Lackawanna County to receive $5.4 million in pension, firefighter relief funds

Oct. 20--Towns in Lackawanna and Luzerne counties received $12 million as part of a $316.5 million statewide aid package for municipal pension funds and volunteer firefighter relief associations.

Lackawanna County municipalities received a combined $5.39 million and Luzerne County, $6.6 million, according to a Monday news release from state Auditor General Eugene DePasquale's office.The funding

, distributed annually since 1984 by the auditor general, is used to help municipalities pay their yearly retirement plan obligations as well as to provide volunteer fire companies with equipment and training. The package, established by Act 205, is fueled by a 2 percent tax on casualty and fire insurance premiums paid to out-of-state companies, and each town's allotment corresponds with its residents' payments to those out-of-state insurers.

Firefighter relief organizations, which handle the funds for their departments, must abide by some restrictions when spending the money.

"Basically, the way the money is going to be distributed is for anything that has to do with the safety and health with any of your firefighters," said Eagle Hose Company No. 1 President Thomas "T.R." Homenchak.

Eagle Hose Company in Dickson City received $41,490, about $2,500 less than last year. All together, volunteer fire companies received $756,212 this year.

The bulk of Eagle Hose Company's allotment pays for accidental death and dismemberment insurance, volunteer firefighters' relief association president Rich Chowanec said.

The rest can pay for things like training, airpacks, tools for the rescue truck and firefighter pants and jackets, which are expensive and tend to get worn out or destroyed quickly, Mr. Homenchak said.

"We rely on it fully," Mr. Homenchak said of the yearly allotment. "One fire sometimes you can wipe out $10,000 to $12,000 worth of gear."

Funding for the county's pensions totaled $4.64 million, with Scranton receiving the lion's share of it.

Scranton received slightly more than $3 million to pay toward its pension contribution, known as the minimum municipal obligation, or MMO. Although the anticipated money helps, it only goes so far.

Scranton has the most-severely distressed pension system in the state, and its MMO next year is rising 12 percent to $18.7 million. To make matters worse, provisions under the city's Act 44 distressed pensions status allow for a 25 percent break in paying its full MMO expire after next year.

"The state aid is a component of what your total minimum municipal obligation is, so certainly in that regard it's helpful," city business administrator David Bulzoni said. "(But) it is only a percentage of what that total is."

Scranton is not alone in its struggle to meet pension obligations. In January, the auditor general reported that 500 programs in Pennsylvania face some type of fiscal turmoil because of debt. He said that, while Harrisburg should consider increasing support, throwing cash at inefficient pensions is foolhardy.

"There's no question that one of the reforms that needs to be closely examined is the whole funding formula for some of the cities such as Scranton where the state aid is not enough," he said.

There must be administrative reform statewide, he said. Too many fund managers, inflated assumptions on rates of return and not enough money paid into the system are just some of the issues needing attention, he added.

"I don't think just more money in and of itself is the solution, in fact I would say that's not the solution," he said.

Contact the writer: [email protected], @jon_oc on Twitter

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