AS directed by HUD, Scranton moving Boscov donation to block grants

April 24--Scranton is putting a $700,000 donation from department store magnate Al Boscov into the city's federal block-grant program for sidewalk curb cuts in road projects, as a federal agency requires.

City council on Thursday introduced an ordinance to formally accept the donation and transfer the funds to the reconstruction of streets with curb cuts for accessibility. Council voted 5-0, with President Bob McGoff and members Pat Rogan, Bill Gaughan, Wayne Evans and Joe Wechsler all in favor of the introduction.

In December, Mr. Boscov gave the city a check for $715,173 to make good on a loan the city had given years ago to the Mall at Steamtown that went unpaid.

Calling the check a donation from Boscov's Department Stores to the city, Mr. Boscov had said he felt obligated to pay the loan back even though neither he nor his company was legally on the hook to do so. The donation was intended to replace a $612,480 missed loan payment that had been owed by former mall owner Steamtown Mall Partners, with which Mr. Boscov was and is affiliated, but that was guaranteed by the city and covered out of its federal block-grant funds. He added in interest.

In mid-2013, Steamtown Mall Partners missed the $600,000-plus payment on the loan, and HUD deducted the amount from the city's block grant funds, officials had said. The city later had to cut various block grants to account for the reduction in the federal funds. The donation was intended to make good on the debt, and the U.S. Department of Housing and Urban Development directed that the donation go back into city's block-grant program.

Last year, the mall's first mortgage holder took possession of the mall through a foreclosure, and the city's loan became "subordinated," meaning it would likely never be repaid. The mall now goes up for auction in June as bondholders who foreclosed seek to cut their losses and unload it.

Mr. Boscov also has said he hopes his firm can regain ownership of the mall. But during council's meeting, Mr. Rogan blamed Mr. Boscov for the mall's problems and said he hopes a new owner takes over. Mr. Rogan also expressed opposition to any idea of a county takeover of the mall to consolidate county government offices and departments under one roof, which he said would remove prime downtown commercial space from the city's tax rolls.

As part of the donation transfer, the city also has to amend its block-grant program. A 30-day public comment period began Wednesday and runs through May 21, according to a public notice the city published in The Times-Tribune.

On another topic, Mr. Rogan expressed frustration that there have been no answers yet from an investigation into the city's double pension "scandal."

In another matter, Mr. Gaughan called for Mayor Bill Courtright, outside consultant Henry Amoroso and city Business Administrator David Bulzoni to attend an upcoming council caucus to give an update on progress of the various initiatives in the city's recovery plan. An update would be timely, now that the city's petition to triple the local services tax was approved earlier Thursday in court, said Mr. Gaughan. He hopes a caucus would address how LST revenue affects the recovery plan and will be allocated, what the mayor's next priorities are, and what's being done to ensure an audit of 2014 is completed on time.

In other matters, council unanimously voted in favor of each of the following:

-- To introduce a resolution authorizing the city to renew a lease of five police-package 2009 motorcycles from Horsepower Harley Davidson Inc. of Williamsport. Under the lease, the city will pay $295 a month from June 1 through May 31, 2016.

-- To introduce a resolution authorizing a $96,500 contract with the firm of Reuther & Bowen of Dunmore for engineering services for the city's 2015 road paving/resurfacing program.

-- To introduce a resolution authorizing a $24,400, two-year seasonal contract with Dunbar'sEvergreen Landscaping of Old Forge for flood-project levee cutting of the South Scranton, Albright, Plot and Green Ridge levees. The seasons run from May 15 through Oct. 31, and May 15, 2016, through Oct. 31, 2016.

-- To adopt a resolution authorizing the city to accept a $2,200 grant from Factory Mutual, an insurance firm, to the Scranton Fire Department for purchase of two professional cameras for the fire inspector's office to photograph fire scenes.

-- To adopt a resolution authorizing a 12-month streetlight maintenance contract with Gene Metschulat Electrical Contractors of Jefferson Twp.

-- To adopt a resolution to hire SB & Co. of Philadelphia to perform the city's annual audits for fiscal 2014 through 2017, at costs of $40,000 for 2014; $42,000 for 2015; $44,000 for 2016; and $46,000 for 2017.

-- To adopt a resolution to hire the firm of Joseph M. Alu and Associates of Scranton for annual audits of the city's Single Tax Office for fiscal 2013 and 2014, at a cost of $32,000 per audit. The $64,000 total is split equally by the city and Scranton School District.

-- To adopt an ordinance creating a special account for receipt of parking-violation revenue from the city's new civilian enforcement program.

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