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Luzerne County Council approved a $16 million tax anticipation loan last week, which was a reduction from the up to $17 million the administration had projected would be needed two weeks earlier.
County Budget/Finance Division Head Brian Swetz told council subsequent analysis determined the lower amount would be acceptable.
The county has turned to such loans since at least 2004 to cover expenses until real estate tax revenue rolls in, the administration said.
County Manager C. David Pedri told council the borrowing was reduced from $18 million to $17 million in 2016, and he was “thrilled” to require less in 2019. The eventual goal is to build a permanent reserve that carries over from year to year so such borrowing is reduced or even eliminated, officials have said.
Pedri also noted the loan’s 2019 interest rate — 2.489 percent through PNC Bank — is lower than the 2018 rate.
The loan will be repaid within six months, he said.
Voting machines
Council’s ability to avoid a 2019 real estate tax hike last week stemmed largely from a decision to use $1 million left from a 2018 contingency to cover rising expenses next year.
Council Chairman Tim McGinley had proposed applying that $1 million toward the possible purchase of new voting machines, saying the action may allow the county to avoid borrowing to fulfill the mandate.
The machines are estimated to cost $4 million, but McGinley had said Gov. Tom Wolf recently announced he will seek significant state funding toward the cost. The county has received a commitment of $327,000 in federal funding for new voting machines.
Councilman Harry Haas said he does not believe the county should earmark any money toward the machines or proceed with purchasing them unless sufficient funding is provided by the state and federal governments. Councilman Stephen A. Urban concurred.
Council Vice Chairman Eugene Kelleher said he agrees with their statements but believes the county should put money aside in case the county is forced to buy machines.
To the surprise of some, Councilman Matthew Vough made a motion to switch the $1 million from the voting machine earmark to next year’s expenses.
“I’m with Harry on this voting machine issue,” Vough said.
Eight council members approved Vough’s motion, with no votes from Edward Brominski, Kelleher and McGinley.
With the exception of Brominski, all council members ended up supporting the final budget.
Other cuts
In addition to changes involving the contingency fund, two budget reductions were approved by a council majority shortly before the final adoption vote.
County Controller Michelle Bednar had requested a new $5,000 allocation for outside legal services in 2019, saying the money would only be spent if the need for an independent legal opinion arises during audits.
Council reduced the amount by $3,000 and provided $2,000.
A request for $320,000 to cover special legal services in the conflict counsel office was lowered to $290,000 to trim $30,000.
Chief Solicitor Romilda Crocamo told council she concurs with its decision. Prior suggested council amendments to cut the earmark to $100,000 or $250,000 did not receive the required six votes.
Meetings
Council won’t meet again until January.
Pedri will hold his third annual public forum at 5 p.m. Wednesday in the courthouse. The session is required by the county’s customized home rule government structure, which will mark its seventh anniversary in January. Pedri is the second non-interim manager under home rule.