Decision on sale/lease of Wilkes-Barre sewer system expected by end of March

WILKES-BARRE — In a move to further distance himself from the previous administration, Mayor George Brown said he’s disconnecting a decision on the sale or lease of the city’s sewer system from an upcoming vote on keeping the underfunded pensions afloat.

“They’re two separate issues,” Brown said Monday, maintaining the position from last week when asked about the connection.

Brown, who was sworn in on Jan. 6, has made it clear he is charting a financial course different from his predecessor, one-term mayor Tony George, by preparing his own budget for starters.

The budget proposal, allowed by the City Charter, will be presented to the public at 10 a.m. on Jan. 27 in council chambers on the fourth floor of City Hall. Council has until Feb. 15 to approve it.

George’s budget, that was not approved by council last year due to its reliance on $2.5 million in revenue from three yet-to-be begun downtown construction projects, did not contain any funds from the sewer system sale. Details were not available on the sale when the budget was presented in October.

But last November when council heard from PFM Financial Advisors LLC, the Harrisburg-based firm handling the sale, that rates would increase under private ownership it asked for additional information about a possible lease and scheduled a public meeting for the options to be discussed. It also wanted to hold off on any decision until Brown took office. However, the public meeting set for Dec. 17 was canceled for lack of information on the lease option.

In response to a question from resident Mark Shaffer during the Jan. 16 city council meeting, Brown talked about the change in plans. PFM was asked to prepare a new Request for Proposals on a sale and lease of the system, he said.

“We’re going to have a public meeting, and PFM will present both positives and negatives to the public of the sale and or lease. You can ask questions at that meeting,” Brown said.

Once the information is presented and reviewed, Brown said, he’ll make a recommendation to council that he feels will be in the best interest of the citizens of Wilkes-Barre.

“My hope is to get this done first quarter of this year,” Brown said.

But doesn’t that miss the deadline of Feb. 12 for the next meeting of Aggregate Pension Fund Board, Shaffer asked.

The board, at its November meeting, choose to wait for information about the sewer system and the possible influx of millions of dollars rather than vote on recommendations by the city’s actuary that would increase the city’s contributions by a combined $2.7 million in 2021.

“That’s two different items now,” replied Brown, who joined the board upon taking office. “I’m not saying that that’s the new mayor’s plan.”

Brown added that his proposed budget contains the $7.1 million in Minimum Municipal Obligation payments to the plans — non-uniformed, retired police and fire, and active police and fire. He said he would like to maintain the long-term rate of return of 8% rate for the plans this year. The actuary recommended a return of 7.75% next year and that will be addressed in the 2021 budget, Brown said.

City Controller Darren Snyder, also a pension board member, advocated approval of the actuary’s recommendations.

“Based on my research, every pension that’s fully funded has consistently followed the advice of the actuary,” Snyder said.

The board’s job is to protect the plans not set the budget, Snyder said. He pushed for approval of the recommendations at the board’s November meeting.

“It’s kicking the can further down the road,” Snyder said of not making the recommended changes. “I don’t feel comfortable not doing anything.”