Saturday, July 12, 2014

Tax-short borough goes out for loan

February 19. 2013 6:48PM
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WILKES-BARRE – Despite small payments coming in from the county's now-defunct Centax-Don Wilkinson Agency, the borough of Edwardsville is now seeking a loan from a local bank to ensure bills are paid through December.

Edwardsville is among municipalities in Luzerne County and the state that have been struggling to pay bills because earned income taxes collected by Centax in 2012 have not been distributed.

This week, Edwardsville filed papers in Luzerne County Court asking a judge to approve a $125,000 general obligation note from the First Liberty Bank in Wilkes-Barre.

State law requires the borough seek court approval before securing the note.

I anticipated in September that (we were going to come up short), said Edwardsville Borough Manager Charles Szalkowski. I wanted to get a commitment letter from the bank for the money as a precaution, and it's a good thing we did.

Szalkowski said money from the earned income tax owed to Edwardsville is coming in slowly, but we're going to run short without (the bank loan). A miracle could happen and we can get the money (from Centax) but I'd rather be safe than sorry.

Szalkowski said the $125,000 note will be used for bills payable in December and the final payrolls of the year.

Szalkowski said the borough is not considering any layoffs.

Not paying the unfunded obligations of the borough of Edwardsville will result in curtailing municipal and police services and will be dangerous to the public health and safety, attorney Charles Shaffer said in the court filing. It is not feasible or in the public interest to levy additional taxes in the current fiscal year.

Shaffer, whose law partner attorney Bill Finnegan serves as solicitor for Edwardsville, said once Centax begins making payments to Edwardsville, the borough can then repay the bank note.

Luzerne County Judge Michael Vough scheduled a hearing for Monday to consider allowing Edwardsville to obtain the money.

Centax sold its accounts to Berkheimer & Associates in August, but Berkheimer has been hampered in resolving tax issues because all Centax records and accounts were recently frozen as part of a lawsuit filed in Allegheny County Court by the borough of Green Tree, according to The Times Leader archives.

Berkheimer has been around a long time and has the capabilities and manpower to get the job done, Szalkowski said. We are starting to get (some) money, so we are confident.

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