Health care, pension part of $800,000 owed by Shamokin
SHAMOKIN - Employee pension, health insurance, street lights and legal fees are among the unpaid costs cited by the city as it seeks an emergency loan of $800,000 to pay outstanding bills.
A hearing will be held at 9:15 a.m. Wednesday in Northumberland County Court with a judge ultimately weighing the merits of the city's petition for a 10-year loan to cover its "unfunded debt" for 2013.
Estimates on outstanding bills owed by the city were recently presented to city councilmen.
The largest bill owed is the Minimal Municipal Obligation pension of $220,768.99, due this month. A portion of that includes the state's reimbursement of $116,530.75, which Controller Gary Haddock has said was spent by the city. Related is the payment of $17,661.52 in interest.
There is at least an estimated $100,000 in miscellaneous bills owed to utility companies, vendors and others, plus an estimated $90,000 owed to PPL for street lighting service.
The Benecon Group, the city's former health insurance broker, is owed $102,240 in unpaid bills from September and October. It's requesting an additional $67,000 for breach of contract, Councilman William Strausser said. Another $10,000 is needed to cover employee deductible costs related to the city's new health plan.
A payment of $50,000 is owed for repayment of a Home Investment Partnerships Program (HOME) grant. An
estimated $15,000 is owed to the Barley Snyder law firm, which has worked closely with City Clerk Steve Bartos on matters regarding the Shamokin Creek Channel and a Right To Know legal dispute with Northumberland County Commissioners Stephen Bridy and Vinny Clausi.
Also due is an estimated $19,000 owed to Aqua PA for fire hydrant service and $10,000 in holiday pay owed to city police officers as part of the existing contract with the police union.
Another $50,000 is estimated for the cost to finance the emergency loan while an additional $48,329.49 is being considered for a contingency.
These figures do not include the final payment of $22,976 for the city's Tax and Revenue Anticipation Note (TRAN) taken at the start of 2013, which remains due, according to Haddock.
The insurance payments, MMO, hydrant costs and police holiday pay were all included in the 2013 general fund budget, which totaled $2,558,538.93 and was balanced when adopted in December 2012.
Caught off guard
Councilmen William Milbrand, R. Craig Rhoades and William Strausser all said they knew the city had amassed unpaid bills, but all said they were caught off guard by the $800,000 amount.
Strausser has served in several capacities in City Hall for the past 52 years, much of it as city clerk. He is the current director of accounts and finance, and his term as councilman ends this month.
It's not uncommon for the city to carry year-end debt, but Strausser said he has "never" seen it in such a large amount. He attributed it to increasing insurance costs, saying he'd advise incoming council members to work to "reign in" those costs to the city. He is concerned that the city will lose when a police contract heads to arbitration. A contract for the street department expires in 2014. He believes insurance costs will continue to rise for both contracts.
Asked if he did enough this year to keep watch over city finances, Strausser said, "possibly not."
"It just seems like no matter what we do we can't keep on top of it. Costs keep going up. I pity these new people coming in, I really do," Strausser said.
In his position of controller, generally considered a "watchdog" position, Haddock says he has to do a better job. He said he'd refocus and would communicate his concerns with council members, including during meetings.
"I apologize to the citizens of Shamokin. They deserve better. I feel I left them down," Haddock said.
Rhoades said questions must be asked by council as to how much tax revenue the city is receiving. Treasurer Brenda Scandle told council members present for Wednesday's workshop, which Rhoades was unable to attend, that tax revenue has remained steady.
"We have to figure out what happened. I'm sort of at a loss of words because I don't know where it all came from so suddenly," Rhoades said.
Milbrand said he was aware issues existed, especially when Shamokin was unable to make its payments to Benecon, with the firm ending its contract and forcing the city to scramble and secure a new health plan comparable to the previous one.
"I think possibly we could have been a little bit better watchdogs," he said of the current council.
Pledge by mayor-elect
Time will be needed to discover how the shortfall occurred, Milbrand said. He pledged that in 2014 when he assumes the position of mayor, he will pay particular attention to fiscal oversight.
"I want every council member to know where we stand on every issue at all times, not just one or two," Milbrand said.
City council not only has to worry about paying outstanding bills in 2013, it has to work on erasing a projected $616,081.57 deficit for the 2014 general fund. A preliminary plan available to the public has revenues projected at $2,316,506.01 and expenses projected at $2,932,587.58.
A second hearing in county court will be held at 2:30 p.m. Dec. 19 with the city seeking a judge's approval to keep the real estate tax assessed at 30 mills, 5 mills above the maximum allowed by law. That approval has been granted in each of the past five years.
A meeting is scheduled for 6 p.m. Dec. 30 at City Hall to vote on a final budget. Special public meetings on the budget are scheduled for 6 p.m. Thursday and Dec. 18.
The next regular monthly meeting of city council will be held at 7 p.m. Monday.