Thursday, January 15, 2009

Scranton Finally Completes 2007 Audit

According to the Scranton Times, Scranton has finally completed its 2007 audit. The audit, due May 31, 2008 by Scranton’s Charter, is ten months late. The article failed to ask the very serious question, will Scranton’s 2008 audit be completed on time or will Scranton once again evade its own laws regarding the audit? This should be an issue considering that the Democratic Mayor and three of its Council Members are up for re-election in 2009.

The audit of Scranton’s books for 2007 found that Scranton had a surplus of $664,345. This can be attributed to Scranton’s 25% tax increase and selling delinquent debt.

The City’s long-term debt was $95,000,000.
Spending was increased $1,200,000 with revenue increasing $3,400,000.

Real Estate transfer fees were $388,863 higher than expected with permit fees $211,738 lower than expected. This suggests that real estate is being sold, but not improved.

Scranton’s total assets are registered at $309,600,000. When you look at its total liabilities, there is only a $52,400,000 difference. This suggests that Scranton is only $52 million away from being completely insolvent. If Scranton sold every asset it possesses and could secure its “appraised” value in this terrible market, it would only have a $52 million dollar surplus after paying its debts.

Scranton needs to complete its 2008 audit on time this year and sell its citizenry on a serious plan to pay off this debt. If a business were encumbered with this situation (a recent example would be Citigroup) we would be talking about who was going to buy City Hall and what they were going to do with it. This is incredibly irresponsible behavior on the part of city officials. The borrowing needs to stop immediately and Scranton needs to get its fiscal house in order.

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