Financially strapped Scranton's 2013 budget contains hefty raises for six city employees, including the part-time solicitors of the administration and council.
The budget comes following a summer in which the city narrowly avoided a financial meltdown, at times unable to pay its bills or convince banks to loan it money. There are no layoffs or salary cuts in the budget.
Administration solicitor Paul Kelly and council solicitor Boyd Hughes each would receive a $15,000 pay hike next year due to their having significantly increased workloads with the city, said Mayor Chris Doherty. Their city workloads have been cutting into their private practices, the mayor added.
Mr. Kelly's salary would go from $52,500 to $67,500, or a 29 percent raise.
Mr. Hughes' salary would rise 33 percent, from $45,000 to $60,000, though he would not receive health benefits.
"They work more hours with us," Mr. Doherty said of the two solicitors. "They've been working long hours and they will next year, too."
Four full-time employees, including the fire chief and three business administration employees, also would have their pay partly restored to their former levels before their salaries were cut in 2011 and 2012 by the council supermajority led by council President Janet Evans, the mayor said.
Fire Chief Tom Davis would get a raise of $16,258, or 24 percent, from $67,228 to $83,486. This hike also is partly attributed to a statutory rank differential of what a chief earns relative to his subordinates, the mayor said.
Business administrator Ryan McGowan, finance manager Mary Lou Murray and human services director Gina McAndrew also each would get a $10,000 raise, as follows: Mr. McGowan's salary would rise from $53,550 to $63,500, or 19 percent; Ms. Murray's pay would increase from $37,400 to $47,400, or 27 percent; and the salary of Ms. McAndrew, an attorney who also is the city's PEL coordinator, would rise from $36,000 to $46,000, or 28 percent.
These employees also had hefty workloads and often worked weekends, as this year was particularly busy year for the city because of its financial difficulties, agreed the mayor and Mrs. Evans.
"I want to keep knowledgeable people in place," Mr. Doherty said. "It's in the city's interest to keep them."
Mrs. Evans said, "We were able to overcome many differences and keep the city operating during one of the most challenging years it's faced and people who worked the hardest deserve to be paid for their skills. For example, Boyd Hughes is arguably the best attorney the city has employed in a very long time."
Mrs. Evans said some of Ms. McAndrew's subordinates who are union members earn more than her, and the business administrator is arguably the most important job in city government.
Resident Gary Lewis, who during this year's financial meltdown of the city became active and has advocated for the city filing Chapter 9 bankruptcy as a solution, said he can understand raises for business administration employees who previously had salaries cut. But Mr. Lewis believes that pay hikes for the solicitors are unjustified because along with their salaries they have received fees this year from city borrowing packages.
"You're talking about granting raises in a town where you're going to have a deficit (in 2013) that you're going to close with borrowing," Mr. Lewis said. "I can rationalize a raise for a guy like Ryan McGowan. I can't rationalize raises for Boyd Hughes and Paul Kelly. I don't think they deserve anything. They've billed for work above and beyond what their salary is."
In defending Mr. Hughes, Mrs. Evans said, "He's been very successful in his dealing with the Scranton Parking Authority and saved a great amount of money for the city on that one issue alone. He handles all of the city's financings. He really has carried the ball on a number of issues."
Asked if the prior cutting of administrative salaries that are now being raised was a mistake, Mrs. Evans said, "No, I don't believe so because it was a situation where we had hundreds of employees, particularly public safety employees, who hadn't received raises in eight years. How does one justify many years of increases in management positions when the remainder of workers were frozen year after year."
Ms. Murray declined to comment, while efforts to reach Mr. Kelly, Mr. Hughes, Mr. Davis, Mr. McGowan and Ms. McAndrew were unsuccessful.
The budget, though presented by the mayor to council on Thursday, was a joint budget that both sides prepared together, officials have said. In the absence of a council meeting this Thursday, the budget is expected to be introduced by council Nov. 29. The budget proposal is not set in stone and amendments may be made, although the mayor and Mrs. Evans do not expect any major revisions.
