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          1                 SCRANTON CITY COUNCIL MEETING

          2                       PUBLIC HEARING

          3

          4           IN RE:  FILE OF COUNCIL NO. 40, 2008

          5     AUTHORIZING THE LEASE OF CERTAIN REAL PROPERTY TO

          6     THE REDEVELOPMENT AUTHORITY OF THE CITY OF

          7     SCRANTON, PENNSYLVANIA (THE "AUTHORITY") PURSUANT

          8     TO A LEASE AGREEMENT; AUTHORIZING AND DIRECTING

          9     THE INCURRENCE OF LEASE RENTAL DEBT IN THE

         10     MAXIMUM PRINCIPAL AMOUNT OF SIX MILLION ONE

         11     HUNDRED THOUSAND DOLLARS ($6,100,000), PURSUANT

         12     TO THE ACT OF THE GENERAL ASSEMBLY OF THE

         13     COMMONWEALTH OF PENNSYLVANIA, 53 PA.C.S, CHAPTERS

         14     80-82, AS AMENDED, KNOWN AS THE LOCAL GOVERNMENT

         15     UNIT DEBT ACT; DETERMINING THAT SUCH DEBT SHALL

         16     BE INCURRED UNDER THE DEBT ACT AS LEASE RENTAL

         17     DEBT TO BE EVIDENCED BY A CERTAIN SUBLEASE AND

         18     GUARANTY AGREEMENT OF THE CITY SECURING A

         19     GUARANTEED LEASE REVENUE BOND TO BE EXECUTED BY

         20     THE AUTHORITY TO FINANCE A PROJECT FOR THE

         21     AUTHORITY CONSISTING OF ALL OR ANY OF THE

         22     FOLLOWING: (1) ACQUIRING THE AUTHORITY'S

         23     LEASEHOLD INTEREST IN SUCH REAL PROPERTY SUBJECT

         24     TO THE LEASE AGREEMENT FROM THE CITY AND IN

         25     CONNECTION THEREWITH CURRENTLY REFUNDING THE


 00002

          1     SEWER AUTHORITY OF THE CITY OF SCRANTON,

          2     PENNSYLVANIA'S GUARANTEED LEASE REVENUE NOTES,

          3     SERIES OF 2005; AND (2) PAYING THE COSTS AND

          4     EXPENSES OF FINANCING SUCH PROJECT; BRIEFLY

          5     DESCRIBING SUCH PROJECT FOR WHICH SUCH DEBT IS TO

          6     BE INCURRED; DECLARING THE GUARANTY OF SAID

          7     AUTHORITY'S GUARANTEED LEASE REVENUE BONDS TO BE

          8     A PROJECT OF THE CITY FOR WHICH LEASE RENTAL DEBT

          9     IS TO BE INCURRED; AUTHORIZING CERTAIN CITY

         10     OFFICERS TO PREPARE, CERTIFY AND FILE WITH THE

         11     DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT

         12     THE DEBT STATEMENT REQUIRED BY SECTION 8110 OF

         13     THE LOCAL GOVERNMENT UNIT DEBT ACT AND

         14     AUTHORIZING THE PREPARATION OF A DEBT STATEMENT

         15     AND BORROWING BASE CERTIFICATE; APPROVING THE

         16     FORM OF, AND AUTHORIZING, SUBJECT TO CERTAIN

         17     CONDITIONS, EXECUTION AND DELIVERY OF THE

         18     AFORESAID LEASE AGREEMENT AND SUBLEASE AND

         19     GUARANTY AGREEMENT; SPECIFYING THE AMOUNT OF THE

         20     GUARANTY OBLIGATION OF THE CITY PURSUANT TO SUCH

         21     SUBLEASE AND GUARANTY AGREEMENT AND THE SOURCES

         22     OF PAYMENT OF SUCH GUARANTY OBLIGATION; REPEALING

         23     INCONSISTENT PRIOR ORDINANCES; SETTING FORTH

         24     CERTAIN CONDITIONS TO THE EXECUTION AND DELIVERY

         25     OF THE AFORESAID LEASE AGREEMENT AND SUBLEASE AND


 00003

          1     GUARANTY AGREEMENT; AUTHORIZING THE PROPER

          2     OFFICERS OF THE CITY TO TAKE ALL REQUIRED,

          3     NECESSARY OR DESIRABLE RELATED ACTION IN

          4     CONNECTION WITH SUCH PROJECT AND THE EXECUTION

          5     AND DELIVERY OF THE LEASE AGREEMENT AND SUBLEASE

          6     AND GUARANTY AGREEMENT; APPROVING THE FORM AND

          7     DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT

          8     AND AN OFFICIAL STATEMENT WITH REGARD TO THE

          9     GUARANTEED LEASE REVENUE BONDS; APPOINTING

         10     VARIOUS PROFESSIONALS; PROVIDING FOR THE

         11     EFFECTIVENESS OF THIS ORDINANCE; AND DECLARING

         12     SAID PROJECT DESIRABLE FOR THE HEALTH, SAFETY AND

         13     WELFARE OF THE RESIDENTS OF THE CITY.

         14

         15                          HELD:

         16

         17               Tuesday, September 30, 2008

         18

         19                          LOCATION:

         20                      Council Chambers

