Luzerne County council

November 2

County borrowing plan approved

By Christopher J. Hughes chughes@golackawanna.com
Go Lackawanna Editor

SCRANTON – A visiting senior judge ruled Wednesday that Lackawanna County can borrow up to $21 million to cover its unfunded debt through the end of 2011.

In his findings of fact filed Oct. 26, visiting Senior Judge Peter J. O’Brien wrote that “in government, as in life, hindsight is always 20/20 but reality provides surprises to one and all. The County of Lackawanna has plenty of company in government bodies surprised by the current economic climate in the country.”

The plan to borrow up to $21 million was suggested in September by a financial advisory board, and an evidentiary hearing was held Oct. 19.

During that hearing, Lackawanna County Chief Financial Officer Tom Durkin warned that the county’s inability to borrow the money would result in payless paydays and that defaults on tax anticipation note payments would negatively impact the county’s finances.

“Curtail of public services would be dangerous to the public health, safety and education,” and it “is not feasible nor in the public interest to levy additional taxes in the current fiscal year,” O’Brien wrote.

Durkin said shortfalls were caused by losses including but not limited to the loss of federal inmates in the Lackawanna County Prison for which the federal government was expected to pay more than $3 million and a SWAP termination intended to fix a variable interest rate on a bond issue that cost the county another $10 million.

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