Wilkes-Barre’s budget balance dwindling as deficit expected

WILKES-BARRE — The city’s general fund budget balance remained positive at the end of the third quarter, but at a much lower level than a year ago, according a draft of the September financial report.

The balance stood at $1.4 million as of Sept. 30 as the city reported $37.4 million in revenues and $35.9 million in expenses. At the end of September 2019, the balance was $5.6 million, a difference of $4.1 million in the year-over-year comparison.

Historically, most of the revenues are in at the nine-month mark with enough of a cushion for the city to pay its bills and balance the $51.9 million budget or come out a little bit ahead at year’s end. But Mayor George Brown has been upfront about a deficit that’s still to be determined.

Responding to questions at the city council combined work session and public meeting on Nov. 5, Brown presented the state of the finances affected by the novel coronavirus pandemic.

There’s been no relief from county, state or federal sources for loss of revenues caused by the shutdown of businesses and job losses, Brown told council vice chairman Tony Brooks who asked about COVID-19 relief funds.

“Mr. Brooks let me clarify something. Since we started having a loss of revenue, Mercantile Tax, Earned Income Tax, the other permits that we counted on, for some of the buildings that we were looking at, that’s where we lost over $4 million,” Brown said.

Without the revenues coming in, it’s getting difficult to run the city and pay expenses, Brown said. “I’m looking at ways I’m going to pay the payroll through the rest of this year,” he said.

The city was $2.5 million behind last year’s mark in terms of revenues, according to the draft financial report. Expenses were running $1.6 million ahead of September 2019.

Some relief could be coming from the 3% Earned Income Tax imposed on residents. The report listed $10.7 million or 73% collected of the $14.6 million budgeted. A good portion of the remainder is expected by the end of the year, Brown said. What’s collected next year for the 2019 budgeted tax revenues will be applied to the 2019 under the city’s accrual accounting method

The city fared better with the property tax, collecting $10.9 million or approximately 95% of the $11.5 million budgeted, according to the report.

It fell far short of the budgeted $2.4 million in building permit fees, bringing in 19% or $466,619, according to the report.

The $50 annual recycling fee that Brown proposed doubling in next year’s budget brought in $108,309 or approximately 15 % of the $725,000 budgeted, the report said.

The other fee Brown proposed doubling to $100 next was doing better. The sewer fee was budgeted to generate $1.3 million in revenues. The city collected $846,670 or 65% of the total, the report said.

The $3 million Tax Anticipation Note taken out by the city at the start of the year to carry it over until tax revenues roll in, was listed as a revenue and expense.

The Hollenback Golf Course exceeded its budgeted revenue of $111,350. The report listed revenues of $148,366 or 133% of the budgeted amount. On the expense side, the city budgeted $308,825 for the operation of the course. It spent $214,673 or approximately 70% of the budget, the report said.

Brown said in a press release Monday that discussions about leasing Hollenback are underway with the General Municipal Authority, that operates the Wilkes-Barre Municipal Golf Course in Bear Creek Township. The management change could lead to substantial savings for the city, Brown said.

The city has been itemizing salaries and expenses related to COVID-19 for reimbursement of the unbudgeted expenditures. Through the end of September, the city reported $779,793 in COVID-19-related expenses.