         21                     Scranton City Hall

         22                 340 North Washington Avenue

         23                   Scranton, Pennsylvania

         24

         25              AMELIA NICOL - COURT REPORTER


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          1     CITY OF SCRANTON COUNCIL:

          2

          3     MR. ROBERT MCGOFF, PRESIDENT

          4

          5     MS. JUDY GATELLI, VICE-PRESIDENT

          6

          7     MS. JANET E. EVANS

          8

          9     MS. SHERRY FANUCCI

         10

         11     MR. WILLIAM COURTRIGHT

         12

         13     MS. KAY GARVEY, CITY CLERK

         14

         15     MR. NEIL COOLICAN, ASSISTANT CITY CLERK

         16

         17     MR. AMIL MINORA, SOLICITOR

         18

         19

         20

         21

         22

         23

         24

         25


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          1                     MR. MCGOFF:  I'd like to call

          2                this public hearing to order.

          3                     Roll call, please.

          4                     MR. COOLICAN:  Mrs. Evans.

          5                     MS. EVANS:  Here.

          6                     MR. COOLICAN:  Mrs. Gatelli.

          7                     MS. GATELLI:  Here.

          8                     MR. COOLICAN:  Ms. Fanucci.

          9                     MS. FANUCCI:  Here.

         10                     MR. COOLICAN:  Mr. Courtright.

         11                     MR. COURTRIGHT:  Here.

         12                     MR. COOLICAN:  Mr. McGoff.

         13                     MR. MCGOFF:  Here.  Notice is

         14                hereby given that the Scranton City

         15                Council will hold a public hearing on

         16                Tuesday, September 30, 2008, at 6 p.m.

         17                in Council Chambers.

         18                     The purpose of the said public

         19                hearing is to hear testimony and

         20                discuss the following:

         21                     FILE OF COUNCIL NO. 40, 2008 -

         22                AUTHORIZING THE LEASE OF CERTAIN REAL

         23                PROPERTY TO THE REDEVELOPMENT

         24                AUTHORITY OF THE CITY OF SCRANTON,

         25                PENNSYLVANIA (THE "AUTHORITY")


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          1                PURSUANT TO A LEASE AGREEMENT;

          2                AUTHORIZING AND DIRECTING THE

          3                INCURRENCE OF LEASE RENTAL DEBT IN THE

          4                MAXIMUM PRINCIPAL AMOUNT OF SIX

          5                MILLION ONE HUNDRED THOUSAND DOLLARS

          6                ($6,100,000), PURSUANT TO THE ACT OF

          7                THE GENERAL ASSEMBLY OF THE

          8                COMMONWEALTH OF PENNSYLVANIA, 53

          9                PA.C.S, CHAPTERS 80-82, AS AMENDED,

         10                KNOWN AS THE LOCAL GOVERNMENT UNIT

         11                DEBT ACT; DETERMINING THAT SUCH DEBT

         12                SHALL BE INCURRED UNDER THE DEBT ACT

         13                AS LEASE RENTAL DEBT TO BE EVIDENCED

         14                BY A CERTAIN SUBLEASE AND GUARANTY

         15                AGREEMENT OF THE CITY SECURING A

         16                GUARANTEED LEASE REVENUE BOND TO BE

         17                EXECUTED BY THE AUTHORITY TO FINANCE A

         18                PROJECT FOR THE AUTHORITY CONSISTING

         19                OF ALL OR ANY OF THE FOLLOWING: (1)

         20                ACQUIRING THE AUTHORITY'S LEASEHOLD

         21                INTEREST IN SUCH REAL PROPERTY SUBJECT

         22                TO THE LEASE AGREEMENT FROM THE CITY

         23                AND IN CONNECTION THEREWITH CURRENTLY

         24                REFUNDING THE SEWER AUTHORITY OF THE

         25                CITY OF SCRANTON, PENNSYLVANIA'S


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          1                GUARANTEED LEASE REVENUE NOTES, SERIES

