WILKES-BARRE — City council Thursday night bought the sales pitch made by the administration for a long-term debt restructuring deal that includes funds to replace sections of Solomon Creek wall.
By a 3-2 vote, council approved the first of two readings of an ordinance that will increase the city’s $86.2 million debt load by $37 million over the next 21 years.
But under the plan, the city’s annual payments will be much more manageable and allow for greater cash flow for day-to-day operations.
The ordinance will come up for a second and final reading at council’s May 11 public meeting.
City Administrator Ted Wampole acknowledged he was not sure when the bonds would be issued and estimated that could take place sometime in the summer.
Wampole lobbied council before the vote and reemphasized points he’s made for months that the deal proposed by PFM Financial Advisors LLC would make the debt service affordable and allow the city to maintain better control of its finances by taking steps to avoid state-imposed restrictions under Act 47 distressed status.
“Make no mistake, this was not and is not an easy decision. Make no mistake about that. It is a decision that is supported as well as it is criticized,” Wampole said.
He found a reluctant supporter in city controller Darren Snyder, who raised concerns about the added debt during prior meetings.
“As much as it pains me to endorse our financial adviser’s recommendation of a long-term debt restructuring for our city, I believe it is the best option for stability,” said Snyder, who did not have a vote on the ordinance.
Council has gone back and forth since January on the restructuring. It tabled a vote on a long-term deal and approved the first reading of a short-term deal in February. The delay in approving either one forced the administration to start over with updated figures. New versions of both packages were on the table Thursday night.
Councilman Bill Barrett, Mike Belusko and vice chairman Tony Brooks cast votes in favor of the long-term deal. Council chairwoman Beth Gilbert and councilman Mike Merritt opposed it.
Merritt again put the administration on notice that it has to gain concessions from the city’s unions during contract negotiations and make other changes, such as eliminating lifetime health care for retirees. “We got to let them know how serious this is,” he said.
Merritt also warned the administration about getting complacent once the deal goes through.
Gilbert explained her opposition by saying before the city turns to refinancing, the administration should make sure it looked at all options to raise revenues and cut expenses.
“And just to clarify, down the road if I felt comfortable that all these things were being explored, I wouldn’t be opposed to refinancing,” Gilbert said. She added she only supports a deal that funds the wall replacement.
Wall-project cost drops
The cost for the Solomon Creek project has dropped by more than $2 million from its first estimate of $6.5 million.
Before a section of the wall collapsed in December, the original plan was to narrow the channel and acquire some properties, said Joyce Morrash Zaykowski, the city’s capital projects program manager. That’s no longer the case, she said. And as a result of the collapse, the city determined where it has to relocate utility lines under Brook Street and that reduced the cost further, she noted.
The latest cost estimate of $4.4 million includes a $500,000 state grant. However, it doesn’t include an estimated $250,000 in engineering costs, Wampole said.
Apart from the restructuring, the city’s decision to scale back summer hiring and not open the indoor pool at Kistler Elementary School drew mixed comments from residents. Some supported the move, saying police were called to the pool numerous times. Others said closing the pool due to the behavior of a bad kid was short-sighted and punished those who didn’t cause problems. They suggested assigning an officer to the pool and looking for outside support or volunteers to help.
Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.