/news/pel-scranton-needs-more-than-12-tax-hike-1.1413187

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.”

Read more:

http://thetimes-tribune.com/news/scranton-city-council-introduces-budget-takes-flak-over-pay-raises-1.1410310

Scranton Mayor Proposes $109 Million Budget For 2013; 12 Percent Tax Hike

Scranton Mayor Chris Doherty presented Thursday to city council a $109.6 million budget that contains a 12 percent real-estate tax hike.

Though formally proposed by the mayor, the budget had been prepared jointly by his administration and the council.  Cooperation between both sides on the budget proposal was a change from the prior two budgets that were marked by heated battles, council revisions, mayoral vetoes and council overrides of vetoes.

Read the Budget HERE

“This is the first step in our financial blueprint as we move the city forward, and I appreciate the cooperation of council,” Mr. Doherty said.

A precursor of the budget had been hashed out earlier this year during the mayor/council war over revising the city’s Act 47 recovery plan, which called for a 12 percent real estate tax hike on city residents and various other tax increases and/or new taxes, such as commuter and amusement taxes.

Read more:

http://thetimes-tribune.com/news/scranton-mayor-proposes-109-million-budget-for-2013-12-percent-tax-hike-1.1404066

Scranton Eyes $20 Million In Borrowing And Second Dedicated Tax Hike For 2013

Scranton City Council on Thursday unanimously introduced a $21 million bond ordinance to fund new debt and an increase in mandatory pension contributions and refinance old debt.

While the introduction was unanimous, council had questions about the bond proposal and agreed to ask administration officials to attend an upcoming caucus to explain it.

Mayor Chris Doherty wanted council to adopt on an emergency basis this legislation and another ordinance for a dedicated tax increase to pay for $9.75 million in unfunded debt, council President Janet Evans said.

However, because council received the ordinances late Wednesday, she said, council and its solicitor, Boyd Hughes, had not had enough time to review them and refused to enact them on an emergency basis – which requires introducing, advancing and adopting them all at the same meeting.

Read more:  http://thetimes-tribune.com/news/scranton-eyes-20-million-in-borrowing-and-second-dedicated-tax-hike-for-2013-1.1401050

Scranton City Council To Introduce Commuter Tax

Scranton City Council will be voting Thursday to introduce a commuter tax, according to a public notice issued today.

A commuter tax – a 1 percent earned-income tax on nonresidents of Scranton who work in the city – is one of the city’s key alternatives to property tax hikes under its revised Act 47 recovery plan adopted Aug. 23.

A 1 percent commuter tax is expected to raise $2.5 million next year and $4 million in 2014 and 2015, city officials have said.

The council ordinance would propose to increase the non-resident earned-income tax from the current 1 percent to 2 percent, while maintaining the earned-income tax of 2.4 percent on city residents, the public notice states.

Read more: http://thetimes-tribune.com/news/scranton-city-council-to-introduce-commuter-tax-1.1384991

Scranton Is A ‘Hot Commodity’ For Downtown Residential Housing

Scranton‘s financial house may be in disorder, but the downtown residential boom continues to build momentum.

More than $11.3 million in three ongoing developments will add 74 apartments to Central City by next summer.

“Scranton is a hot commodity,” said Charlie Jefferson, an investor in the $8.6 million redevelopment of the Scranton Chamber of Commerce Building at Mulberry Street and North Washington Avenue.

Scranton’s municipal government is facing a credit crisis and recently borrowed $6.25 million to cover short-term financial obligations.  City residents could face potential tax increases of 39 to 79 percent – or more – over the next three years.

Read more:  http://thetimes-tribune.com/news/scranton-is-a-hot-commodity-for-downtown-residential-housing-1.1377909

Scranton City Council Threatens University Of Scranton With Zoning Roadblocks

Editor’s note:  This is just irresponsible and shortsighted.  The University of Scranton brings jobs, money and prestige to Scranton; as well as a reason to go downtown.  Scranton City Council needs to get their act together instead of retaliating against a good corporate citizen.

Miffed over the University of Scranton’s recent lawsuit against the city over its new parking tax, city council on Thursday threatened to oppose any zoning variance that the college may need from the city for various improvements, such as dorms or parking lots.