          2                OF 2005; AND (2) PAYING THE COSTS AND

          3                EXPENSES OF FINANCING SUCH PROJECT;

          4                BRIEFLY DESCRIBING SUCH PROJECT FOR

          5                WHICH SUCH DEBT IS TO BE INCURRED;

          6                DECLARING THE GUARANTY OF SAID

          7                AUTHORITY'S GUARANTEED LEASE REVENUE

          8                BONDS TO BE A PROJECT OF THE CITY FOR

          9                WHICH LEASE RENTAL DEBT IS TO BE

         10                INCURRED; AUTHORIZING CERTAIN CITY

         11                OFFICERS TO PREPARE, CERTIFY AND FILE

         12                WITH THE DEPARTMENT OF COMMUNITY AND

         13                ECONOMIC DEVELOPMENT THE DEBT

         14                STATEMENT REQUIRED BY SECTION 8110 OF

         15                THE LOCAL GOVERNMENT UNIT DEBT ACT AND

         16                AUTHORIZING THE PREPARATION OF A DEBT

         17                STATEMENT AND BORROWING BASE

         18                CERTIFICATE; APPROVING THE FORM OF,

         19                AND AUTHORIZING, SUBJECT TO CERTAIN

         20                CONDITIONS, EXECUTION AND DELIVERY OF

         21                THE AFORESAID LEASE AGREEMENT AND

         22                SUBLEASE AND GUARANTY AGREEMENT;

         23                SPECIFYING THE AMOUNT OF THE GUARANTY

         24                OBLIGATION OF THE CITY PURSUANT TO

         25                SUCH SUBLEASE AND GUARANTY AGREEMENT


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          1                AND THE SOURCES OF PAYMENT OF SUCH

          2                GUARANTY OBLIGATION; REPEALING

          3                INCONSISTENT PRIOR ORDINANCES; SETTING

          4                FORTH CERTAIN CONDITIONS TO THE

          5                EXECUTION AND DELIVERY OF THE

          6                AFORESAID LEASE AGREEMENT AND SUBLEASE

          7                AND GUARANTY AGREEMENT; AUTHORIZING

          8                THE PROPER OFFICERS OF THE CITY TO

          9                TAKE ALL REQUIRED, NECESSARY OR

         10                DESIRABLE RELATED ACTION IN

         11                CONNECTION WITH SUCH PROJECT AND THE

         12                EXECUTION AND DELIVERY OF THE LEASE

         13                AGREEMENT AND SUBLEASE AND GUARANTY

         14                AGREEMENT; APPROVING THE FORM AND

         15                DISTRIBUTION OF A PRELIMINARY OFFICIAL

         16                STATEMENT AND AN OFFICIAL STATEMENT

         17                WITH REGARD TO THE GUARANTEED LEASE

         18                REVENUE BONDS; APPOINTING VARIOUS

         19                PROFESSIONALS; PROVIDING FOR THE

         20                EFFECTIVENESS OF THIS ORDINANCE; AND

         21                DECLARING SAID PROJECT DESIRABLE FOR

         22                THE HEALTH, SAFETY AND WELFARE OF THE

         23                RESIDENTS OF THE CITY.

         24                     A full copy of the legislation

         25                has been read into record and we'll


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          1                now hear public comment.

          2                     Andy Sbaraglia.

          3                     MR. SBARAGLIA:  Andy Sbaraglia.

          4                I asked quite awhile ago what is the

          5                Pennsylvania Economy League thinking

          6                about doing this.  I assume you all

          7                got letters back telling you neither

          8                approved or disapproved of it.  Since

          9                I got no answer, obviously we got

         10                nothing from them.

         11                     Okay.  Let's get back to actually

         12                who done it.  Tell me, why can't the

         13                city borrow the money in their own

         14                name and pay off this debt.  Why does

         15                all this subterfuge go in from one

         16                authority back to another authority

         17                for another authority.  And what about

         18                the letter for credit.  You stayed

         19                pretty mum on it.  Is there a letter

         20                of credit attached to this?  Obviously

         21                we are not going to get any answer at

         22                all.  So it's actually a done deal.

