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By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
Jennifer Learn-Andes on Facebook   |   @TLJenLearnAndes on Twitter

Luzerne County is facing a projected $10 million year-end deficit because last year’s budget contained some unrealistic revenue projections, county officials said Tuesday.

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That’s after the budget was infused with about $18 million from the bond that had been challenged by former Wilkes-Barre activist Tim Grier.

County commissioners plan to vote today to investigate debt restructuring and a back-tax collection program, though they don’t know if that will be enough.

Commissioner Chairwoman Maryanne Petrilla, who took office after the budget was implemented, said Tuesday she believes the budget was “padded to reflect revenue we’re not going to see.”

“Certainly it’s problematic. We have to dig in our heels and see what we can do,” she said.

Petrilla said the county will be in the same boat next year unless new revenue streams materialize. The county can’t continue to rely on bonds to cover operating expenses, she said. By then, the county may be “refinanced out to the max,” she said.

The budget, approved by Commissioner Greg Skrepenak and former Commissioner Rose Tucker, contained an $8.5 million deficit that county officials hoped to plug with debt restructuring.

The budget also relied heavily on the sale of county-owned land and increased collection of back taxes. Layoffs were discussed around the time the budget was implemented in December, but never enacted. Minority Commissioner Stephen A. Urban had called the budget “one massive shell game.”

Thomas Pribula, who replaced Sam Diaz as county budget/finance chief earlier this year, said the county has not come close to the $6.5 million budgeted from land sales, prompting him to question why such a high amount was projected. The county also has not realized the budgeted $6 million from prior-year real estate tax collection, he said.

Commissioners plan to vote today to hire Public Financial Management Inc., known as PFM Group, to advise the county on possible debt restructuring.

Commissioners also plan to vote today to publicly seek proposals from entities interested in “buying” tax claim debt.

In this plan, known as “monetizing,” interested firms figure out what they’d expect to recover and then offer the county an up-front payment for that back tax portfolio. When property owners pay, the full amount is then turned over to the firm that buys the portfolio, giving the firm a profit.

If property owners don’t pay, the company eats the loss.

Though the chosen entity takes the risk, the county’s tax claim office is still responsible for collecting the money and pushing property owners to pay.

Pribula believes the county will receive offers of around 90 cents for each dollar owed.

Pugh resigns

Luzerne County Public Safety Director Alan Pugh has resigned, according to an e-mail sent to employees Tuesday.

His resignation is expected to be accepted at today’s commissioner meeting. Pugh earns $80,000.