A multiyear effort to recoup $2.9 million left from a Luzerne County tax diversion program may come to a head next week.
On one side, the county, Wilkes-Barre Area School District and Wilkes-Barre Township are hammering out a joint proposal to split the remainder based on the percentage of real estate tax revenue each had sacrificed to fund infrastructure improvements on Highland Park Boulevard and Mundy and Coal streets.
On the other is Wilkes-Barre, which did not join the other taxing bodies in giving up tax receipts on new development sparked by the infrastructure. City officials continue to argue the remaining funding must remain in the bank to finish extending Coal Street another 280 feet so it connects with Pennsylvania Avenue.
County Manager C. David Pedri told council the three united taxing bodies will submit their disbursement proposal to the county Redevelopment Authority board at its Tuesday meeting.
The five-member authority oversees the 1998 Tax Incremental Financing plan, or TIF. Authority members recently approved payment of the final bill connected with the Coal Street widening and instructed the county, school district and township to come up with an agreement on how they wanted the remaining funds disbursed.
As part of the release of funds, the authority also sought legal protection in case the city sues. The agreement the three taxing bodies are presenting next week is expected to contain an indemnification clause for the authority if legal action is filed.
County council members voted to close out the tax diversion in 2015 and have regularly complained about delays receiving the funds.
”Why are we begging for our own money?” Councilman Robert Schnee asked during Pedri’s council meeting update this week. “That’s our money. Why should we be beggars to the Redevelopment Authority?”
Councilman Harry Haas said he won’t consider another tax diversion program unless the county receives every penny it is owed.
“This has been a lot of nonsense for too long as far as I’m concerned,” Haas said. “I’m tired of it.”
Collectively, the three taxing bodies gave up $9.756 million to fund the infrastructure.
The county’s contribution was $4.08 million, or 42 percent, Pedri said. The school district gave up $5.35 million, or 55 percent, while the township kicked in $318,983, or 3 percent.
The unused pot should remain around $2.9 million because the only lingering expenses would be minimal bills for authority legal and administrative work, Pedri said.
That means the proposed disbursements would be $1.2 million for the county, $1.6 million for the school district and $87,000 for the township. Pedri said it would be up to county council to determine if the county’s $1.2 million is set aside or earmarked for a project.
City officials say they have tax diversion program documents ensuring the remaining Coal Street extension is funded, but county representatives have privately said they are confident this assertion would not hold up in court.
Attorney William Vinsko, who is handling the matter on the city’s behalf, said city Mayor Tony George has authority over litigation and will decide the city’s next step.
George said Wednesday he stands by the position the tax diversion can’t be disbanded without city approval because the city and Coal Street extension were part of the package.
“We’re hoping we can get cooler heads to prevail because this project will help everybody,” Vinsko said. “Our goal is to work out an amicable agreement.”
Last estimated to cost $12 million with a 20 percent local match, the Coal Street extension would include the lowering of a railroad embankment between Market and Butler streets to eliminate a railroad bridge over Scott Street, officials have said. Scott Street also would be elevated and widened in the area of the railroad bridge to prevent flooding during heavy rain.
Pedri told council that preliminary engineering work for the Coal Street extension is on the state’s transportation plan for 2024, but it would be up to the city to come up with the local match to proceed. Pedri said Wednesday he is open to discussions about any future development projects.
“But it’s been the county’s position that this particular TIF is over, and these funds need to be distributed,” Pedri said.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.