         23                     MS. FANUCCI:  It's public

         24                comment, correct?  Right?  We're not

         25                doing question and answer.  We're


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          1                doing public comment.  So we'll answer

          2                you after you are done.  Make your

          3                comments, please.

          4                     MR. SBARAGLIA:  Well, there isn't

          5                too much comment because that should

          6                be the only person making out on this,

          7                this bank obviously.  We lost money

          8                when we first did the deal.  The bank

          9                paid money on it, the -- paid money on

         10                it, the citizens of this -- Scranton

         11                did not.  Now, we are doing it again.

         12                We are losing more money.  Even if you

         13                said is -- or refinancing.  There's a

         14                cost associated with refinancing.

         15                We're not getting that refinancing for

         16                free.  We're paying an extra amount of

         17                money.  We've been paying an extra

         18                amount of money.  Now we have even

         19                another problem.  Exactly who is going

         20                to payoff the debt to the Scranton

         21                Redevelopment Authority?  How much are

         22                we going to be billed?  Are we going

         23                to be billed the exact cost in a note

         24                or are they going to tack on a fee?

         25                All these things are not here.


 00011

          1                They're not known at least to the

          2                citizens.  Since I'm now privy to

          3                their back rooms, I don't know what's

          4                done there.  All I know is this.  It's

          5                not a good idea to be subterfuge for

          6                anything.  Either you borrow it -- you

          7                borrow it out front, you pay it off,

          8                we bite the bullet.  It's done, it's

          9                done, and it's finish.  Then we payoff

         10                the note, whatever it is.  But at

         11                least you know what is going on.  If

         12                there's a letter of credit attached to

         13                this, you never know what is going on.

         14                I thank you.

         15                     MR. MCGOFF:  Thank you, Mr.

         16                Sbaraglia.

         17                     Ozzie Quinn?  Dave Laske.

         18                     MR. LASKE:  Are you talking about

         19                the six million dollar loan?

         20                     MR. MCGOFF:  Excuse me?

         21                     MR. LASKE:  Are you referring to

         22                the six million dollar loan.  That's

         23                the reason I'm here.

         24                     MS. FANUCCI:  Yeah.  Come on up.

         25                     MR. LASKE:  I won't take up too


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          1                much of your time.  Dave Laske from

          2                North Scranton.  I just want to tell

          3                you that I just disapprove of

          4                borrowing anymore money due to the

          5                financial conditions of the city.  But

          6                I know my words won't have any meaning

          7                whatsoever, because I feel as though

          8                you've already made up your mind and

          9                you're going to go through with it.

         10                You're going to put the taxpayers

         11                farther in debt.  You have no mercy.

         12                I know people that their children had

         13                to move in so they didn't lose their

         14                house.  You people can be cocky,

         15                you're still making money.  Us old

         16                timers made our money years ago.

         17                We're just living on the interest.

         18                     Now I have one more thing to say.

         19                You have a skunk problem in Scranton.

         20                I'm a licensed trapper.

         21                     MR. MCGOFF:  We're on -- this is

         22                a public hearing on borrowing.  That

         23                would be later.

         24                     MR. LASKE:  I'll come back.  I

         25                was going to get an early quit.


 00013

          1                     MR. MCGOFF:  Thank you.  Bill

          2                Jacobite.

          3                     May I ask you whose camera?

          4                     UNIDENTIFIED AUDIENCE VOICE.

          5                It's an audio record.

          6                     MS. FANUCCI:  For?

          7                     UNIDENTIFIED AUDIENCE VOICE:  I'm

          8                recording the hearing.

          9                     MR. MCGOFF:  Please take it

         10                behind the --

         11                     MS. FANUCCI:  It has to be behind

         12                the median, that's all.  Just so you

         13                know.

         14                     MR. MCGOFF:  Thank you.

         15                     MS. FANUCCI:  Actually you are

         16                probably better off being closer to a

         17                speaker anyway.  There's a speaker

         18                over there and there's a speaker over

         19                here.

