'87 Case Changed Courts' Attitude

2 Locals Charged In Philly Bomb Threats 
Justin Seersma Of Wilkes-barre And James Alan Moore Of Hazleton Were Arrested
In Two Separate Incidents.

By KASIA KOPEC kkopec@leader.net
 Thursday, January 15, 2004 &nbsp;&nbsp;&nbsp;&nbsp;Page: 1A 





WILKES-BARRE - Council unanimously approved the first reading of an
ordinance authorizing Mayor Tom Leighton to pursue a $4 million bond issue
aimed at buying the city time to get its financial house in order. &nbsp;&nbsp;&nbsp; 
 Proceeds from the bond would be used to pay this year's bills, including a
$3.5 million payment due March 1. &nbsp;&nbsp;&nbsp; Leighton said that without the bond money the city would be hard-pressed to
meet its obligations. ``We're faced with debt we can't afford. It's not new
debt, but this is a problem we have to address now. It probably should have
been addressed years ago.'' &nbsp;&nbsp;&nbsp; 
 Louis Verdelli, a financial consultant with PFM Group, the Harrisburg-based
firm hired to help the city get out of the red, said restructuring this year's
debt is the first step in a long journey. ``This will buy the city some time
and provide some short term financial relief so we can get to work on a plan
for long-term financial recovery.'' &nbsp;&nbsp;&nbsp; 
 The restructuring plan calls for the $4 million owed this year to be pushed
off until 2015, when the city's debt is significantly lower. &nbsp;&nbsp;&nbsp; 
 It will cost in excess of $420,000 for the city to implement the
restructuring plan, including a $270,000 present value increase payable during
the next 11 years. &nbsp;&nbsp;&nbsp; 
 The balance of the associated fees is related to bond-insurance premiums
totalling about $150,000. The $150,000 includes about $75,000 in higher
premium charges the city expects to be charged by AMBAC, its bond-insurer, as
a result of a failure to make a bond payment on the call center in December
2002. &nbsp;&nbsp;&nbsp; 
 Leighton, Finance Officer John Koval and PFM representatives will meet with
AMBAC in New York next Thursday. The mayor said his team is going to try to
convince AMBAC that a real turnaround is in the works. &nbsp;&nbsp;&nbsp; 
 ``We need to prove to them that we're on our way back and that we're
committed to the kind of fiscal responsibility that has been lacking in the
past.'' &nbsp;&nbsp;&nbsp; 
 After Leighton's presentation and questions from council, resident Walter
Griffiths asked why it is necessary to take out a bond issue when the city
just took out a $4 million tax anticipation note. &nbsp;&nbsp;&nbsp; 
 The question and suggestion drew criticism from the mayor, who challenged
Griffiths to come up with another solution. &nbsp;&nbsp;&nbsp; 
 ``I respect this gentleman's opinion, but he's clueless,'' Leighton said.
``Do you know how much is due this year? $4.2 million. $4.2 million!'' &nbsp;&nbsp;&nbsp; 
 Councilman Mike McGinley, who has been working with Leighton and PFM for
months to develop a turnaround plan, interrupted the exchange. &nbsp;&nbsp;&nbsp; 
 He told Griffiths, who wanted council to table its vote until after
Leighton presented his 2004 budget, that the city could not wait. &nbsp;&nbsp;&nbsp; 
 ``This has to be done now,'' McGinley said. ``The mayor can't even present
an honest, realistic budget without this in place. With the bond in place, we
take $4 million out of the budget - that's $4 million the mayor won't have to
worry about.'' &nbsp;&nbsp;&nbsp; 
 A second reading of the bond ordinance is expected to be held in the next
week, but no date has been set. &nbsp;&nbsp;&nbsp; 
 A bond sale, at which the city can lock in its rate, is expected Feb. 3. &nbsp;&nbsp;&nbsp; 
 Verdelli estimated the rate will be somewhere around 5.5 percent, a rate he
described as very attractive. ``If you have to do something like this, you
couldn't have picked a better time.'' &nbsp;&nbsp;&nbsp; 
 Kasia Kopec, a Times Leader staff writer, may be reached at 970-7436. &nbsp;&nbsp;&nbsp; 
 CUTLINE: &nbsp;&nbsp;&nbsp; 
 TIMES LEADER STAFF PHOTO/DON CAREY &nbsp;&nbsp;&nbsp; 
 Wilkes-Barre Mayor Tom Leighton responds to a question from resident Walter
Griffiths, who wanted to know why the city is planning to take out a $4
million bond issue when it just took out a $4 million tax anticipation note.
Leighton told Griffiths, and others attending a special meeting Wednesday
afternoon, that the city faces debts it can't afford and the bond issue is
needed to help meet those obligations. &nbsp;&nbsp;&nbsp; 
 &nbsp;&nbsp;&nbsp;

$4 Million W-b Bond Gets 1st Ok Mayor Tom Leighton Says The Money Is Needed To Pay This Year's Bills.