Scranton's proposed 2013 budget includes a $1 million line item to help cover expenses, both expected and unanticipated, next year, including a shortfall in donations from nonprofits.
The city has budgeted $1.3 million for payments in lieu of taxes from nonprofits that are hoped to be received but for which no commitments have been given.
Any shortfalls would be made up from the $1 million line item, which is listed as a "contingency" in the budget. However, this line item would only exist to the extent that the budget's various revenue projections, some of which are speculative, would all come through to balance the budget, officials said.
While a contingency line item has been set aside for many years in the city's annual budgets, it is being eyed again for use next year at a time when the city also is raising property taxes and other taxes and fees and is seeking court approval for a 1 percent commuter tax.
City Business Administrator Ryan McGowan said, "It's just a line item in the budget for overages."
There are no state parameters for such a contingency line item regarding how much to set aside or where to spend it, Mr. McGowan said.
Pennsylvania does not have a mandated, uniform budget process, or even a uniform type of budget, according to the Governor's Center for Local Government Services' "Fiscal Management Handbook."
"From a budget perspective, a contingency fund is used by some local governments to address unexpected situations with the potential to pose a significant liability," said Theresa Elliott, deputy press secretary of the state Department of Community and Economic Development, in a statement. "The funds could also be used to handle a situation the municipality could not have foreseen/planned for."
An alternative way to address such issues is to build up a reserve in a "fund balance" or establish a separate reserve fund, Ms. Elliott said.
In that regard, a contingency line item is not the same as an unrestricted fund balance, which is an actual surplus that would exist in its own bank account, Mr. McGowan said.
Scranton, a financially-distressed city since 1992 under state Act 47, does not have any such fund balance surplus, Mr. McGowan said.
Over the years, Scranton's contingency line item has been used annually as has been deemed necessary by mayors and councils, and they have been spent in various areas, ranging from a few thousand dollars for tax refunds to hundreds of thousands of dollars for insurances, overtime or contractual employee pay raises, according to Times-Tribune archives.
Some of the city's prior uses of contingency funds have included:
n This year, $1.3 million to pay debt of the Scranton Parking Authority that the city had previously guaranteed.
n In 2011, $14,300 to cover accounts for early retirement for police and firefighters.
n In 2010, $270,000 for employee overtime, and $162,652 for Fire Department life insurance adjustments.
n In 2007, $13,000 donated to then-public-access television Channel 61.
n In 2001, $54,160 to pay for cleaning up a March snowstorm that dumped nine inches of snow on city streets.
n In 1999, the city set aside slightly less than $1 million in three contingency funds for unemployment insurance, health insurance and overtime.
n In 1993, $93,874 from two contingency accounts to cover salaries, a sick leave buy-out and severance pay for emergency dispatchers; $3,575 to buy five identifiers for fire mobile radios and for modification of a monitor receiver; and $3,000 for additional tax refunds for the last six months of 1993.
n In 1992, $138,000 to pay outstanding bills from a lawsuit.
Contact the writer: jlockwood@timesshamrock.com