         20                     MR. JACOWITZ:  Bill Jacowitz,

         21                South Scranton.  I realized what I'm

         22                going to say tonight is not going to

         23                hurt any matters, it's not going to

         24                change anybody's opinions, it's not

         25                going to change anybody's mind.  I'm


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          1                pretty sure the vote will be three to

          2                two, three votes in favor of bailing

          3                out Doherty and two votes against the

          4                citizens.  The only thing that I want

          5                to make known is, you know, the

          6                unemployment right now is up to 6.7

          7                percent.  It's risen again.  By the

          8                end of the year, I predict the

          9                unemployment rate will be seven

         10                percent.  The people cannot afford

         11                this.  I mean, you can call it

         12                financing, refinancing, you can call

         13                it borrowing, you can call it anything

         14                you want to call it.  The fact of the

         15                matter is, the money has to be paid

         16                back.  The only way the money is going

         17                to be paid back is through tax money

         18                because the city has no way of

         19                creating any revenue whatsoever that I

         20                know of.  Maybe somebody can enlighten

         21                me later on about revenue, every

         22                avenues we have other than taxes to

         23                raise money.  But, again, like I said,

         24                unemployment rate is going to be 6.7,

         25                it's going to be higher.  Okay.


 00015

          1                     Last week we were informed by

          2                Councilwoman Fanucci that the police

          3                unions and the fire unions are

          4                responsible for the recovery plan not

          5                being implemented.  Now, if that is

          6                true, if Mrs. Fanucci is true and this

          7                is the reason why we have to borrow

          8                another 6.1 million dollars, I

          9                strongly suggest that the City of

         10                Scranton no longer have a full-time

         11                fire department and police department

         12                because we cannot afford to pay for

         13                it.  The majority of the communities

         14                in this area have part-time police and

         15                part-time fire.  So if the firemen and

         16                policemen are responsible for all the

         17                problems in the 98 point million debt

         18                and 300 million dollar long term debt,

         19                then I really think that someone

         20                should make a motion this evening to

         21                disband our full-time fire

         22                department -- our full-time police

         23                department and go strictly volunteer

         24                police and fire like the rest of the

         25                communities in this area.


 00016

          1                     MR. MCGOFF:  Faith Franus.

          2                     MS. FRANUS:  Faith Franus.  I

          3                would just like you to answer this

          4                accurately before we --  you said you

          5                would answer these questions after we

          6                talk, right?

          7                     MR. MCGOFF:  I'm sure the people

          8                will speak on it when it comes up on

          9                the agenda, yes.

         10                     MS. FRANUS:  Okay.  I was just

         11                wondering what will happen because of

         12                the economy the way it is with this

         13                bail out process taking place with all

         14                the banks, what would happen, for

         15                example, PNC when the man came for the

         16                caucus, that public caucus that time a

         17                couple weeks ago.  It wasn't filmed

         18                but it was here.  I don't remember his

         19                name from PNC Bank, he seemed pretty

         20                fine with the loan.  But I wonder how

         21                he would feel now considering all the

         22                banks are going under.  So is it

         23                possible that if PNC does not give the

         24                city the loan, the city -- my question

         25                is, will the city go bankrupt because


 00017

          1                of this and what will happen then?  I

          2                mean, that may be the likelihood now

          3                because of the situation with the city

          4                in the event -- the country being the

          5                shape it's in and the year after, bank

          6                closing.  So it's a concern.  And

          7                basically we come here to all these

          8                public hearings for the last four

          9                years and nothing we say, the public,

         10                the people that you're supposed to be

         11                representing matters and you say all

         12                the same people come up, all the same

         13                people.  It doesn't really matter.  We

         14                talk to many people, too, just like

         15                you do and they're certainly behind

         16                us.  They just can't all get here.

         17                But it doesn't mean they don't feel

         18                the same way we do.  And I'm sure many

         19                asked say three-fourths if not more do

         20                not want this borrowing to take place

         21                because it affects their livelihood.

         22                The average person in the city can't

         23                afford this borrowing.  If you had

         24                this in these previous budgets that

         25                you had offered to you -- council


 00018

          1                people, if you followed them with no

          2                tax increases and you kept along with

          3                Mayor Doherty to hire people with

          4                outrageous wages, but you didn't care,

          5                because you didn't do his work under

          6                any costs of the people you're

          7                supposed to be representing.  You're

          8                not doing your job, Mrs. Fanucci, Mr.

          9                McGoff, Mrs. Gatelli for the people,

         10                and we will see tonight that your yes

         11                vote for this borrowing.  I mean, why

         12                do we come is beyond us.  But we come

         13                because it's the right thing to do,

         14                because we're doing the right thing

         15                hoping that you will do the right

         16                thing for once in your life.  Mrs.

