City Council to vote Monday night for 4th time on trust-fund bailout
By Kathleen Brady Shea, Managing Editor, The Times
City Council members C. Arvilla Hunt (from left), David C. Collins, and Joseph Hamrick discuss the city’s dwindling finances at a recent meeting.
Reviewing Coatesville’s dire financial straits may cause people to feel better about their own income, unless, of course, they are Coatesville residents or employees, in which case they are inextricably tied to the crisis.
On Monday night, the seven-member City Council is scheduled to vote for the fourth time on whether to authorize the release of nearly $2.25 million from the city’s trust fund – a bailout needed to make the next payroll, according to John Marcarelli, the city’s finance director.
To date, City Council members Jarrell Brazzle, Joseph Hamrick, Ingrid Jones, and Ed Simpson have all cast at least one vote for the withdrawal. Provided they are present on Monday and haven’t changed their position, the measure should pass.
Council President David C. Collins and Council members C. Arvilla Hunt and Jeff LoPrinzi have repeatedly sought more information. LoPrinzi has questioned Marcarelli’s numbers, which he believes are low, and Collins has requested steps to stop the hemorrhaging. All have indicated they would support the withdrawal if their concerns were addressed.
City workers, who are paid twice a month, received checks on Friday, Marcarelli said. Without additional revenue, the next payroll can’t be covered, Marcarelli said.
According to figures provided to City Council at a public meeting last Wednesday, nearly half of the shortfall comes from legal and police costs, which have frequently been intertwined. Marcarelli estimated that legal fees – budgeted at $300,000 for the year – will cost about $65,000 more than the nearly half a million that’s already been spent. A tax-anticipation loan will necessitate a payment of $947,000 plus $26,000 in interest, Marcarelli said.
Marcarelli listed the anticipated cost for 2012 legal fees at $850,000, which includes labor negotiations and litigation costs. City officials said the city may have to front a recent $275,000 settlement in a police discrimination lawsuit; however, the city should get $225,000 reimbursed from its insurance carrier.
A pie-chart breakdown of legal payouts to date showed that 11 firms have been paid by the city, amounts that range from $1,000 for bond counsel to $200,000 for a police lawsuit settlement in the spring. John S. Carnes Jr., the city’s regular solicitor, has earned about $75,000 so far and is expected to come close to his budgeted amount of $100,000 for the year. Significant beneficiaries include Siana, Bellwoar and McAndrew, the city’s special counsel – $122,459 to date – and the attorneys, led by Dolores Troiani, involved in the spring settlement for Police Officer James Pinto.
Another chart presented by Marcarelli showed 19 active or pending lawsuits against the city as of Oct. 3, one of which resulted in the $275,000 settlement with four minority police officers. It is not known how many of the other suits involve police, but Collins said last week that he believed Carnes’ estimate of about 60 percent was low. He put the number around 80 percent. Litigation by police officers has been cited by city officials as the impetus to hire a permanent police chief; however, efforts to accomplish that over the past couple of months have repeatedly failed.
Will the City have any fees (penalties) associated with the withdrawal from the ‘RESERVE’ Trust, assuming that Council ok’s it on Monday?
It was reported in the DLN in 2008 that the City incurred a $10,000 penalty for selling securities prior to their maturity date, when Harry Walker made a year end $500,000 transfer from the Reserve Trust.
Will the City incur a penalty now? If so how much?
Who is going to make sure that this doesn’t happen again?