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Increasing taxes by at least 1 mill and cutting 150 jobs among advice by consultant.
Luzerne County’s outstanding debt has skyrocketed to $466 million, with repayments stretched to 2027, according to a thick financial recovery plan released Wednesday.
“The county has frequently relied on debt issuance to cover operating needs, resulting in a debt burden more than three times the annual budget,” said the report by consultant Public Financial Management (PFM).
The county faces a $30 million deficit in 2010, and commissioners have vowed to end years of reliance on borrowing and refinancing to fill the void.
But the county is already feeling the pain of all this borrowing.
The county refinanced this year to get repayments down to $9.5 million, but the bill will jump to $25 million next year and hold steady, the report said.
The problem: Revenue is expected to be stagnant in coming years because of economic and demographic trends, the report said.
PFM, which was hired because the county is in financial distress, has proposed extreme measures ranging from the elimination of 150 workers to a 29 percent property-tax hike.
Commissioners are reviewing the options. Approval of the proposed 2010 county budget is set for Nov. 25. Public hearings are scheduled for Monday and Tuesday, and county officials plan to grill department heads who are seeking any spending increases.
PFM proposed three general options:
• Raise taxes to 5.85 mills in 2010 without borrowing or major staff cuts.
• Continue borrowing at “lower levels” to phase in a property-tax increase without staff cuts. Taxes would then have to be increased to 5.95 mills by 2013.
• Eliminate 150 positions and raise taxes to 5.5 mills in 2010.
County taxes are currently 4.5347 mills. A mill is a $1 tax for every $1,000 in assessed property value.
At the current rate, county taxes are $680 on a property worth $150,000. Taxes would increase to $825 at 5.5 mills, to $877 at 5.85 mills and to $892 at 5.95 mills.
Much of the 231-page report focuses on suggested cuts in specific departments.
The proposed temporary closure of Moon Lake Park is likely to draw opposition from regular users of the 648-acre Plymouth Township facility.
PFM advises closing the park until a funding source is identified or transferring the facility to a yet-to-be-created nonprofit organization.
Park closure would save $873,000 through 2013, the report says. Commissioners would have to lay off staff, mothball the facilities and disconnect utilities, it says.
“Given current and projected financial constraints, the county cannot continue to provide all services that it has in the past,” PFM said.
The study suggests transferring the county’s Environmental Special Projects and Solid Waste Management divisions to the Luzerne Conservation District, which is run by an independent board appointed by commissioners.
Transferring transportation department services to the private sector or other government-related transportation entities was also proposed. The transportation department, operated jointly with Wyoming County, runs vans that provide transportation for the elderly and people with physical and mental disabilities. About 1,400 bus runs are provided daily.
The county should also seek more payments in lieu of taxes from larger tax-exempt organizations, such as universities, colleges and medical facilities, the report said.
The county received $550,796 in such payments in 2008, including $300,000 from the Mohegan Sun at Pocono Downs.
Unpaid furloughs, salary and longevity bonus freezes and increased employee health care contributions were also proposed. The county would save $646,000 from five furlough days and $1.9 million on 15, the report said.
Personnel costs make up about 60 percent of the county’s general fund expenditures, the report said.
In 2009, this amounted to $77.1 million of the $129.2 million budget.
Many personnel changes would require union negotiations. The county had about 1,685 employees at the beginning of the year – 1,344 in unions, the report said.
Health insurance cost the county $13.37 million in 2009 and is expected to increase to $17.5 million by 2013, the report said.
Despite success requiring more employees to pay toward their health insurance, the county still does not meet regional and national norms for cost-sharing, the report said.
Few, if any, stones were left unturned in the report. Even black flies were mentioned. The county could save $415,376 through 2013 by stopping the Black Fly Suppression Program, the report said.
Counties aren’t required to participate in the program. This year, 34 of the state’s 67 counties opted not to participate, including four of the seven counties bordering Luzerne, the report said.
“While black flies are a nuisance, they generally pose no serious health risks to people,” the report said.
Go to www.timesleader.com to see the county’s financial recovery plan.