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Department of Education caught making student loan miscalculation

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Happy birthday to Eva and Ashlyn Waligorski!

<p>WILKES-BARRE &#8212; The slow pace in deciding how to refinance debt and pay for repairs to the Solomon Creek wall could prove costly to the city, Mayor Tony George said Tuesday.</p><p>Public Financial Management Inc., the consultant hired by the city to develop a five-year financial plan, has to wait until there&#8217;s a decision on the bond package dealing with the debt and repairs.</p><p>&#8220;They&#8217;re stymied now,&#8221; George said.</p><p>The city is losing valuable time with the delay and also faces the possibility of added costs to the bond deal with the Federal Reserve expected to raise interest rates three times this year.</p><p>The mayor referenced a New York Times article about the rate hikes as he pressed city council on Feb. 15 for urgent action. Council responded, but not in the way George and his administration preferred.</p><p>&#8220;It&#8217;s just for two years. I&#8217;m looking for long term (refinancing),&#8221; George said.</p><p>On Feb. 23 by a 3-2 vote city council approved the first of two readings of an ordinance to refinance a portion of the $86.2 million debt and issue a$5.5 million bond for the infrastructure construction. The issue might not be resolved at the next council meeting on March 9 because not all five elected members will be present, the mayor said.</p><p>The package deal before council involves a two-year &#8220;scoop and toss&#8221; of annual debt service payments that temporarily lowers the amounts the city pays. The payment this year would drop to $5.1 million from $5.4 million and even lower to $4.9 million from $7.6 million in 2018.</p><p>But the savings catch up to the city as they are tossed down the road in the form of higher payments. In 2019 and 2020, the city will owe $8 million each year. The debt service decreases to $7.9 million in 2021 and drops annually, ending with a final payment of $1.7 million in 2036.</p><p>George said the city will be back asking for another refinancing next year to lower the payments in 2019. He&#8217;s made it known he supports a package deal that includes the bond for the wall repairs and restructures the debt payments to an affordable amount, trimming $2 million from the more than $7 million owed over the next 10 years.</p><p>&#8220;We have no contingency funds,&#8221; George said.</p><p>The city doesn&#8217;t save any money in the long term, and the debt increases by $40 million. But the deal favored by the mayor provides the cash flow the city needs to operate at an annual debt service of $5.7 million until 2038. The payment drops to $1 million in 2039.</p><p>The bond deals and the strategic plan from PFM are steps George said he&#8217;s taking to keep the city from being designated distressed under Act 47 that comes with strict financial oversight by the state. The city is operating on a $47.1 million general fund budget balanced with the help of a property tax hike. But it&#8217;s being strained by a deficit estimated at between $1 million and $1.5 million from the previous administration, George said.</p><p>&#8220;I don&#8217;t want to leave the city like I got it,&#8221; George said.</p><p><ins>For other local news stories, <a href="https://www.timesleader.com/category/local" target="_blank">click here</a>.</ins></p><style>
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<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 @TLNews</p></shirttailMeta></div>

Delay on refinancing, Solomon Creek wall could be costly for Wilkes-Barre