County to borrow $93.5 million

Luzerne County Democratic majority Commissioners Greg Skrepenak and Rose Tucker voted to borrow up to $93.5 million during Wednesday’s commissioner meeting to fund capital projects and the county’s 2007 deficit.

Up to $19.87 million will be used to fund the 2007 deficit. Skrepenak and county Budget/Finance Chief Sam Diaz both estimated the deficit will end up between $13 million and $14 million.

Another $26.76 million will be earmarked for expansions at Luzerne County Community College, though the state will cover half of the repayment, Diaz said.

The remaining $46.9 million will be spent on capital projects, Diaz said. The county purposefully omitted a specific breakdown of projects that will be covered because the roster may change, he said.

He expects roughly $10 million will be spent restoring the courthouse in time for the structure’s 100th anniversary in 2009, Diaz said.

Computerization, public safety projects, vehicles and local economic development initiatives may also be funded with the $46.9 million, Diaz said.

Roughly $2.5 million is earmarked for further design of a proposed county prison, but the bond won’t be spent on any prison land purchases or construction, Diaz said.

That means the county would have to borrow another estimated $100 million through a different bond to fund a prison, county officials say.

With the bonds approved Wednesday, the county will owe $225 million in bond principal, Diaz said. The state will allow the county to borrow up to $359 million in principal, he said.

All three bond issues must be repaid within 20 years. The interest rate will be fixed, but the amount won’t be known until the transaction is finalized on Thursday, Diaz said.

Minority Commissioner Stephen A. Urban said he supports the Luzerne County Community College expansion but not the rest of the package. He said county officials hid the deficit because Skrepenak was seeking re-election, and he predicted that taxes will be raised the year after reassessment to cover the increased load.

Urban also questioned why the bond plan was not mentioned during Friday’s commissioner work session, even though it was publicized in a newspaper legal ad on Saturday.

Diaz said the “deal was still being put together on Friday,” and he did not receive confirmation that the county had secured insurance until Friday afternoon. The legal ad was a necessary formality.

Urban criticized Diaz for failing to publicly disclose the extent of the county’s deficit months ago.

Urban said Diaz ignored his request for a budget update, and accused Diaz of being “sassy” and “insubordinate.” Diaz said he did not believe he was sassy.

The county’s ability to secure insurance through Financial Security Assurance in a competitive and highly scrutinized municipal market is a “feather in the administration’s cap,” Diaz said.

Interest rates will be lower because of the insurance, which guarantees payment if the county defaults, Diaz said.

“They do not see gloom and doom in Luzerne County. If they did, they would not have insured this debt issuance,” Diaz said.

Skrepenak and Tucker also voted to hire several companies to handle the bond: Stevens & Lee, bond counsel; PNC Capital Markets and RBC Capital Markets, underwriter; Community Bank & Trust, Fidelity Deposit and Discount Bank and MT&T Banks as paying agents/trustees.

Skrepenak and former commissioner Todd Vonderheid borrowed $17 million in 2004 and $12.5 million in 2005 to fund deficits. In 2006, faced with a $9.2 million deficit, Skrepenak and Vonderheid restructured debt to obtain $12.3 million in exchange for higher debt repayments down the road.

In other business

• Commissioner Stephen A. Urban said he will seek the resignation of county Public Information Officer Kathy Bozinski in January because he believes she spends too much time promoting Commissioner Greg Skrepenak.

Bozinski said she issues releases and sets up press conferences when she is asked to do so by any commissioner.

Urban opposed the spending of bond money to cover reassessment expenses, saying he believes the law required those expenses to come out of a different bond because they would have been repaid within 10 years. County Solicitor Jim Blaum said he sees no problem with the expenditure.

Several employees were hired: Carol Wajda, Kingston Township, community development environmental specialist, $28,000; Salvatore Mantione Jr., Wilkes-Barre, commissioners’ office executive assistant, $27,500; Christopher J. Belleman, Kingston, assistant county engineer, $56,000; Melvin Morris, Dallas, civil engineer, $40,000; and Anne Marie Janus, Larksville, public defender clerk/receptionist, $19,500.