web1_IM8_P_RyanAshley_0020.jpg

Ryan Malarkey, of Shavertown, wins Ink Master title, $100,000 in New York

web1_TTL1200716ShopforaCauseCMYK.jpg

‘Shop for a Cause’ raises funds to fight childhood hunger

<p>WILKES-BARRE &#8212; The city&#8217;s financial consultant painted a bleak picture Tuesday night of multimillion-dollar deficits within the next five years if nothing is done to increase revenues and control expenses.</p><p>But that&#8217;s not likely to happen, if judging only by the fact the city hired The PFM Group as part of its participation in the state&#8217;s Early Intervention Plan to assist municipalities facing financial difficulties. The city received a $60,000 grant from the state and will contribute the remaining $15,000 to pay PFM.</p><p>Gordon Mann, director of Philadelphia-based PFM, put the role of the city front and center as he presented a draft look at the city&#8217;s finances and offered baseline projections through 2021.</p><p>&#8220;Government doesn&#8217;t exist to make money,&#8221; Mann said. &#8220;What government does is it provides services to people.&#8221;</p><p>But without sufficient finances, he reminded council, Wilkes-Barre will not be able to provide police and fire protection, garbage pickup, and the rest of the services expected by the residents and general public.</p><p>PFM, which played a similar role in the city in 2004 before the state Department of Community and Economic Development introduced the intervention plan, is halfway through its a four-part program to review the numbers and come up with recommendations to strengthen the finances.</p><p>&#8220;The baseline projection has one basic concept behind it, which is, &#8216;What happens if we do nothing?&#8217;&#8221; Mann said.</p><p>The projection assumed no cut in services and no property tax increase beyond the 30 mills proposed by Mayor Tony George next year in his $47.9 million balanced budget.</p><p>Even with that hike, PFM projected there would be small deficit of $256,077 in 2017 that will balloon to $4.6 million the following year. It will keep increasing as revenue growth remains stagnant and expenses for salaries, health benefits, debt service and pensions mount.</p><p>The deficit trajectory, according to PFM, is:</p><p>&#8226; $5.9 million in 2019.</p><p>&#8226; $6.7 million in 2020.</p><p>&#8226; $7.5 million in 2021.</p><p>In 2015, the city recorded a deficit of $1.2 million. But it tapped its reserves, leaving a reserve balance of $5.4 million that will remain unchanged this year if the $51.5 million balanced budget of former Mayor Tom Leighton holds.</p><p>As the deficit increases, the city&#8217;s reserve fund depletes by 2019, according to PFM.</p><p>Mann pointed out the city&#8217;s payment for long-term debt or previous bond issues to cover expenses and projects will drop next year to $5.3 million from the $8 million budgeted. But the decrease is temporary.</p><p>&#8220;In (2018) it goes up to around $7 million, and it stays there for the next decade,&#8221; he said. &#8220;It&#8217;s $7.4 million until 2027 when it drops to $3.5 million. So that&#8217;s a big number.&#8221;</p><p>The city also is paying out revenues to cover legacy costs such as pensions of retired employees and capital projects. &#8220;About $1 of every $4 goes to yesterday,&#8221; Mann said. &#8220;So it&#8217;s not available for today, and it&#8217;s not available for tomorrow. That&#8217;s a big percentage.&#8221;</p><p>David Unkovic, of the law firm McNees Wallace and Nurick that&#8217;s assisting PFM, suggested some potential cost-control measures for the city to examine, including outsourcing, subcontracting, and reviewing its organizational structure and purchasing procedures.</p><p>The final recommendations won&#8217;t come until next year, Mann added, after city council has time to digest the introductory projections.</p><p>&#8220;Don&#8217;t despair,&#8221; Mann told council. No decisions have to be made immediately, he said. &#8220;We do have some time.&#8221;</p><style>
.neFileBlock {
	margin-bottom: 20px;
}
.neFileBlock p {
	margin: 0px 0px 0px 0px;
}
.neFileBlock .neFile {
	border-bottom: 1px dotted #aaa;
	padding-bottom: 5px;
	padding-top: 10px;
}
.neFileBlock .neCaption {
	font-size: 85%;
}
</style>
<div class='neFileBlock'>
<div class="neFile"><img class="neImage" src="https://www.timesleader.com/wp-content/uploads/2016/12/web1_web1_mayorgeorge-1.jpg">
<div class="neCaption"></div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2016/12/web1_web1_mayorgeorge-1.jpg</photo0><caption0></caption0><photoCredit0></photoCredit0></div></div>
<div class="metaInfo"><subheadMeta>If nothing done, consultant says city deficit to balloon</subheadMeta></div><div class="metaInfo"><bylineMeta><p>By Jerry Lynott</p><p>jlynott@www.timesleader.com</p></bylineMeta></div><div class="metaInfo"><shirttailMeta><p>Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott</p></shirttailMeta></div>

Outlook on Wilkes-Barre finances bleak if nothing done, consultant tells city council