W-B refinances to save money
Last Modified: February 18. 2013 2:04PM
WILKES-BARRE – As bad as the city’s finances are, it’s able to refinance million of dollars in bonds at a considerable savings to the taxpayers, the mayor said.
At its regularly scheduled meeting Thursday night, council approved issuing $10 million in bonds, with most of it at a lower rate than originally obtained three years ago.
“I’ve said over and over, we still have serious financial problems,” Mayor Tom Leighton said. “However, we’re doing the right thing in the eyes of those who give us the credit rating.”
The A-rating from Standard & Poor’s Rating Services allows the city to borrow at lower rates compared to municipalities lacking a rating. S&P downgraded the city’s rating from A in November based on concerns of a revenue shortfall and its effect on paying a $3 million tax anticipation note at year’s end. The city paid the note and took out another $3 million note this year.
The bond package includes $1.3 million to complete a more than $6 million bond issue for an energy savings program with Johnson Controls.
The city reached its borrowing cap last year when it issued $5 million in bonds for the program.
The remaining $8.6 million portion of the package deals with bonds issued in 2010. The city was able to obtain a lower interest at 2.02 percent. It had been paying 3.75 percent interest.
By refinancing at the lower rate, the city saved $424,000, the mayor said. That’s on top of the $227,000 in savings when the bonds were refinanced in 2010, he added.
Council also took the first step to amend a pension plan for non-uniformed employees. It passed the first reading on an ordinance to correct a provision regarding vesting for employees in third-class cities. Employees hired after Jan. 24, 2001 will be vested after 12 years of service. It previously allowed for vesting after 10 years.
Marie McCormick, city administrator, said employees of Laborers’ International Union of North America Local 1310 accepted the compliance issue and already included it in its collective bargaining agreement with the city.
The ordinance will go into effect after a second reading and vote by council.
City resident Frank Sorick questioned how council could vote on the pension issue, citing its previous vote on eliminating pensions for council members.
Councilman George Brown said he has been in contact with state Sen. John Yudichak, D-Plymouth Township, about passing legislation that would give council the ability to control its participation in not only pensions but also health-care plans provided through municipalities.
Yudichak is a member of the newly formed caucus for third-class municipalities, Brown said.
Council Chairman Bill Barrett said he thought council has that authority. But he added, “because the law is written right now, it’s not that easy to do.”
Aside from finances and pensions, council approved the transfer of liquor license to Southside Bistro LLC from Tee Shots LLC in Exeter Township.
Southside Bistro, a French restaurant, is expected to open within a few months in the former bank building on the corner of West Ross and South Main streets.