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Shamokin not alone in financial distress
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WILKES-BARRE — A representative of Pennsylvania Economy League (PEL), hired by the City of Shamokin to conduct a financial management study on its finances, said Shamokin is typical of the communities in Pennsylvania experiencing financial problems.
“This a common program used by communities throughout the state,” said Gerald Cross, executive director for the PEL Central Office in Wilkes-Barre, when describing the study that will determine the city’s estimated expenses and revenues for the next five years. Management audits are not included in the work.
“Most municipalities don’t have the resources and time to project their finances five years ahead, so that’s why they hire us.”
PEL’s Wilkes-Barre office, which has performed more than 30 similar studies in the past four years around the state, is currently assisting four other municipalities — Altoona in Blair County, Hanover Township in Luzerne County, Coopersburg in Lehigh County and Plains Township in Luzerne County.
Other municipalities in the state that have undergone similar studies are Reading, Williamsport and Sunbury.
Cross said his office conducts an average of four financial projections for municipalities each year, while statewide, more than 30 studies have been done in the past four years. He said other PEL offices are located in Harrisburg, Philadelphia and Pittsburgh.
Shamokin hired PEL under a matching $15,000 state grant to conduct the study, which will be made public next month. It’s being completed to help combat the city’s $2.7 million debt. If conditions don’t improve, Shamokin may be forced to file for bankruptcy.
Lack of long-term planning, overspending, failure to make cuts in spending and a shrinking tax base are the major reasons for the debt, according to Shamokin City Manager David Bohanick.
Cross said the financial studies are “good exercises” that educate the public as to the pressures faced by municipal leaders in balancing budgets.
“The financial projections are part of an early intervention program that include an independent look at finances,” he said. “It’s a very helpful tool. Our organization is dedicated to helping communities operate effective and efficient governments.”
Cross said PEL attempts to prevent financial problems from becoming unmanageable by making prudent recommendations.
After the financial study is presented to council members, Cross said adjustments will need to be made by city officials in an attempt to reduce its debt and meet future expenses.
If bankruptcy is declared by the city, the state would take over day-day-to-day financial operations for several years, and may be forced to make cuts in personnel and equipment and services, and levee a substantial tax increase to generate necessary revenue.
PEL’s recommendations will be revealed to city council at its next workshop at 6 p.m. Aug. 6, and presented at the Aug. 11 regular council meeting.
“This a common program used by communities throughout the state,” said Gerald Cross, executive director for the PEL Central Office in Wilkes-Barre, when describing the study that will determine the city’s estimated expenses and revenues for the next five years. Management audits are not included in the work.
“Most municipalities don’t have the resources and time to project their finances five years ahead, so that’s why they hire us.”
PEL’s Wilkes-Barre office, which has performed more than 30 similar studies in the past four years around the state, is currently assisting four other municipalities — Altoona in Blair County, Hanover Township in Luzerne County, Coopersburg in Lehigh County and Plains Township in Luzerne County.
Other municipalities in the state that have undergone similar studies are Reading, Williamsport and Sunbury.
Cross said his office conducts an average of four financial projections for municipalities each year, while statewide, more than 30 studies have been done in the past four years. He said other PEL offices are located in Harrisburg, Philadelphia and Pittsburgh.
Shamokin hired PEL under a matching $15,000 state grant to conduct the study, which will be made public next month. It’s being completed to help combat the city’s $2.7 million debt. If conditions don’t improve, Shamokin may be forced to file for bankruptcy.
Lack of long-term planning, overspending, failure to make cuts in spending and a shrinking tax base are the major reasons for the debt, according to Shamokin City Manager David Bohanick.
Cross said the financial studies are “good exercises” that educate the public as to the pressures faced by municipal leaders in balancing budgets.
“The financial projections are part of an early intervention program that include an independent look at finances,” he said. “It’s a very helpful tool. Our organization is dedicated to helping communities operate effective and efficient governments.”
Cross said PEL attempts to prevent financial problems from becoming unmanageable by making prudent recommendations.
After the financial study is presented to council members, Cross said adjustments will need to be made by city officials in an attempt to reduce its debt and meet future expenses.
If bankruptcy is declared by the city, the state would take over day-day-to-day financial operations for several years, and may be forced to make cuts in personnel and equipment and services, and levee a substantial tax increase to generate necessary revenue.
PEL’s recommendations will be revealed to city council at its next workshop at 6 p.m. Aug. 6, and presented at the Aug. 11 regular council meeting.
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