Asked by council President Janet Evans to address this issue, council solicitor Boyd Hughes said he was dismayed that the university sued the city over the parking tax, because over the years the city has facilitated the university’s growth.  Rather, the college should be donating millions of dollars to the city, he said.

The university’s growth since the 1960s stemmed from what was known as the “University Plan” approved many years ago by the Scranton Redevelopment Authority, which involved the SRA condemning properties for university expansion, he said.  But the college has since spread beyond its “institutional district” into residential areas, Mr. Hughes claimed.

The university has received variances from the city zoning board for improvements such as a dorm and parking areas in residential areas that “should have never been granted” by the zoning board.

Read more:  http://thetimes-tribune.com/news/scranton-city-council-threatens-university-of-scranton-with-zoning-roadblocks-1.1376796

University Of Scranton Refuses To Pay New City Parking Tax

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.

Read more: http://thetimes-tribune.com/news/university-of-scranton-refuses-to-pay-new-city-parking-tax-1.1369775

Scranton City Council Targets Parking Garages, Meters

The beleaguered Scranton Parking Authority may have its five parking garages under outside management as soon as today, Scranton City Council announced Thursday.

Meanwhile, council also introduced a proposed ordinance Thursday to terminate on Oct. 8 the city’s parking-meter cooperation agreement with SPA, under which SPA receives 10 percent of meter revenues.

Both actions – one dealing with parking garages and the other dealing with meters – would remove all control of SPA’s two revenue streams from the SPA’s board, which is appointed by Mayor Chris Doherty, according to council President Janet Evans and council solicitor Boyd Hughes.

Regarding outside management, the SPA’s new court-appointed receiver, former Lackawanna County Commissioner Mike Washo, is expected to hire a firm called Central Parking, Mr. Hughes said during council’s meeting. He said Central Parking is the second-largest parking management company in the nation.

Read more: http://thetimes-tribune.com/news/scranton-council-targets-parking-garages-meters-1.1369583

SAPA Plan Included In Scranton’s Updated Recovery Plan

More than two years after Scranton City Council slammed the door on a regional planning initiative, the Pennsylvania Economy League has pushed it wide open.

Tucked inside Scranton’s 60-page updated 2012 Recovery Plan, which council accepted Thursday, is one paragraph suggesting council will reconsider joining the Scranton-Abingtons Planning Association Comprehensive Plan.

“The PEL sneaked it in the recovery plan at the 11th hour, right before our final vote,” Councilman Jack Loscombe said. “I still feel the same way, though. I don’t see how the plan benefits the city economically.”

The plan, which has been adopted by nine municipalities, provides a policy guide for future land use, economic revitalization, open space conservation and historic resource preservation among the SAPA members. Scranton is the last SAPA member, of 11, to consider adopting the comprehensive plan, according to the updated recovery plan.

Read more: http://thetimes-tribune.com/news/sapa-plan-included-in-the-city-s-updated-recovery-plan-1.1364607

Scranton Gets $6.2M Short-Term Loan; State Sets Public Hearing On Plan For Today

Editor’s note:  We are pleased to see that the mayor and council president have put aside their differences and are working together.  It’s making a difference!

Like dominoes falling, Scranton has finally adopted a revised recovery plan, and because of that the city now will receive a $2.2 million state aid package and a $6.25 million short-term bank loan that will allow the city to pay bills and payrolls while continuing to seek long-term borrowing to fund its 2012 budget.

The flurry of separate, yet related, developments has bought the city some time to resolve its short-term financial crisis, however the city still needs to secure other borrowing to end the year in black, Mayor Chris Doherty and council President Janet Evans said.

The stage was set with the city’s proposed revised recovery plan having received approval in recent days from its Act 47 recovery coordinator, Pennsylvania Economy League.  That approval will allow the city to receive the $2.2 million state aid package from PEL’s overseer, the state Department of Community and Economic Development.  With PEL and DCED on board with the city’s recovery plan and the state aid package on the way, the city was able to secure on Wednesday night a $6.25 million tax- anticipation note from Amalgamated Bank of New York and Washington, D.C., the mayor and Mrs. Evans announced late Thursday afternoon in front of City Hall, shortly before the council meeting.