Some other highlights of the budget include the following:
n The budget would increase $24.3 million, or 29 percent from $85.3 million to $109.6 million. The steep rise has been attributed to new borrowing and refinancing necessary to cover a landmark state Supreme Court arbitration award of $17 million due to the city's police and fire unions, to provide a $5 million increase in the city's mandatory minimum pension obligation, and to pay off interest of a $14 million tax-anticipation note the city will obtain next year.
n The city expects to borrow $25 million in 2013 to fund the back pay and pension increase.
n The budget contains a 12 percent real-estate tax hike, as well as increases in the real-estate transfer, business privilege and mercantile taxes, and a new commuter and amusement taxes. A 1 percent commuter tax must first be approved by a court and the city has a Dec. 10 hearing on its petition.
n The city has negotiated with Keystone Sanitary Landfill in Dunmore a deferred payment of $1 million in landfill fees in 2013, the mayor said. The city budgeted $1.5 million in landfill fees in 2012, but is only budgeting $500,000 in 2013. The mayor said the city has worked out a deal with Keystone to pay back the $1 million by paying $333,000 in each of 2014, 2015 and 2016, Efforts to reach a Keystone representative were unsuccessful.
n The city is negotiating to have its parking meter program run by Standard Parking, which recently merged with Central Parking System, the firm that now runs the city's parking garages. The city would lease its on-street meters to Standard.
"You need one entity in control of the garages and meters for pricing and to make it work with technology and having a business entity attuned to this," Mr. Doherty said. The fate of six parking-meter collection/enforcement employees remains unclear. These six were shifted a few months ago from the unraveled Scranton Parking Authority to City Hall. The takeover of the city's meter program remains under negotiation with Standard and efforts to reach a representative of that firm were unsuccessful.
n The city is budgeting to receive $1 million from "yellow" parking tickets. The city budgeted $700,000 from these parking tickets in 2012, but as of October had only collected $258,000.
n The city is budgeting $1.9 million in parking meter collections. The city budgeted $1.4 million in 2012 but by October had only collected $700,000. An increase is foreseen through a parking meter upgrade that would allow for credit-card and/or remote payments.
n The city's new parking tax is expected to raise $225,000 next year. That is less than half of the $500,000 in new parking tax that had been budgeted as a revenue this year. The tax had not been enacted until mid-year and by October the city had only collected $40,000 in this new parking tax.
n A new amusement tax has been budgeted to generate $200,000, or about $500,000 less than officials initially believed would be possible. "We put in what we think is likely to happen," Mr. Doherty said.
n The city next year expects to receive $1.3 million in payment in lieu of taxes (PILOT) donations from nonprofit institutions. This amount is significantly higher than the amounts of PILOTs that the city typically has annually received. For example, the city this year budgeted $183,000 in PILOTs and by October had received $204,000. In case the city falls short of its ambitious PILOT goal for 2013, the $1.3 million has been placed in a contingency fund that would be used to make up any PILOT shortfall, the mayor said.
n The city is planning to store abandoned and/or towed vehicles on a city-owned lot behind the police headquarters, and as a result has budgeted as a revenue $300,000 in new fees from such vehicles. Mrs. Evans said that is a conservative estimate of how much the city would reap in such fees.
n The city is budgeting as a revenue $1.9 million in building permits, much of which is expected to come from permits for construction and improvements by Geisinger Community Medical Center. In 2012, the city budgeted $1.3 million in building permits, but by October had only received $439,000.
n The city is budgeting as a revenue $600,000 in a "repayment from Ice Box development." Mr. Hughes first raised this issue during a council meeting earlier this year, when he claimed the city has been owed $600,000 under a lease of land to BRT Ice, the developer of the Ice Box development at the corner of Providence Road and West Olive Street. Mr. Doherty said, "There's an agreement in place and the development has been successful." Mrs. Evans said, "That was one of council's suggestions (to pursue the BRT Ice payment) and we discussed it with the mayor and he was in complete agreement that the time has come that the debt must be paid." Reached by telephone, BRT Ice developer Bob Burke said he was not aware of the city's claim that it is owed $600,000 by BRT Ice and otherwise had no comment about it.
Contact the writer: jlockwood@timesshamrock.com