         17                Evans and Mr. Courtright always do.

         18                You three --

         19                     MR. MCGOFF:  Are you still

         20                speaking on the borrowing?

         21                     MS. FRANUS:  I'm speaking on the

         22                borrowing.

         23                     MR. MCGOFF:  Okay.

         24                     MS. FRANUS:  In the fact that you

         25                will vote yes.


 00019

          1                     MS. FANUCCI:  It was in the

          2                budget, Faith.  You know that.  So, I

          3                mean, it's not like --

          4                     MS. FRANUS:  This is not -- just

          5                refinancing.  You'll be paying more --

          6                I know it's in the budget.  It's

          7                December 15th of 5A has to be paid.

          8                It's in the budget.

          9                     MS. FANUCCI:  Correct.

         10                     MR. FRANUS:  Yes.  But when you

         11                refinance, you pay more than what you

         12                had.  If I had to get my house fixed,

         13                I go to the bank and refinance.  I'm

         14                asking for more money over a longer

         15                period of time.  That's borrowing

         16                money.

         17                     MR. MCGOFF:  Thank you.

         18                     MS. FRANUS:  I have to pay that

         19                back, right?  I mean, Judy wants to

         20                claim that that's not borrowing but

         21                we're not stupid.

         22                     Basically I'm asking you to

         23                please vote no but that will never

         24                happen.  It's fruitless.

         25                     MR. MCGOFF:  Thank you.


 00020

          1                     MS. FRANUS:  What did you say --

          2                is there a time limit on this?

          3                     MR. MCGOFF:  I thought you were

          4                finished.

          5                     MS. FRANUS:  No, I wasn't.

          6                     MR. MCGOFF:  You said it was

          7                fruitless.  I thought you were

          8                finished.

          9                     MR. FRANUS:  No.  You wish but --

         10                basically I wish you would start

         11                representing the people that you're

         12                supposed to be and not the mayor.  For

         13                once in four years, possibly, I doubt

         14                it and we'll see.  Thank you.

         15                     MR. MCGOFF:  Thank you, Mrs.

         16                Franus.  Sam Patilla.

         17                     MR. PATILLA:  Good evening, Mr.

         18                Courtright, Miss Evans.  We're here to

         19                speak on my objection to that loan.

         20                Now, the House has done a great

         21                service for the residents of this

         22                country by voting down that bail out

         23                and if one loses the Doherty policy of

         24                borrowing to payoff past debts and

         25                other loans, you know, they run hand


 00021

          1                in hand with one another.  You know,

          2                this country wouldn't be in the

          3                position that it's in right now if it

          4                wasn't for the policies of the Doherty

          5                administration, the Rendell

          6                administration and the Bush

          7                administration.

          8                     Now, this 6.5 million, the first

          9                question like I addressed last week,

         10                the first problem I have with this is

         11                that it's a balloon payment.  The city

         12                should never have entered into any

         13                agreement that required a loan payment

         14                of any sort.  It should have been a

         15                fixed rate and so many years,

         16                whatever, everything is nice and

         17                packaged together.

         18                     Second problem I have with this

         19                is the fact that since I've relocated

         20                to Scranton, every time a payment is

         21                due, it's two or three months before

         22                that payment is due that it's brought

         23                before city council.  You know, why is

         24                financial planning would dictate that

         25                these situations come up nine,


 00022

          1                ten months in advance so we stay ahead

          2                of the ball game.  You know, just like

          3                going back to the house here when they

          4                rejected this bail out program.  If

          5                this loan is rejected which we all

          6                know the other speakers have already

          7                spoken on it, we know it's not going

          8                to be rejected.  But if this loan is

          9                rejected, Scranton is not going to

         10                die, okay.  We can't get any broke

         11                than you already are if you are broke.

         12                You can't get any water out of a rock

         13                if it sinks.  So if there is nothing

         14                there that is going to happen to

         15                Scranton if this loan isn't approved.

         16                If the city -- Doherty administration

         17                -- not the city, the Doherty

         18                administration is forced to finally

         19                stand up on its tooth and deal with

         20                the responsibilities of the mayor, of

         21                the administration that they were

         22                elected to do which they failed to do

         23                since he has been in office and his

         24                hand picked cronies have been in their

         25                positions, we can finally start back


 00023

          1                in the road to recovery.  Okay.  I'm

          2                for the bailout, 100 percent being

          3                disapproved because it's not going to

          4                hurt Main Street America like they

          5                want people to believe.  You're not

          6                going to get any more jobs if the

          7                financial institutions are giving that

          8                money.  The work of finance aren't

          9                going to stop lending money.  The

         10                foreign counties aren't going to stop

         11                lending money to America because if

         12                they do, American stops giving them

         13                foreign aid.  So it's crock, okay.

