WILKES-BARRE — The city isn’t alone in waiting to hear what’s next after it was denied Act 47 designation by the state Department of Community and Economic Development last week.
S&P Global Ratings also said it’s interested in what follows.
Two days ahead of a conference call the city will have with DCED, S&P issued a bulletin Wednesday stating its credit rating for Wilkes-Barre remains unchanged following the rejection, but that doesn’t mean changes won’t come eventually.
After the mayor applied for Act 47 “distressed” status in June, S&P placed the city’s “BBB (minus)” rating on CreditWatch with negative implications. It was the second action taken after the rating was lowered from “A (minus)” in May 2017 due to cash flow constraints.
“The CreditWatch listing means we believe there is at least a one-in-two chance that we will lower the rating within the coming 90 days following the receipt of information from the city regarding its plans in response to the state’s rejection,” S&P said in its bulletin. “Any action on our part regarding the rating — either keeping it the same or revising it downward — hinges on our better understanding of those plans.”
A lower rating would affect the interest rate the city pays on bonds and reduce their investment grade.
DCED officials will hold a conference call at 1 p.m. Friday with members of Mayor Tony George’s administration and Public Financial Management, the city’s financial adviser, city Administrator Ted Wampole said.
“We’ll find out Friday what DCED has in mind,” Wampole said Wednesday.
The call comes a week after DCED Secretary Dennis M. Davin said Wilkes-Barre won’t be declared financially distressed and the mayor should pursue other opportunities, including sticking with the Early Intervention Program it embarked on last year to avoid Act 47.
State Sen. John Yudichak and state Rep. Eddie Day Pashinski secured $260,000 in state funds to get Wilkes-Barre into the EIP. They wanted the city to get its money’s worth and said as much in a letter to Davin.
In their July 31 letter, the lawmakers opposed the mayor’s request for distressed status that would allow for the appointment of a coordinator to draft a recovery plan for the city to approve and follow for up to five years.
The EIP also had a five-year timetable and the city had four years left, the lawmakers said. Granted, it wasn’t going to be easy, but the city was making progress with the help of PFM as evidenced in the bond restructuring that improved the cash flow, they said.
“We’re trying to preserve the integrity of the city,” Pashinski, D-Wilkes-Barre, said Wednesday.
Neither lawmaker said they wanted to get involved in the day-to-day operations of the city. Their roles were to offer help and be part of conversations going forward.
“We have no interest in micromanaging the city,” added Yudichak, D-Plymouth Township.
Yudichak said he and Pashinski had been involved in securing state funds for the Solomon Creek wall project and the relocation of the Berkshire Hathaway GUARD Insurance headquarters to Public Square.
It’s not the time to point fingers or “take shots” at anyone because the city has serious financial problems, he added. The focus should be on finding ways to resolve the problems and the EIP is a good starting point, he said.
“Act 47 may be on the horizon. Let it be the distant horizon,” Yudichak said.
Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.