Scranton has received an optimistic financial progress report and likely won't experience the same kind of calamitous cash-crunch crisis that nearly sunk the city last summer, council members said during their meeting Thursday.
However, a six-page memo from the city's Act 47 recovery coordinator, Pennsylvania Economy League, carries caveats that various budgetary and revised recovery plan goals still must be met for the city to end 2013 on sound financial footing, and 2014 could prove more challenging.
Still, the outline by PEL Executive Director Gerald Cross was viewed positively. If all goes according to plan - which is by no means a certainty - the city may end the year with a $356,151 surplus, Mr. Cross stated in the May 22 memo that council received Tuesday.
"The memo is very optimistic. PEL seems to indicate we're moving in the right direction," Councilman Bob McGoff said.
Mr. Cross stated: "Based on current projections, the coordinator anticipates that the city will end 2013 in a slightly positive position with a $356,151 surplus. The coordinator also expects that the city will have sufficient cash on hand to avoid a repeat of the 2012 cash crisis."
However, the city likely will have to delay payment of some bills at the end of the year to meet payrolls and start 2014 with $1 million on hand, Mr. Cross stated.
Some of the memo's highlights include:
n A main goal not yet accomplished - borrowing $22.1 million to pay a $17 million landmark arbitration award to the fire and police unions and increase pension payments by $5.1 million - has been penciled in for the purpose of determining a surplus or deficit, Mr. Cross said. The city has engaged financial firm Janney Montgomery Scott to obtain this financing through private placement bonds, and it should be completed by Dec. 31. If this financing is not obtained this year, that would not create an operating budget cash-flow problem, but the debt would carry over and become more expensive.
n The city likely won't receive $1.3 million in payments in lieu of taxes (PILOTs) from nonprofits, but has budgeted a contingency fund to cover PILOT shortfalls.
n The city did not get Lackawanna County Court approval for a 1 percent commuter tax for 2013 that was budgeted to bring in $2.5 million in revenue. The city should petition the court this year for a commuter tax for 2014, and do it soon enough to receive a ruling by Aug. 31.
n Revenue gains are coming from increases in real estate, realty transfer, business privilege and mercantile taxes and creation of an amusement tax. A market-based revenue opportunity (MBRO) program of selling ad space on city properties and parking enhancements also expected to produce new revenue, although not as much as anticipated due to delays in implementation.
In another matter, council voted 5-0, with Mr. McGoff, councilmen Pat Rogan, Frank Joyce and Jack Loscombe and council President Janet Evans all in favor, to introduce a resolution accepting a recommendation from the city's Historical Architecture Review Board (HARB) backing the University of Scranton's plan to raze and replace Leahy Hall. Part of that structure is the 1907 former YWCA building, and HARB recommended that recognition through exhibits of the building, the YWCA and its role in the city is appropriate.
The university plans to break ground this summer on a 111,500-square-foot, eight-story rehabilitation center on the southwest corner of Jefferson Avenue and Linden Street. The $47.5 million center will replace Leahy Hall and provide space for the undergraduate and graduate programs in the departments of exercise science, occupational therapy and physical therapy. Demolition and construction are expected to begin this summer, pending approval from the city.
Representatives of trade unions, Rick Schraeder, Jack Figured and Drew Simpson, spoke in favor of the university's plan and said it would create local union jobs and be an economic boon to the city. Mr. Rogan, Mr. Joyce and Mr. Loscombe each said they support the building plan.
After unanimously introducing the HARB resolution, council then voted 3-2, with Mrs. Evans, Mr. Joyce and Mr. Loscombe in favor and Mr. McGoff and Mr. Rogan opposed, to table the resolution to get clarification from HARB on its recommendation. Mrs. Evans said HARB performed a "courtesy review" rather than a mitigation review. Mr. McGoff and Mr. Rogan said they saw no need to table the resolution, which would be up for adoption after a second reading. Mr. Loscombe said the zoning board - which is scheduled to hear on June 12 a dimensional variance for a sight triangle encroachment from the university project - should vote on that variance before council votes on adopting the HARB resolution.
In September, the council threatened to oppose any zoning variance that the university may need from the city for improvements outside its original institutional district. Council solicitor Boyd Hughes said Leahy Hall is outside the university's institutional district. But Jim Devers, the university's assistant vice president of operations, told council the building is a permitted use in the central business district. Council did not mention opposing the variance. After the meeting, Mr. Hughes said the fact that the building is a permitted use makes the issue different from what had been discussed in September.
In other matters:
n Residents Joanne Davis and Chris Syslo spoke of a new fund, St. Cats (pronounced Street Cats), created to tackle the problem of feral cats in the city. They favor trapping, neutering and releasing feral cats over euthanization.
n Resident Marie Schumacher chastised council for not researching what will become of the Col. Frank Duffy Memorial near the Harrison Avenue Bridge when the bridge is torn down and replaced. The statue, known as the "Doughboy," was named in honor of Col. Duffy, who was killed in France in World War I on Aug. 18, 1918. Council members took umbrage at Ms. Schumacher's comments and said they support preserving and possibly relocating the memorial to an appropriate location.
n Mr. Figured asked about the status of repairs to the Rockwell Avenue Bridge, which has been closed for a year. Neighbors have no indication of that bridge's status, he said. Mr. Loscombe said council is in the dark on the matter, too.
n Mr. Joyce said the city has received complaints from residents in the area of River Street and Meadow Avenue about unsightly billboards in that area.
n Mrs. Evans noted that two zoning board terms are ending and will be vacant, those of Lance Stange and Mary Ann Wardell, who last year filled a vacancy created by the death of Jim Williams. Residents interested in serving on the zoning board may submit resumes to the city, Mrs. Evans said.
n Council again took no action on changing rules for food trucks that operate in the city because legislation on the matter has not been completed.
Contact the writer: jlockwood@timesshamrock.com, @jlockwoodTT on Twitter