WILKES-BARRE – City Council on Thursday night approved borrowing $3 million in the form of a tax anticipation note to provide the city funding next year to cover expenses while it awaits revenue payments.
The 4-0 vote was held at a special session and had no opposition from the half dozen people in attendance.
However, there were complaints about the city applying for nearly $6 million in local share gambling funds to pay for the purchase of new police cruisers and rehabilitation of the Irem Temple building on North Franklin Street, among other projects.
Council members Bill Barrett, George Brown, Maureen Lavelle and Mike Merritt approved the TAN and the applications for funds. Councilman Tony George was excused from the 5:30 p.m. meeting.
The city accepted the proposal by PNC Bank to provide the TAN at 1.88 percent interest with a maturity date of Dec. 31, 2013.
The bank agreed to fund the note on several conditions, including the repayment of all outstanding tax and revenue anticipation notes for 2012.
Still outstanding is the $3 million TAN the city took out earlier this year. Drew McLaughlin, administrative coordinator for the city, said the city will pay it in full before year's end.
The city has been struggling to close out the year without a deficit due to lower than projected revenues and a delay in payment of earned income tax caused by a problem with CENTAX, the company formerly contracted by Luzerne County to collect and distribute the money to municipalities. The county has contracted with another company to handle the EIT.
The city received approximately $600,000 in EIT revenue from the third and fourth quarters, and that will allow it to make payroll today, McLaughlin said.
It is still owed approximately $1 million from the first and second quarters and likely will receive that money next year, he said.
The shortfall resulted in the layoffs of 11 firefighters, four Department of Public Works employees and voluntary furloughs and retirements of employees in other departments. The cuts could be extended into next year if city employees don't agree to concessions in order to reduce the 30-mill property tax increase contained in Mayor Tom Leighton's proposed $45.8 million balanced budget.
Council has until the end of the year to adopt a budget and has not yet set a date for a public meeting. If it fails to act, the mayor's budget will go into effect, according to the city charter.
Separate from taking out the TAN to pay for expenses, the city agreed to apply to the Commonwealth Financing Authority for a portion of gambling revenue the Mohegan Sun at Pocono Downs casino in Plains Township turns over to the state for use in various economic development and public safety projects. The host municipality for the project requests the funding and passes it through to the organization behind the project as work is completed.
In some cases the municipality requests funding for projects, such as the city asking for $100,000 to buy four new police cruisers, $1.1 million to renovate the track and football areas at Kirby Park and $225,000 for the façade improvement program for homeowners in selected areas.
The $40,000 the city is seeking for the Building Bridges project drew the attention of Frank Sorick, a member of the Wilkes-Barre Crime Watch Coalition. The project grew out of the April shooting death of 14-year-old Tyler Winstead and aims to address youth violence.
The city receives federal funding to for a crime prevention officer, yet that officer rarely comes to any of the 13 monthly crime watch meetings, Sorick said.
He said he found the application for Building Bridges highly offensive to the 400 members patrolling city streets and acting as a liaison between the police department and the city.
We're getting absolutely no support from the city, and yet we want to give $40,000 to a new organization for their happy, happy, feel-good meetings, he said.
Council members Barrett, Brown and Merritt supported Sorick in his request for the officer to attend the crime watch meetings. It's a vehicle for us to highlight the problematic areas in the districts, Brown said.
City Administrator Marie McCormick said the officer, Phil Myers, is in the neighborhoods and schools every day. That's his community effort, she said.
But Merritt asked her to make a request to the mayor to have the officer attend the meetings.
All 13? she asked.
Yes, Merritt replied.