The mayor of Scranton, Pa., sued the City Council on Thursday. He wants a judge to force the council to adopt a financial recovery plan that he says is crucial to obtaining a bank loan to pay past-due bills and make payroll.
The city is down to roughly its last $360,000, although it was able make mid-month payroll.
In a filing with the Lackawanna County Court of Common Pleas, Mayor Chris Doherty said the lack of a plan under the state-sponsored Act 47 program for distressed communities is scaring away lenders, notably M&T Bank.
“Business administrator [Ryan McGowan’s] efforts to procure interest from the lending community have been unsuccessful due to the fact that the city does not have a revised recovery plan,” city solicitor Paul Kelly said in Thursday’s filing on behalf of Doherty.
The council two weeks ago, in a 2-2 tie vote, defeated Doherty’s latest recovery plan, which called for a 78% property tax increase over three years. The council has yet to produce one of its own.
Additionally, the Scranton Parking Authority was late with a $1 million bond payment, due June 1, for which the council held up payment until June 14. The city is the guarantor of those bonds.
Doherty is looking to sell $16 million of bonds to make payroll and settle $3.5 million of past-due accounts. Vendors with claims include Blue Cross-Blue Shield of Northeastern Pennsylvania, which is owed $2 million has threatened to end its health care contract; Dunmore Oil Co., which provides fuel for the city’s police, fire and public works vehicles; Keystone Sanitary Landfill Inc., which has threatened to require advance payments; and Pennsylvania American Water, which has warned of a shutoff.
“Immediate and irreparable harm will be sustained by the city,” the filing said.
The legal action is the latest volley between the mayor and the five-member council, four of which have continuously opposed Doherty’s proposals since January 2010. The lawsuit named the council collectively as well as members Janet Evans, Frank Joyce, Patrick Rogan and Jack Loscombe as defendants.
Robert McGoff, the mayor’s lone supporter, is not a defendant.
The council on Thursday night did not discuss the lawsuit. Its solicitor, Boyd Hughes, said they should read the legal document first. It did, however, approve a $50,000 payment to Dunmore, leaving it $90,000 in arrears to the oil company. The city has $360,000 left after additional tax collections.
The council did accept a $5 million federal grant to rehire 30 firefighters. Doherty rejected the full $8.2 amount under the Department of Homeland Security’s Staffing for Adequate Fire and Emergency Response, or Safer, grant that would have paid for rehiring 29 laid-off firefighters and adding 20 new ones for two years.
Doherty had said the city could not afford to pay unemployment benefits after their layoffs in two years.