Luzerne County Council debates use of remaining $2.1 million windfall

By Jennifer Learn-Andes - jandes@timesleader.com
Pedri -

After getting caught up on an $8.6 million in employee pension fund subsidy, Luzerne County still has $2.1 million left from this year’s one-time revenue windfall.

Two options for the money are up for council consideration: reduce the deficit or beef up the dwindling capital projects fund.

During public discussion last week, county Councilman Stephen A. Urban suggested moving money into the capital fund to start saving for a looming emergency 911 radio communications system overhaul estimated to cost the county $19.26 million.

A consultant has said the switch from an analog to digital system is crucial because the radio transmitters and receivers that allow emergency responders to exchange messages will become obsolete in 2020. County officials have not nailed down any outside funding streams to offset the cost of the project.

County Council Vice Chairman Tim McGinley is proposing transferring $1.5 million of the remaining funds into the capital fund, saying the county does not have a sufficient pot to cover capital repairs. An ordinance to proceed with his proposal is on Tuesday’s council agenda for introduction, with a subsequent majority vote required for final approval.

Approximately $1.2 million remains in the capital fund not earmarked for pending projects. Council is set to introduce another ordinance Tuesday tapping $150,000 of the fund’s remaining $1.2 million to complete prison shower renovations needed in part due to safety concerns.

But Councilman Rick Williams advocated keeping the money in reserve so it can be credited as a 2017 general fund operating budget surplus and whittle down the $7.98 million deficit the county is carrying on its fiscal books.

“I think it’s wise to get rid of that deficit and enjoy the benefits,” Williams said. “That’s a pretty important goal in my mind.”

Erasing the deficit and building a cushion that can be carried forward would improve the county’s credit rating and provide a source of funds that can be temporarily accessed and repaid so the county does not need an annual tax anticipation loan to survive at the start of the year until real estate tax revenue rolls in, Williams said.

McGinley said his proposal would still leave more than $500,000 of the windfall for deficit reduction.

The county also is still awaiting another one-time receipt from an expired tax-break program that could be applied to deficit reduction, Urban reminded. Although opinions differ, the county is estimated by some to be entitled to $1.2 million.

The money is from a Tax Incremental Financing, or TIF, program in which Luzerne County, the Wilkes-Barre Area School District and Wilkes-Barre Township sacrificed real estate tax revenue from new development along Highland Park Boulevard and at the Arena Hub Plaza in Wilkes-Barre Township to fund infrastructure improvements on Highland Park and Mundy and Coal streets.

County Manager C. David Pedri said the disbursement won’t be resolved until 2018 due to a state Department of Transportation review.

McGinley also is recommending transferring $211,000 in leftover workers’ compensation funds — money that was not part of the $2.1 million windfall — into the capital fund toward the 911 project. That ordinance introduction also is on Tuesday’s agenda.

Pedri told council last week the $8.6 million pension subsidy funded by the windfall has been paid.

The problem of overdue pension subsidies dates back years before the county’s 2012 switch to a home rule government structure. Paying the subsidy in the year after it is due causes the fund to lose out on investment earnings.

Pedri said in an email to council the county will “finally be able to pay this year’s bills with this year’s monies.”

“This decision will also greatly affect the pension fund’s reliance on general fund monies going forward,” he wrote.

Pedri
https://www.psdispatch.com/wp-content/uploads/2017/12/web1_Pedri-1.jpgPedri

By Jennifer Learn-Andes

jandes@timesleader.com

If you go

Luzerne County Council will meet at 6 p.m. Tuesday in the county courthouse on River Street in Wilkes-Barre.

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.