         14                What is going to happen here just like

         15                this loan gets refused, financial

         16                stability is going to be put into

         17                play, because people are finally going

         18                to have to stand up like men and women

         19                and face their obligations honestly

         20                and truthfully.  You can't hide behind

         21                a loan.  You can't hind behind false

         22                policies, okay.  This country is in

         23                the position it is right now because

         24                the same principles that Doherty has

         25                been applying to the City of Scranton


 00024

          1                for the last six plus years,

          2                borrowing, borrowing, borrowing, and

          3                it being pumped up by city council and

          4                your veterans.  It's a sham.  It's

          5                been proven as a sham on a national

          6                level and it will be proven as a sham

          7                on a local level if you -- one of you

          8                stand up like a man and say no, enough

          9                is enough.  All right.  It doesn't

         10                make any sense whether you like the

         11                people that come to the City of

         12                Scranton, it doesn't make any sense

         13                whether these meetings are televised

         14                live or not, because there are other

         15                outlets to get the message across.

         16                People feel this every day, what are

         17                they going to do.  They can feel it

         18                everyday.  A bill comes in the mail,

         19                they feel it everyday that they've got

         20                to pay a trash bill or a tax bill or a

         21                service bill.  We feel it everyday.

         22                We don't need television to tell us.

         23                We don't need newspapers to tell us

         24                that we're have a problem --

         25                     MR. MCGOFF:  Mr. Patilla, we're


 00025

          1                not here to speak about television.

          2                     MR. PATILLA:  I'm speaking about

          3                that 6.1 million loan because that

          4                directly affects everything else.

          5                That's it.  It affects all of us in

          6                this city when you sit back and allow

          7                that man to continue to borrow and

          8                borrow and borrow on top of other

          9                loans.  It affects every aspect of

         10                this city on the economic and

         11                financial front.  It's not just that

         12                one area that this affects especially

         13                if you allow him to sub circumvent

         14                city council by giving him authority

         15                to the --

         16                     MR. MCGOFF:  Thank you, Mr.

         17                Patilla.

         18                     MR. PATILLA:  To the powering

         19                authority, to the public -- to the

         20                sewer authority, to all these other

         21                authorities and you run your

         22                dedication and your responsibilities

         23                to the taxpayers of this city.

         24                     MR. MCGOFF:  Thank you.

         25                     MR. PATILLA:  Thank you for


 00026

          1                putting the alarm on me.  Because I'm

          2                a black man, you rang the bell --

          3                     MR. MCGOFF:  Excuse me.  That's

          4                unnecessary.  You're out of order.

          5                Please leave.

          6                     MS. FANUCCI:  The camera is why

          7                television it is a good thing.  This

          8                is one of the reasons why I'm glad we

          9                have TV in these corridors.  It's

         10                ridiculous.

         11                     MR. MCGOFF:  Ray Shumacher.  Mr.

         12                Quinn.

         13                     MR. QUINN:  Ozzie Quinn,

         14                Taxpayer's Association.  In regards to

         15                this 6.1 million dollar loan, the

         16                Taxpayer's Association is obviously

         17                against that because of the debt

         18                that's in the city.  Two years ago you

         19                we went for saving -- a person from

         20                PNC Bank that tried to sell a

         21                44 million dollar loan, he was here,

         22                selling the 6.1 million loan and that

         23                was two years ago, and the budget then

         24                it was 74 million dollars and now it's

         25                10 million dollars higher and you're


 00027

          1                still borrowing the money.  I don't

          2                understand it.  So you settled for 15

          3                million two years ago and now what

          4                last week with the amortization where

          5                it goes from 6.1 million, it goes up

          6                to 21 million.  It's unbelievable.  I

          7                just want to read a little about Mrs.

          8                Evans in 2006 and how it seems like it

          9                happens --  it's happening right now.

         10                This is from the 2006 minutes.  Mrs.

         11                Evans, she says, "Well, as chairman of

         12                this committee, once again I will not

         13                recommend such borrowing.  Borrowing

         14                has been the pattern for four years.

         15                It has solved nothing.  To the

         16                contrary, it created a massive debt

         17                and each year other council members,

         18                myself, unincluded, gave the mayor the

         19                amount the money he requested for

         20                borrowing to address the deficits.