“This buys us time,” Mr. Doherty said of the bank loan and state aid package.  “With the recovery plan being passed, it sends a positive message for our future borrowing.”

Read more: http://thetimes-tribune.com/news/city-gets-6-2m-short-term-loan-state-sets-public-hearing-on-plan-for-today-1.1363190

Scranton City Council Holds Hearing On Recovery Plan

In a first in several years, Scranton Mayor Chris Doherty on Thursday attended a city council meeting that was a public hearing on their joint revised recovery plan.

The mayor – who usually bears the brunt of a barrage of negative comments and criticism from council and some regular attendees at weekly council meetings – had not attended a council session in about six years, council President Janet Evans said.

However, the city’s financial crisis has finally made for some strange bedfellows between the mayor and council majority, who usually are mortal political enemies. After months of a bitter mayor/council stalemate over revising the city’s Act 47 recovery plan that would be acceptable to banks and the city’s recovery coordinator, Pennsylvania Economy League, the mayor and Mrs. Evans reached an accord July 27. As a result, she said she asked the mayor to attend the hearing, and he agreed.

“It was a milestone,” Mrs. Evans said of the mayor’s appearance. “We’re very pleased to be working with him.”

Read more: http://thetimes-tribune.com/news/scranton-city-council-holds-hearing-on-recovery-plan-1.1360066

Scranton City Council Sets Public Hearing On Recovery Plan

English: Downtown , USA

English: Downtown , USA (Photo credit: Wikipedia)

Scranton City Council on Thursday tabled a revised recovery plan but set a public hearing on the proposal for next week and a vote for adoption for the following week.

Council President Janet Evans said efforts are under way to further revise the consensus recovery plan.  It was reached July 27 by her and Mayor Chris Doherty after months of stalemate, but raised concerns from the city’s Act 47 recovery coordinator, Pennsylvania Economy League, that much of its revenue was speculative.

“There are adjustments being made to it, and it’s ongoing,” Mrs. Evans said.  “I’m hoping that all changes are complete prior to the public hearing.”

At the Aug. 2 meeting, Mrs. Evans said the mayor/council consensus plan was a “take it-or-leave it” proposition for PEL.  Asked after the meeting if she had backed away from that stance, Mrs. Evans said no.

Read more: http://thetimes-tribune.com/news/scranton-council-sets-public-hearing-on-recovery-plan-1.1357001

Blue Cross Sues Scranton After City Defaults On $2 Million Note

Blue Cross of Northeastern Pennsylvania filed a lawsuit Wednesday against Scranton seeking $2.05 million owed by the city in a promissory note from last fall.

The city executed a note on Oct. 27 promising to pay Blue Cross $2 million in unpaid bills by Jan. 5, the lawsuit states. But the city failed to pay and that constituted a default, the lawsuit states.

As of Wednesday, no payment had yet been made and the lawsuit seeks the principal amount of $2 million as well as 5 percent interest that accrued to $58,904 from Jan. 6 to Wednesday, for a total amount sought of $2,058,904, according to the complaint.

Blue Cross has been one of the city’s largest vendors with bills that have gone unpaid under the city’s financial crisis. As such, the lawsuit was not necessarily unexpected, said Mayor Chris Doherty, adding that he is in contact regularly with Blue Cross about the situation and the firm is continuing to provide health care coverage for the city’s employees.

Read more: http://thetimes-tribune.com/news/blue-cross-sues-scranton-after-city-defaults-on-2-million-note-1.1356343

State Extends Deadline For Scranton Recovery Plan After PEL Raises Concerns

Hours after receiving a “rejection” of its revised recovery plan by a state-appointed recovery coordinator, Scranton City Council on Thursday forged ahead with introducing the plan anyway.

The council voted 3-1 to introduce an ordinance to implement the revised plan that was agreed upon last Friday by Mayor Chris Doherty, council President Janet Evans and council finance chairman Frank Joyce.

The plan then was sent for review to the city’s Act 47 recovery coordinator, Pennsylvania Economy League, which also would have to OK the plan before it would take effect.

On Thursday, shortly before the council’s meeting, PEL issued a letter to the city detailing numerous concerns about the recovery plan, chiefly that much of its revenue sources that are alternatives to real estate taxes – such as a commuter tax and sales taxes and significantly increased voluntary donations from nonprofits – are not guaranteed to occur. PEL wants to the city to identify backup revenues sources should speculative revenue sources never materialize.

