Wilkes-Barre done with phase 1 of recovery plan; finances still 'fragile'

WILKES-BARRE, Pa. -- As bad as the city's finances are, every little bit helps. And a little bit of help is coming in the form of a $50,000 franchise fee to install cellular antennas on light poles.

City council on Tuesday approved a deal with New Cingular Wireless, PCS, LLC that will raise additional revenue through the monthly site fees and cover the cost of electricity to run the equipment.

Mike Oser, a consultant with AT&T, explained the arrangement as a way to enhance the telecommunications company's cellular network in the city.

"It's a contract between AT&T and you to use your facilities," Oser said.

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The small sites take up some of the capacity of the existing network and allow it to run better, added Joseph Divis, assistant vice president of external affairs for AT&T's Mid-Atlantic region.

AT&T has identified four sites and there's the possibility of adding two more. Each site will pay a $100 monthly fee and $50 a month for electric usage, Oser said.

"If we pay you too much of that $50, it's your. We're not going to ask for it back," Oser said.

The deal isn't exclusive and other companies can do the same for their networks, but not on the same poles where AT&T's antennas are located, Oser said.

The revenues will be a plus for the city's finances, but they won't cover the $2 million increase in the city's debt service next year. That will be taken care of through a debt restructuring plan and corresponding bond issue, with a maximum principal of $52 million, crafted by the PFM Financial Advisors LLC to get the city back on sound financial footing.

The city is participating in the state's Early Intervention Program for struggling municipalities and hired The PFM Group of Philadelphia as its advisor to come up with ways to avoid financial collapse. PFM Financial Advisors comes under The PFM Group's umbrella.

As part of its original $75,000 contract, paid with a $60,000 state grant and $15,000 from the city, The PFM Group was required to deliver a report at the end of phase one of the intervention program. Gordon Mann, director with PFM, presented the non-binding recommendations to the city with the caveat that still more has to be done. The city hired PFM for phase two at a cost of $200,000. Again, most of the money is from the state with the city contributing $20,000 or 10 percent.

Mann told council it has three major issues to deal with this year: contract negotiations with three of the city's four labor unions, the slow growth of the earned income tax and determining what to do with the money-losing trash collection service.

"It will be really important for you to get as good a contract as you can," Mann said, adding that meant savings on wages and benefits.

The city has to find out why the earned income tax, the largest revenue source budgeted at $12.75 million this year, hasn't grown over the years. "It's close to zero (growth)," Mann said.

And the city has to decide on whether it wants to continue to collect trash the way it does. Mann estimated the city loses $1 million a year, the difference between what it pays to pick up garbage and revenue generated through the sale of garbage bags.

He encouraged council and the administration of Mayor Tony George to continue to talk about the problems facing the city in order to come up with solutions.

"Your situation is really fragile. It's better now than it was before the debt issue, but it's really fragile," he said.

Council took a step toward addressing one of the problems -- the reconstruction of damaged sections of the Solomon Creek wall. The project is estimated to cost $4.4 million and will be paid through the bonds yet to be issued.

Council approved a $266,500 contract with Borton-Lawson engineering and architecture for design and management of the project.

In other business, council approved the first of two readings of an ordinance to participate with other municipalities in a stormwater management agreement with the Wyoming Valley Sanitary Authority.

Butch Frati, director of operations for Wilkes-Barre, said its a "monumental task" to comply with the regulations set by the U.S. Environmental Protection Agency. The city was fined $25,000 by the EPA this year for noncompliance with the regulations.

The authority will charge monthly fees to residents in municipalities it serves and the funds will pay for oversight and compliance, Frati said.

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