Wilkes-Barre’s bid for distressed status all but certain

By Jerry Lynott - [email protected]
Wilkes-Barre City Council Chair Tony Brooks, center, listens to testimony during the Act 47 public hearing at City Hall on Wednesday. - Bill Tarutis | For Times Leader
Wilkes-Barre City Council member Beth Gilbert, center right, listens to testimony during the Act 47 public hearing at City Hall. - Bill Tarutis | For Times Leader
Officials with the state Department of Community and Economic Development listen to Wilkes-Barre Mayor Tony George offer testimony during a public hearing on the city’s application for distressed status at City Hall on Wednesday. - Bill Tarutis | For Times Leader
James Rose, of the Governor’s Center for Local Government Services, offers testimony on the evidence supporting the City of Wilkes-Barre’s application for distressed status. - - Bill Tarutis | For Times Leader

WILKES-BARRE — A state official agrees with Mayor Tony George. Wilkes-Barre is a financially distressed city and needs help.

The recommendation came Wednesday from James Rose of the Governor’s Center for Local Government Services during a public hearing on the city’s request for assistance under Act 47.

“It is the center’s opinion that the city of Wilkes-Barre has exhibited conditions that make it difficult to fulfill its responsibilities and provide for the health, safety and welfare of its citizens,” Rose said at the start of the hour-long hearing attended by more than 50 people.

Rose, whose agency falls under the state Department of Community and Economic Development, told the audience that included state and city officials he based his conclusion on the investigation done after Mayor Tony George filed a petition with the department June 29.

George maintained the city met two of the 11 criteria to be declared distressed: a deficit of 1 percent or more in each of the three previous years; and expenditures exceeding revenues for three years.

If DCED declares Wilkes-Barre distressed — all that’s needed now is a formal declaration — it will appoint a coordinator to draft a recovery plan that could last up to five years. The plan must be approved by city council and could include tax hikes and other steps to control spending.

Coming into office in January 2016, George warned of pending money troubles and turned to the Governor’s Center for help. The city entered the state’s Early Intervention Program to avoid Act 47, but his administration battled with council to put into place measures proposed by a consultant to stabilize finances.

“Our current financial situation is a perfect storm that has been forming for many years, dates back to other administrations,” George testified at the hearing.

The mayor rattled off deficit figures based on projections from consultant PFM (Public Financial Management) — $3.5 million deficit in 2019, $6 million in 2020, and $7 million in 2021.

“Clearly, we are not in an enviable position,” George said.

Council made it clear “they had no appetite” to raise property taxes or increase fees he proposed as unions were seeking pay raises, pension payments were increasing and expenses were rising, the mayor noted.

When Kim Bracey, executive director of the Governor’s Center, asked if any of the five council members in attendance wanted to speak, they remained silent.

‘Far too long’

City Administrator Ted Wampole supported the mayor’s decision to seek Act 47.

“Quite frankly, due to stagnant revenues and increasing expenditures we need your help,” Wampole said.

It’s not an act of surrender or giving up, Wampole said. Instead, it shows “great courage and strong leadership” on the part of the mayor.

“This can has been kicked down the road for far too long,” Wampole added.

Resident Linda Joseph said she wants the city she has called home for the past 64 years to survive and thrive.

“If assistance and guidance from the DCED is what will make that happen, I am all for it,” Joseph said.

Joseph asked if the recovery plan would take a look at ending the annual $1,500 payment that police and firefighters receive as a result of a labor decision related to civilian enforcement of parking. She estimated it’s cost the city more than $2 million over the last 10 years.

Property owner Tom Dombrowski, meanwhile, urged the city to sell the Wilkes-Barre Municipal Golf Course.

“You have a major asset here which you’re holding onto,” Dombrowski said.

He calculated the 200-acre course in Bear Creek Township and the 340 acres surrounding it are worth between $6 million and $15 million.

Jason Carr and Philip Holena protested the pensions paid to city employees.

Carr, a property owner, said the pension calculation should be based on base salary alone.

“I just ask that going forward business decisions are made rather than political decisions,” Carr said.

Holena called the pension payments “the big elephant in the room” that must first be addressed under Act 47.

The public has an additional 30 days to submit statements to DCED, Bracey noted. They can be sent by email to [email protected] or by mail to:

DCED, 400 North St., Fourth Floor, Harrisburg, PA, 17120 Attention: DCED Financial Recovery Program.

Wilkes-Barre City Council Chair Tony Brooks, center, listens to testimony during the Act 47 public hearing at City Hall on Wednesday.
https://www.timesleader.com/wp-content/uploads/2018/08/web1_TTL080218ACT47-JL_5-1-1-1.jpgWilkes-Barre City Council Chair Tony Brooks, center, listens to testimony during the Act 47 public hearing at City Hall on Wednesday. Bill Tarutis | For Times Leader

Wilkes-Barre City Council member Beth Gilbert, center right, listens to testimony during the Act 47 public hearing at City Hall.
https://www.timesleader.com/wp-content/uploads/2018/08/web1_TTL080218ACT47-JL_6-1-1-1.jpgWilkes-Barre City Council member Beth Gilbert, center right, listens to testimony during the Act 47 public hearing at City Hall. Bill Tarutis | For Times Leader

Officials with the state Department of Community and Economic Development listen to Wilkes-Barre Mayor Tony George offer testimony during a public hearing on the city’s application for distressed status at City Hall on Wednesday.
https://www.timesleader.com/wp-content/uploads/2018/08/web1_TTL080218ACT47-JL_1-1-1-1.jpgOfficials with the state Department of Community and Economic Development listen to Wilkes-Barre Mayor Tony George offer testimony during a public hearing on the city’s application for distressed status at City Hall on Wednesday. Bill Tarutis | For Times Leader

James Rose, of the Governor’s Center for Local Government Services, offers testimony on the evidence supporting the City of Wilkes-Barre’s application for distressed status.
https://www.timesleader.com/wp-content/uploads/2018/08/web1_TTL080218ACT47-JL_3-1-1-1.jpgJames Rose, of the Governor’s Center for Local Government Services, offers testimony on the evidence supporting the City of Wilkes-Barre’s application for distressed status. Bill Tarutis | For Times Leader
Bid for state help all but certain

By Jerry Lynott

[email protected]

Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.

Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.