Read more: http://thetimes-tribune.com/news/state-extends-deadline-for-scranton-recovery-plan-after-pel-raises-concerns-1.1353735

Scranton Commuter Tax Eyed In Compromise Plan

Map of Pennsylvania highlighting Lackawanna County

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

Just when Colleen Rhue thought she was out, Scranton is trying to pull her back in.

The downtown office worker recently moved to Moosic to escape the city’s 3.4 percent wage tax on residents.

“Now it looks like the money I saved from moving, they want to take from me,” Ms. Rhue said Tuesday, reacting to a possible 1 percent commuter tax included in the city’s latest recovery plan proposal.

While the tax will be decided through the courts, support for the levy seems strong among city residents, who pay for police and fire protection and infrastructure.  Support drops off at the city limits.

Read more:  http://thetimes-tribune.com/news/commuter-tax-eyed-in-compromise-plan-1.1353047

Scranton Mayor Cuts City Workers’ Pay To Minimum Wage

A fiscal and political crisis in the nearly-broke northeastern Pennsylvania city of Scranton deepened Tuesday as public employee unions sought to have the mayor held in contempt of court after he defied a judge and slashed workers’ pay to minimum wage.

Unions representing firefighters, police and public-works employees also filed a pair of federal lawsuits against Mayor Chris Doherty and the city that alleged violations of labor law and due-process rights.

Doherty last week ignored a court order and cut the pay of about 400 city workers to the federal minimum wage of $7.25 per hour. The Democratic mayor said it was all the cash-strapped city of more than 76,000 could afford, promising to restore full pay once finances are stabilized.

“It’s incredible,” the unions’ attorney, Thomas Jennings, said Tuesday. “I’ve never had a public official just say, `I’m not going to obey a court order. I’m not even going to try. He can’t tell me what to do.'”

Read more: http://readingeagle.com/article.aspx?id=398160

Scranton Mayor’s Lawsuit Hearing Not Set Until August 3rd

SCRANTON, PA – The Lackawanna County Court set a hearing date more than a month away on Mayor Chris Doherty’s lawsuit to get his financial recovery plan implemented, effectively increasing pressure on the mayor and city council to resolve the issue through negotiations.

The Aug. 3 court date allows council solicitor Boyd Hughes the legally required time to respond to the city’s lawsuit, a court official said. The suit asks the court to order the mayor’s recovery plan implemented or to order a council vote on it.

But with the city running out of money, facing increasingly impatient creditors and the mayor unilaterally slashing 398 employees’ pay to the federal minimum wage of $7.25 an hour to save money, the far-off court hearing date at least temporarily dashed hopes for a quick resolution.

“It can’t wait until August,” city Councilman Bob McGoff said by telephone after the hearing. “I think what it means is that the mayor and the council president need to get together before Aug. 3.”

Read more: http://thetimes-tribune.com/news/doherty-lawsuit-hearing-not-set-until-aug-3-1.1336275

Scranton City Council Reverses Course On Parking Bond Money

In a stunning about-face, Scranton City Council on Thursday voted to introduce a measure to cover a debt of the Scranton Parking Authority, only a week after refusing to do so and plunging it into default.

But it would appear to be only a temporary fix, as council solicitor Boyd Hughes cited a June 7 notice of default from bond trustee Bank of New York Mellon saying a takeover of the beleaguered authority is inevitable in 30 days because SPA has preliminarily defaulted on four other counts, including:

- Failing to submit to the trustee an independent audit.

- Failing to submit to the trustee an annual budget of facilities prepared by a consulting engineer.

- Failing to keep financial records separate from city records and have them certified in an annual audit by city Controller Roseann Novembrino.

- Failing to have an engineer perform an annual review of physical status of facilities.

Read more: http://thetimes-tribune.com/news/scranton-city-council-reverses-course-on-parking-bond-money-1.1326619

Bank Yanks Loan Offer To Scranton After City Council Allows Parking Authority To Default

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.

Read more: http://thetimes-tribune.com/news/bank-yanks-loan-offer-to-scranton-after-council-allows-parking-authority-to-default-1.1324183