From The Times Tribune.
Scranton is closing in on borrowing $21 million needed to provide funds to close out 2012 and cover the city’s final payroll of this year on Dec. 23, city Business Administrator Ryan McGowan said Tuesday.
The city has been negotiating a $21 million bond issuance with the financial firm Janney Montgomery Scott of Philadelphia and expects to close on it within two weeks, he said.
“We’re hopefully in the final stages of completing something in the next 10 to 12 days,” Mr. McGowan said.
This borrowing is the latest debt to stem from the financially distressed city’s ongoing woes. In the summer, the city nearly went broke and its cash-crunch crisis led to a minimum-wage payday and court battles with employee unions. By late August into September, the city got some breathing room through a state loan/grant package and a short-term tax-anticipation note from a union-owned bank, Amalgamated Bank of New York and Washington, D.C.
As that funding ran out, the city in October secured an $11.32 million bond issue that allowed the financially distressed city to cover overdue bills and payrolls, including Friday’s payday, Mr. McGowan said. That bond package, also issued through Janney, comprised $9.85 million in unfunded debt approved by a court in January and $1.47 million in refinancing. This $11.32 million bond issuance had an interest rate of 8.9 percent and will be paid back over 10 years.
But wait, there’s more!
From The Times Leader.
Despite the objection of two residents,Â cityÂ councilÂ on Tuesday approved an ordinance that will allow the city to float just more than $5 million inÂ bondsÂ to pay for energy efficiency upgrades to various infrastructures.
The bond issue, which is expected to be completed by yearâ€™s end, clears the way for the city to proceed with a $5.9 million contract with Johnson Controls that calls for a wide range of improvements city officials say will save millions ofÂ dollarsÂ in energy costs.
Council approved the ordinance by a 4-1 vote, with CouncilmanÂ TonyÂ GeorgeÂ casting the dissenting vote. George said he has concerns about incurring an additional $5 million in debt given the city has not yet passed a budget and has laid off workers.
â€śWeâ€™re going out and borrowing $5 million when weâ€™re laying off firefighters,â€ť George said, referring the recent furlough of 11 firefighters.
George wanted to table the motion so council could study the issue more, but Mayor Tom Leighton pressed for a vote Tuesday, noting theÂ interestÂ rateÂ the city will pay would likely increase significantly if the bond issue was not completed by the end of the year.
If you think that this is exclusive to Scranton think again. WB is doing it’s best to get just as deep in debt.
From The Times Leader.
City officials say a $5.9 million contract with Johnson Controls to improve energy efficiency will save nearly $11 million in energyÂ costsÂ over 20 years, but a review of the agreement shows just $3.9 million of thosesavingsÂ are guaranteed.
The contract, which was approved by council in September, also includes language favorable to Johnson Controls that could allow the company to avoid directlyÂ payingÂ the guaranteed savings should actual numbers fall short of the projections, and to recoupÂ moneyÂ if thereâ€™s ever a surplus.
Council on Tuesday voted 4-1 to approve an ordinance to float general municipalÂ bondsÂ totaling $5,065,000 to pay the bulk of the project cost. That clears the way for the project to proceed.
The project calls for a wide range of infrastructure improvements ranging from the installation of energy efficient streetlightÂ fixturesÂ to new toilets in various buildings and the construction of an irrigation system at Hollenback golf course.
Just how much money the city will actually save remains unclear, however. The total cost of the bonds over 13 years, with interest, will be $6,384,055.
According to the contract, Johnson Controls guarantees the city will save at least $3,918,312 in energy costs over 20 years, but the achievement of an additional $7,045,534 in savings projected by the city are not guaranteed.