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<p>WILKES-BARRE &#8212; City council Thursday night approved a debt restructuring deal long sought by the administration to avoid a looming financial meltdown and fix crumbling sections of the Solomon Creek wall.</p><p>The 3-2 vote gave the go-ahead for a bond issue designed to lower debt service payments and provide the funds to cover the wall project estimated to cost $4.4 million. But the deal comes at a substantial price of more than $37 million in added debt, according to the most recent scenario from the city&#8217;s consultant PFM Financial Advisors LLC.</p><p>&#8220;This is something we needed to do,&#8221; Ted Wampole, city administrator, said after the vote. &#8220;What this does it just gives us that relief on the cash flow going into 2018 that will make budgeting a little easier. But there&#8217;s still some extremely difficult decisions (to make).&#8221;</p><p>A few residents spoke against the deal, including Sam Troy. He asked that the vote be tabled so council could give it more thought.</p><p>&#8220;This is going to set the wheels in motion for very drastic consequences for the city,&#8221; Troy said.</p><p>The vote, the second of two readings of an ordinance that set a maximum principal of $52 million on the bonds, came four months after council first tackled the issue in January. Along the way, the mayor pressed for approval of a long-term deal to reduce the debt service that would jump by $2.1 million next year. Council went back and forth on options presented by PFM before settling on a measure acceptable to the administration.</p><p>As they did last month for the first reading, councilmen Bill Barrett, Mike Belusko and vice chairman Tony Brooks supported the ordinance. Council chairwoman Beth Gilbert and councilman Mike Merritt opposed it.</p><p>&#8220;The debt is the debt. It&#8217;s not going away,&#8221; Barrett said, explaining his vote. To do nothing would be irresponsible, he said.</p><p>Brooks said he studied the issue and was first in favor of a short-term deal. But over the course of the debate, he switched to the long-term option and explained it came down to choosing between debt and tax increases.</p><p>&#8220;I will choose the debt,&#8221; Brooks said.</p><p>Gilbert said she was in favor of fixing the wall. &#8220;Anything above that I can&#8217;t justify,&#8221; she said, urging the administration to cut expenses and increase revenues.</p><p>She questioned why the administration chose the law firm of Cozen O&#8217;Connor as bond counsel and whether the $90,000 was reasonable. The cost was lower for previous refinancings handled by a different firm, she noted.</p><p>Wampole said the delay in approving a deal added between $20,000 and $30,000 and the overall closing costs were still lower than the average rate of 2 percent.</p><p>The timeline for the bond issue has the settlement occurring the week of June 19 and the city receiving funds at some future point.</p><p>As hard as it was to pass the ordinance for the restructuring, there&#8217;s even harder work to follow, Wampole said.</p><p>&#8220;When we look at potential sources of revenue and some areas that we can cut, there will be very difficult decisions that we&#8217;re going to need the cooperation of council,&#8221; he said.</p><p>The city will not be forced to seek distressed status under the state&#8217;s Act 47 now that the bond issue was approved, he said. The state won&#8217;t come in and essentially control the city&#8217;s finances, he added.</p><p>However, the city will continue to participate in the state&#8217;s Early Intervention Program with assistance from PFM.</p><p>Wampole said another state grant up to $200,000 is expected to fund the second phase of the program. The city must come up with a 10 percent match.</p><p>&#8220;We&#8217;re pretty optimistic with what we&#8217;re hearing,&#8221; that the state Department of Community and Economic Development will award the grant, Wampole said. DCED came through with a $60,000 grant last year for the program. The city contributed $15,000 toward it to pay PFM.</p><p>Don Lucy offered some unsolicited help reducing expenses with the city&#8217;s landfill disposal fees.</p><p>&#8220;You&#8217;re throwing away your tax money with your trash,&#8221; said Lucy, representing Waste Management and the Alliance Landfill in Taylor, Lackawanna County.</p><p>He said Waste Management approached the city a number of times in the past and again asked that it consider bidding out the service.</p><p>Wampole replied the city is in the process of putting together bid terms.</p><style>
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<div class="metaInfo"><subheadMeta>Deal frees up cash for next year,includes Solomon Creek wall fixes</subheadMeta></div><div class="metaInfo"><bylineMeta><p>By Jerry Lynott</p><p>jlynott@www.timesleader.com</p></bylineMeta></div><div class="metaInfo"><factboxMeta><p><strong>HOW IT HAPPENED</strong></p><p><strong>Jan. 26</strong> - City council tabled a vote on a bond issue that would restructure most of the city&#8217;s debt and pay for replacing damaged sections of the Solomon Creek wall. It asked the city financial adviser, The PFM Group, to provide less costly options.</p><p><strong>Feb. 2</strong> - The city&#8217;s financial adviser presented a series of options on restructuring bonds and borrowing $5.5 million to pay for the Solomon Creek project.</p><p><strong>Feb. 9</strong> - Working shorthanded, council failed to get the three votes needed to advance a proposal the administration pitched as a solution to address the two pressing problems of finances and the crumbling wall along Solomon Creek. Councilmen Bill Barrett voted for the proposal on its first of two readings, but council chairwoman Beth Gilbert abstained.</p><p><strong>Feb. 23</strong> - By a 3-2 vote, council moved the Solomon Creek wall repair and a debt restructuring deal a step closer. Council approved the first reading of a bond issue to refinance a portion of the debt for just two years. Councilmen Barrett, Mike Belusko and Mike Merritt supported the measure. Gilbert and council vice chairman Tony Brooks opposed it.</p><p><strong>April 20</strong> &#8211; Once again, the vote was 3-2 vote in favor of a bond issue to provide financial relief to the city. But this time it was for a totally new plan to restructure debt in the long term and fund the Solomon Creek project estimated to cost $4.4 million, a more than $2 million drop from the original estimate. The delay in approving the short-term deal and the tabled vote still hanging forced the administration to start over with updated figures. New versions of both packages were on the table for council to consider. Barrett, Belusko and Brooks cast &#8220;Yes&#8221; votes in the first reading. Gilbert and Merritt vote &#8220;No.&#8221;</p></factboxMeta></div><div class="metaInfo"><shirttailMeta><p>Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.</p></shirttailMeta></div>

Wilkes-Barre city council approves bond issue to shore up finances