There was some drama at the Scranton City Council meeting on Thursday. The gathering took on added importance, given the city’s financial issues.
One week ago city council voted to not release funds to Scranton’s Parking Authority and throw the authority into default.
Thursday night council took the first step toward releasing the funds after fears the city could slide into a financial pit.
Scranton City Council’s decision last week not to release money for a debt payment for the Scranton Parking Authority put the authority into what is called an event of default. On Thursday council voted to once again take up the issue of making that debt payment but that comes with a catch.
Council solicitor Boyd Hughes called the parking authority budget fictitious, a fallacy, a train wreck waiting to happen and apparently he’s not alone. Hughes provided letters from the bank that holds the authority’s bond and the insurance company that insures it.
Those two entities have a list of demands including new audits and revised budget figures from the parking authority to show how it will pay its debt and those demands are required to be complied with in 30 days.
Solicitor Hughes said in his view there is no way the parking authority will be able to comply with those demands in 30 days. That will mean the bank and insurance company will then appoint a receiver to come in and take over the operations of the parking authority. That could mean possibly selling off some assets and in council’s words, righting the financial ship.
“These are requirements that are required under the trust agreement that the parking authority has hardly ever complied with. So now if they don’t do it in 29 days from today what’s going to happen is the event of default will become a default and at that point the trustee and insurance company can come in and have a receiver appointed to take over the facilities and run them,” said Hughes.
Hughes also said the parking authority board and executive director could do everyone a favor by voting to let the receiver take over its operations immediately because in 29 days the bank and the insurance company will come in and do it by force.