Courtesy of Mish.
It is really disheartening to watch Scranton public officials make matters worse for city taxpayers.
I spoke about Scranton a couple days ago in Moody’s Warns of Scranton Bankruptcy; Fitch Downgrades Chicago Citing Pension Problems; Liberal Fantasyland.
Here is a synopsis of the details.
- Scranton has more than $195 million in outstanding debt, according to Moody’s.
- Scranton also faces more than $100 million in unfunded pension debt, on top of the $195 million in other debt owed.
- Adding to Scranton’s financial woes is the need to borrow another $28 million to pay a court-mandated settlement with the city’s police and firefighter unions.
Unsolvable Mess
That is an unsolvable mess, except by shedding pension and other obligations in bankruptcy.
Meanwhile, the problem just got worse (how could it not), and city officials still do not see the light.
City Unlikely to Make Required Payment to Pension Fund
The Times-Tribue reports Scranton Unlikely to Make Required Payment to Pension Fund.
It’s unlikely Scranton will make the required $6.3 million contribution to its pension plans by the end of the year, meaning city taxpayers will have to pay an additional $504,000 in interest into the composite pension fund.
The city has until Dec. 31 to make the payment, but its failure to secure a $27 million loan that’s earmarked to pay that debt and a $21 million back-pay award to firefighters and police officers leaves little chance it can make good on the payment, Larry Durkin, solicitor for the city’s composite pension board, told members Wednesday. The board represents the police, fire and non-uniform pension plans.
Mr. Durkin sent a letter to city officials on Tuesday, reminding them of the urgent nature of the matter.
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