Satisfied with an overhaul of the city parking authority, the Scranton, Pa., City Council voted unanimously to cover part of an authority bond payment due Saturday.
Acting on an emergency basis on Thursday night, the council transferred $325,000 from a contingency fund to cover about one-third of the Scranton Parking Authority's $930,000 payment. According to the Times-Tribune of Scranton, the authority had the balance, which local banks wired to the authority's bond trustee Wells Fargo.
On June 1, the council forced the authority into default by refusing to cover a $1 million bond payment. It covered the payment later that month, but the default triggered a backlash in the capital markets that has left 77,000-population Scranton unable to borrow.
An overhaul at the parking authority has resulted in the removal of director Robert Scopelliti. Former Lackawanna County Commissioner Mike Washo, per court order, is running the city garages as a receiver. In addition, the council is about to terminate its 17-year parking-meter agreement with the city.
Meanwhile, the council plans to seek court approval for nearly $10 million in borrowing, which the city hopes to finalize by Sept. 30. It needs to borrow about $20 million overall to cover a budget gap.
Late last month, Scranton closed on a deal with union-owned Amalgamated Bank to borrow $6.25 million in tax anticipation notes, which covered payroll and some past-due bills.
Gary Lewis, a private-sector financial consultant and Scranton resident, sees his city still in deep trouble.
"The city's recent actions only serve to underscore the size and scope of the crisis. Thanks to the tax anticipation note, we now have absolutely no revenue with which to operate for the remainder of 2012," he said. "The City Council and the administration have decided to play a high stakes game of chicken. Regardless of which side scores the political win, the taxpayers will lose."
A message was left with Mayor Chris Doherty seeking comment.