December 20, 2012
WILKES-BARRE – The city has yet to pay back the $3 million tax anticipation note for this year and is about to take out another one for 2013.
City Council scheduled a special meeting for 5:30 p.m. today to vote on another $3 million TAN to cover expenses until revenues start coming in.
The vote is routine and done annually, according to Drew McLaughlin, the city's administrative coordinator.
The still outstanding note will be taken care of as well, he added.
The TAN will be paid on time and in full, he said Wednesday.
The city borrowed $3 million from PNC Bank at 2.2 percent interest at the start of this year.
The note usually has been paid back by the end of October, but this year it was extended until Dec. 31 because of the difficulty obtaining earned income tax payments from CENTAX, the company formerly contracted by Luzerne County to collect and distribute them.
The delay in receiving the EIT payments and the shortfall in other projected revenues sent the city scrambling for ways to plug an estimated $2 million shortfall in funds. It laid off 11 firefighters and four Public Works employees at the beginning of the month, in addition to accepting the voluntary furloughs of two other employees and the retirements of 12 workers.
The budget problems also caught the attention of Standard & Poor's Rating Services.
S&P downgraded the city's credit rating to A-minus from A and placed it on CreditWatch with negative implications.
The ratings service has been monitoring the city's financial struggles and has been paying particular attention to the 2012 TAN payment.
In explaining the downgrade, S&P on Nov. 16 said: If the city, in our opinion, will be unable to generate the cash necessary to repay the TAN at maturity, then the rating could be lowered again, but if actions are taken such that sufficient cash will be on hand prior to TAN maturity, the rating could be removed from CreditWatch.
The watch remains in effect for 90 days from the downgrade.
In addition to paying back the TAN, the city will make payroll for the Dec. 21 pay period, the last of the year.
The possibility of a payless payday existed because of the revenue shortfall. The city had to determine by midweek if it there was enough money on hand to make payroll that averaged between $550,000 and $600,000.
Still to be determined is the 2013 budget. Mayor Tom Leighton proposed a $45.8 million balanced budget for council's approval.
A sticking point has been the 30-mill property tax increase, which amounts to a 31 percent hike.
Leighton asked for concessions from the city's unionized workers to reduce the tax hike and warned of layoffs if the millage rate was not reduced.
Council has until the end of the year to approve a budget. If it fails to act by then, the mayor's proposed budget goes into effect, according to the city charter.
The Wilkes-Barre Zoning Hearing Board Wednesday approved two applications:
• The board granted the request of April Campas and Joshua Mason to convert a former grocery store/delicatessen at 285 Old River Road to a personal beauty salon and fitness studio. The new businesses are expected to open late next month.
• The board also gave the go-ahead for Miller's Surplus Home Improvement retail business to open in the building located at 81-83 Waller St. The store, which relocated from leased space on state Route 315 in Plains Township, opens at 9 a.m. today.
The city will request more than $5.8 million in local share gambling funds for public safety and economic development projects.
Applications for the seven projects must be submitted to the Commonwealth Financing Authority by the end of the year and the funds are expected to be awarded in March.
In four of the projects the city is acting as the pass-through agency for other applicants. In three cases, the city is seeking the funds on its own, said Drew McLaughlin, administrative coordinator.
The city projects are:
• $1.1 million for renovation of the track and field at Kirby Park.
• $225,000 for Phase II of the façade improvement.
• $100,000 to $120,000 for four police cruisers.
The pass-through projects:
• $2.4 million for the rehabilitation of the Irem Temple building on North Franklin Street; the Greater Wilkes-Barre Chamber of Business and Industry is the applicant for the multiyear project.
• $1.5 million for King's College Solar & Sustainability Project; King's is the applicant for making student housing, the Scandlon Gym and annex energy efficient.
• $420,000 for Vitrius Technologies Research and Development Project; Vitrius Technologies LLC, located in the chamber's incubator on South Main Street, is seeking the funding for its patented technology that produces heat and electric power from a metal-clad window system.
• $40,000 for Building Bridges for operational and startup costs; the nonprofit organization grew out of the city-wide initiative created this year after the accidental shooting death of 14-year-old Tyler Winstead to address youth violence.