In a series of actions aimed at keeping financially struggling Scranton afloat, city council on Thursday adopted a $21 million bond ordinance and three tax increases, and introduced an amusement tax that is one of the new revenue generators in the city's revised recovery plan.
Council President Janet Evans and members Frank Joyce, Bob McGoff and Jack Loscombe voted for the actions, while Councilman Pat Rogan was absent.
The $21 million bond ordinance will fund new debt and an increase in mandatory pension contributions and refinance old debt from a series of bonds issued in 2003, officials said. The $21 million figure is a cap, and the city may not need to borrow that entire amount, council solicitor Boyd Hughes explained.
Council also voted 4-0 to adopt an ordinance for a dedicated tax millage increase to pay for $9.75 million in unfunded debt that the city is seeking after a Lackawanna County Court judge gave approval on Oct. 31 for it. The bond ordinance and millage-hike ordinance both were advanced on second readings, and council then suspended rules to be able to hold third readings and votes to adopt them.
Some residents expressed concern about the large amounts of borrowing the city is pursuing in the forms of the bond ordinance and unfunded-debt packages.
"I understand we're in trouble. And I understand we're in desperate trouble. But why are we making the debt higher and higher and higher?" Andy Sbaraglia asked. Mrs. Evans said she shared such concerns but noted she did not support the city's previous borrowings of tens of millions of dollars by Mayor Chris Doherty and former councils of several years ago. She said the city's financial "house of cards" has collapsed and the debt the city now is seeking is necessary to prevent bankruptcy.
"We're faced with a choice of these unfunded-debt borrowings or allowing the city to go under, which will then drive up tax increases astronomically and at the same time your services are going to be cut in half," Mrs. Evans said.
In other matters, the council voted 4-0 on each of the following:
-âTo provide $150,000 toward an $813,400 bond payment of the Scranton Parking Authority that is due Dec. 1. A court-appointed receiver for the SPA would also provide $150,000 toward the bond payment, and the remainder of more than $500,000 would be covered by bond reserves, Mr. Hughes said. Because of time constraints, the SPA bond payment was approved by council on an emergency basis, by suspending rules to introduce, advance and adopt it all at the same time. As there will be no council meeting Thursday due to the Thanksgiving holiday, waiting to approve the SPA bond payment at the council's next regular meeting on Nov. 29 would have cut it too close to ensure that the Dec. 1 bond payment would be made on time, Mr. Hughes said. Mrs. Evans lauded Mr. Hughes for negotiating with the SPA's bond insurers to reduce the city's exposure on the bond payment, from the city having to pay the entire $813,400 and instead only having to cover $150,000 of the tab.
-âTo introduce an ordinance to impose a 10 percent amusement tax "upon the privilege of attending or engaging in amusements, including every form of entertainment, diversion, sport, recreation and pastime," and "requiring all persons, partnerships, associations and corporations conducting places of amusements" to collect the tax. The ordinance also carries penalties for violations.
Council members have said an amusement tax primarily would be imposed on Montage Mountain attractions, including the Lackawanna County-owned Toyota Pavilion concert and event venue, the privately owned Snö Mountain ski resort/Snö Cove water park, as well as the downtown Scranton Cultural Center at the Masonic Temple.
Under the plan, an amusement tax would be 10 percent of the face value of a ticket to a concert at the pavilion, a performance at the Cultural Center or a ski resort lift ticket or water park admission.
While the language of the ordinance is all-encompassing, council members said their intent is not to tax items such as school events or films shown at movie theaters, and the ordinance would be amended before adoption to specify such exemptions. The council has estimated that an amusement tax would generate $700,000 over three years as follows: $200,000 in 2013 and $250,000 in each of 2014 and 2015.
-âTo adopt ordinances to increase the real estate transfer, business privilege and mercantile taxes for 2013, and to keep both the garbage collection fee of $178 and the $52 Local Services Tax for emergency services the same next year. The setting of these taxes and fees is usually done each January, after the city's annual budget has been adopted. However, they were adopted now in anticipation of the city seeking court approval on Dec. 10 for a 1 percent commuter tax. The city needs to be able to show the court that the city has taken steps to increase taxes on its own residents and businesses before taxing nonresidents, Mr. Joyce said. The increases in the real estate transfer, business privilege and mercantile taxes also are contained in the city's revised Act 47 recovery plan that was adopted in August. The increases also would return these taxes to their 2010 levels. The real estate transfer tax would be raised from the current 2.8 percent to 2.9 percent, which would generate an additional $185,000 a year; while the business privilege and mercantile taxes each would be raised from their current 0.00087525 percent to 1 mill in 2013, which together would generate an additional $500,000 a year. A mill is a $1 tax on every $1,000 of a property's assessed value.
-âTo approve a resolution accepting a $750 donation from Sanofi Pasteur to the city Fire Department.
-âTo approve a resolution appointing Mary Ann Wardell to the zoning board to fill a vacancy created by the Sept. 29 death of board Chairman Jim Williams. The term expires July 1.
-âTo introduce measures to reappoint Nancy Bisignani and John Moore to additional five-year terms each on the city's Historical Architecture Review Board. Their terms ended Oct. 11 and their new terms would end Oct. 11, 2017.
-âTo introduce a measure to vacate an unopened right of way in the 200 block of McDonough Street, between Greg Court and Colliery Avenue, so adjacent homeowners can acquire an equal share of the property as annexations to their existing parcels. This portion of the street has never been opened by the city and no longer serves a public purpose, city Planner Don King advised the administration in a memo. City Engineer John Pocius also advised in a memo that the portion of the street has been unopened and undeveloped for at least 44 years, and the request to vacate it is reasonable and would not compromise public safety. The request was made by professional engineer George Parker of South Abington Twp. on behalf of the adjacent landowners, Dennis and Zita Timlin and B&S Realty Holdings LLC. The right of way remains subject to a permanent easement of the Scranton Sewer Authority.
-âTo introduce a measure to accept a recommendation of the Historical Architecture Review Board to approve a vinyl banner within a sign panel recess at Bella Faccias Personalized Chocolates and Gifts at 516 Lackawanna Ave. The applicant for the sign is Magical Markers Vinyl Graphics of South Abington Twp.
Contact the writer: jlockwood@timesshamrock.com