Shamokin Seeks ‘Early Intervention’ [News – Item, The (PA)]

SHAMOKIN - The City of Shamokin has again turned to the state to help stabilize its finances.

An application is pending with Department of Community and Economic Development (DCED) for re-entry into the Early Intervention Program, intended to ensure municipalities are stable and solvent. Financial consultation services for enrollees are paid with a matching grant.

Shamokin was first accepted into Early Intervention in 2008 and completed two phases of the program.

"We are still reviewing the application and they have gone through the first two phases. They are going to another phase, but we don't have any information other than that," DCED press aide Edward Jordan said Monday. Jordan said more details would be available once the application review process is completed.

City owes $104K for insurance

The city's cash flow appears to have led to the termination of its relationship with the Pennsylvania Municipal Health Insurance Cooperative (PMHIC) through which it purchased employee health insurance. The cooperative's broker, The Benecon Group, says the city owes $104,000 from September and October, and will revoke its PMHIC membership beginning Friday.

According to a press release, 33 city employees were enrolled in PMHIC. A city official put total enrollment at 87 people.

But city employees remain insured, according to the mayor, city council members and the city clerk. A payment of $48,718.58 was made recently for the month of November to the insurance provider, Capital BlueCross, and coverage remains unchanged, they said. Another payment is due in December.

A Right to Know request by The News-Item for additional details on the invoice and payment is pending at City Hall.

Councilman William Strausser, accounts and finances director, said "money came in" to pay the bill and the city did not have to transfer money from another account or use funds allocated for an annual pension payment.

Tough time of year

That the city's coffers are tight this time of year is nothing new. The fourth quarter consistently proves tough, officials have long said.

Councilman Michael Snyder has been on council eight years. "All eight years, we get late on paying vendors and everything this time of year until we get to Jan. 1. We got a whole bunch of bills to pay to get caught up on, so it puts us behind that year," he said.

The mayor said money issues don't only crop up in the fourth quarter, it's an issue throughout the year.

"It's always the skin of your teeth; week to week, month to month. It's been this way," Mayor George Rozinskie said.

If a windfall in personal and property taxes isn't realized in the fourth quarter, Strausser estimates the city could be short at least $200,000.

Emergency demoOfficials were light on specifics on what out-of-budget expenses this year contributed to a shortage, but they all agreed on one expense: the emergency demolition from 2012 on North Shamokin Street. More than $100,000 was paid to various contractors earlier this year to cover the related costs.

Help is on the way, however. Jordan confirmed Wednesday that the city's application for another grant through DCED, a Keystone Opportunities Grant, has been accepted. It's unclear how much it will be, but city officials believe it should be enough to reimburse what has already been paid to the contractors.

When the city enrolled in the program in 2008, it avoided being labeled a financially distressed municipality and the state's financial oversight that comes with it. Shamokin completed Phase I in 2008 and Phase II in 2009.

Pennsylvania Economy League was hired to create a five-year financial review and analysis for the city. Officials followed several recommendations, among them: outstanding loans were refinanced, insurance costs were reviewed and lowered, additional tax revenue was generated through five consecutive petitions of Northumberland County Court to increase the real estate tax by 5 mills above the maximum allowed by law.

"It worked to the point that we stayed afloat," Strausser said. "We were able to meet our bills. That's what we're trying to do this time."

DCED officials were at City Hall on Monday to speak with employees about the latest application.

Long-term plans

City Clerk Steve Bartos said Shamokin has faced a structural deficit of its finances for the past nine years. He expects participation in the program will lead to a long-term financial plan. The next city council would have to decide whether or not to act on the recommendations, he said.

"My goal is to give the taxpayers and the people of the area the opportunity to get the city out of this problem," Bartos said.

Strausser expects the city to meet its remaining bond obligations and pay off a Tax and Revenue Anticipation Note (TRAN) it customarily takes at the beginning of each year. The TRAN totaled $275,000 in 2013 and Controller Gary Haddock estimates $69,120 remains to be paid. It's used by many municipalities to cover first- quarter debt ahead of the payment of tax bills.

In addition to the TRAN, Haddock said the city owes $66,200.72 for debt payments and $50,000 related to a previous state and federal grant issue where $500,000-plus is to be repaid. This year's Minimal Municipal Obligation is $220,768.99, he said, more than half of which has already been paid to the city by the state to assist in meeting the pension plan expense, due in December.

Tax base eroding

The city's tax base is eroding and collection is lagging. The collection rates for 2013 and 2012 isn't known. It was reported at 76 percent in 2011, down from 82 percent in 2010.

"You try to do the best you can, you just don't have the money coming in," Rozinskie said.

If it were 90 percent, Strausser said the city would be healthy financially. He wasn't sure what the collection rate would be this year but hoped it's above 70 percent, even if that is a low number.

"I just hope we can get through the end of the year," he said.