At most, Luzerne County is entitled to $1.58 million from an expiring tax-break program — significantly less than the $3 million some county council members had unsuccessfully tried to budget for 2017, according to recent public discussions.

The money is from a Tax Incremental Financing, or TIF, program that diverted property tax revenue from new development along Highland Park Boulevard and at the Arena Hub Plaza in Wilkes-Barre Township to fund infrastructure improvements on Highland Park and Mundy and Coal streets.

County Manager C. David Pedri recently briefed county council members on the status of the funds because most have been questioning what the county stands to receive and why it’s taking so long to reclaim the money. County council members had voted to close out the TIF in September 2015, arguing all the infrastructure improvements authorized under the 1998 agreement had been funded and completed.

Under the TIF agreement, leftover funding must be dispersed based on the percentage of revenue each taxing body sacrificed, Pedri told the council.

He presented this breakdown of the $9.7 million paid into the TIF:

• Wilkes-Barre Area School District, $5.3 million, or 55 percent

• County, $4.1 million, or 42 percent

• Wilkes-Barre Township, $319,000, or 3 percent

Based on that formula, the remaining $3.15 million would be returned in the following amounts, he said: school district, $1.7 million; county, $1.3 million; and township, $103,145.

However, these percentages and amounts are subject to change because the school district never paid an additional $1 million it had agreed to contribute under a 2009 arrangement hammered out after the district skipped several years of payments, county officials said.

If the school district made this payment, the leftover disbursements would be: school district, $2.45 million, or 59 percent; county, $1.58 million, or 38 percent; and township, $123,212, or 3 percent.

Council Chairwoman Linda McClosky Houck told Pedri the county should receive the higher amount, or $1.58 million, and not be penalized due to the district’s nonpayment. The difference could come out of district’s share, she said.

“That’s a good solution for me,” McClosky Houck said.

Two other pending issues further complicate distribution of the funds:

• The TIF must cover 20 percent of a settlement with the Interfaith Heights Apartments over the city’s taking of some of the development’s land to widen Coal Street. Wilkes-Barre Solicitor Tim Henry said he can’t divulge the settlement amount until the agreement is signed by all parties, and he was still awaiting Interfaith’s signature as of Monday evening.

• Wilkes-Barre, which did not sacrifice revenue for the TIF, continues to maintain some or all of the remaining funds should be left intact to finish a 280-foot Coal Street extension linking the road to Union Street — either as part of the existing TIF or a new one.

The state transportation department included the Coal Street extension in its long-range plan of prospective projects, but 2021 is the earliest the project would qualify for 80 percent state funding, officials have said.

Pedri told the council the city did not sacrifice any funding for the TIF.

“I don’t think that they have a claim to the distribution of any funds,” Pedri said.

However, the council may consider if “we’d be hurting ourselves as a county” by foregoing the Coal Street extension if 80 percent of the cost will be covered by the state, he said.

The extension also would take out most or all of a parking lot attached to the county-owned human services building on Pennsylvania Avenue and cross an elevated and active rail line owned by the county Redevelopment Authority.

Pedri said he will attempt to resolve the matter Thursday in a meeting with representatives of the city, township, school district and redevelopment authority, which managed the TIF on behalf of taxing bodies.

Litigation may be necessary because the authority — an independent body governed by county council-appointed board members — has not released the funds due to conflicting opinions on how or whether it should be disbursed, Pedri said.

Pedri said he plans to brief the council at its Jan. 24 meeting on options.

“I hope this option doesn’t include lengthy, drawn-out litigation, but I know potentially it might,” he said.

A council majority had rejected a proposal to factor the $3 million into the 2017 budget due to uncertainty over the dollar amount and timing of the release and concerns about covering ongoing operating expenses with one-time revenue.

County Councilman Stephen A. Urban said this week he will vehemently oppose any proposal to spend the financially struggling county’s share to fund the Coal Street extension, saying city officials should come up with the local match on their own if they believe a road extension that will involve major modifications to accommodate a crossing rail line is warranted.

Pedri
https://www.mydallaspost.com/wp-content/uploads/2017/01/web1_Pedri_David_072020_mug-cmyk-1.jpg.optimal.jpgPedri

By Jennifer Learn-Andes

jandes@timesleader.com

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.