WILKES-BARRE — Four months after the administration put long-term debt restructuring on the table, it was still there and city Administrator Ted Wampole pushed hard for that option Tuesday.
At city council’s work session, Wampole made clear it was preferred over the short-term debt deal that’s also an option. Both are on the agenda for council’s public meeting Thursday.
The city needs cash to be able to pay its bills next year and the route mapped out by the city’s financial adviser is designed to steer it clear of Act 47 and the tight financial controls that would be imposed with the designation of distressed status by the state.
“We need the stability. We also need the stability to go out and start working on the Solomon Creek project,” Wampole said.
The long-term restructuring will level out the annual payments and improve the cash flow, he said, reiterating points he made previously. The short-term plan would offer two years of help, but hamper the city’s efforts to replace damaged sections of the creek wall and force it into a cycle of restructuring, Wampole argued.
Council wouldn’t show its full hand on which of the ordinances it might approve.
Councilman Mike Merritt expressed concerns about continuing union contracts that guarantee health care for life and the parity pay clause between the firefighters and police.
“This will give us some room to go ahead and play with,” Merritt said, “but we could be in the same spot in another couple years.”
“Personally, from my standpoint, obviously to do nothing I would think is being irresponsible,” said councilman Tony Brooks. He added he felt comfortable with Wampole’s assurance that the city would develop a five-year financial plan as if it was under Act 47 constraints.
“Ted, is the mayor going to stick to the five-year plan?” asked councilman Mike Belusko. Wampole replied that Mayor Tony George would.
Council chairwoman Beth Gilbert questioned Wampole about whether there is a back-up plan for Solomon Creek if neither debt plan passes.
“I don’t see us being able to afford that,” Wampole said.
He explained that even though the city received a $500,000 grant from the state for the project, the administration would be reluctant to proceed if it could not pay for it in full.
The city estimated the wall replacement would cost $5.5 million. There would be money for the project under the long-term plan that has maximum limits of $52 million in principal and $59.7 million in interest. The short-term plan has maximum parameters of $12 million in principal and $12.5 million in interest. Both are new ordinances with different costs due to council’s delay on approving a plan.
“This is not an easy decision,” Wampole said.
Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.comments powered by Disqus