         21                Nevertheless, nothing changed.  No,

         22                I'm sorry, I retract that statement.

         23                Much has changed.  Our debt has gone

         24                to an unmanageable, unreasonable level

         25                for the city this size with a


 00028

          1                population and demographics of this

          2                city when you look at a 23 percent

          3                population who is living below the

          4                poverty level, a higher than average

          5                senior population.  God forgive anyone

          6                who's been involved in this borrowing

          7                all these years because it has solved

          8                nothing.  The only thing that has

          9                happened, I said as the debt grows and

         10                the mayor walks out of his office and

         11                continues to spend more and more each

         12                year, so nothing has been solved in

         13                all these years by permitting him to

         14                borrow all the time.  Now, the time

         15                has arrived, it's do or die, now or

         16                never stop the debt increase.  Begin

         17                to pay down the Doherty debt.  As far

         18                as the mayor is concerned, well, the

         19                situation should be handled by the

         20                mayor because he's in charge of the

         21                city, not city council should be -- we

         22                are not responsible to fix this.  He's

         23                the responsible party because he

         24                created this.  Now, if I were mayor, I

         25                would have sat down and negotiated


 00029

          1                some of the contracts.  Wow, this

          2                seems like its yesterday.  It seems

          3                like today.  Had I seen the mayor, had

          4                I'd been there, there would have been

          5                far less spending, there would have

          6                been far less borrowing.  Yes,

          7                refinancing the old debt but there

          8                would have been the constant pattern

          9                of borrow -- squander, borrow, spend,

         10                squander and the more the operation,

         11                raises in new jobs -- " and so and so

         12                on.

         13                     That obviously scares me.  It

         14                seems like it's happening right now,

         15                you know.  The same thing over and

         16                over and over again.  We're not going

         17                to get out of this debt.  And

         18                44 million dollars, you asked two

         19                years ago for 44 million dollars.

         20                Thank God it was turned down.  But you

         21                give him 15 million and then he

         22                increased the budget in two years, 10

         23                million.  My God, we'll never get out

         24                of the debt.  Come on, look out for

         25                the taxpayers.  Enough is enough.


 00030

          1                     MR. MCGOFF:  Thank you, Mr.

          2                Quinn.

          3                     MS. SCHUMACHER:  Marie

          4                Schumacher.  You sound as if you have

          5                a cold, Mr. McGoff.  Do you?

          6                     MR. MCGOFF:  Yes, I do.

          7                     MS. SCHUMACHER:  Are you

          8                contagious?

          9                     MR. MCGOFF:  Excuse me?

         10                     MS. SCHUMACHER:  Are you

         11                contagious?

         12                     MR. MCGOFF:  Not usually.

         13                     MS. SCHUMACHER:  Okay.  Then may

         14                I approach?  7C on tonight's agenda,

         15                the borrowing of 6.1 million dollars,

         16                I've just distributed to you a packet

         17                of financial statements.  The top two

         18                pages are excerpt from the

         19                controller's reports.  One is for

         20                calendar year, 2007, which must be

         21                used unfortunately as yet no audit

         22                report available for 2007.  And the

         23                other is from the August 2008 report.

         24                The other two pages are excerpt from

         25                the 2005-2006 financial report of the


 00031

          1                city.  All four pages show the

          2                statement of operating surplus or

          3                deficit.  In this case all four years

          4                show operating surpluses, 644,631.28

          5                in 2005; six million, seven hundred

          6                and ten thousand, ten dollars and 72

          7                cents in 2006; four million, four

          8                hundred and forty-six thousand, six

          9                hundred, 59 dollars and twenty-one

         10                cents in 2007.  These three-year

         11                surpluses total 11 million, eight

         12                hundred and one thousand, three

         13                hundred and one dollars.

         14                     The top sheet shows revenues are

         15                ahead of expenses through August,

         16                2008, in the amount of seven million,

         17                six hundred and seventy-nine thousand,

         18                seven hundred and sixty-five dollars

         19                and seven cents.  If that ratio holds

         20                to the end of the year, the four

         21                surpluses will total 19 million, four

         22                hundred and eighty-one thousand,

         23                sixty-six dollars.  So why on earth do

         24                we need to borrow 6.1 million dollars?

         25                Why would this city want to pay


 00032

          1                interest on 6.1 million dollars for

          2                18 years.  Let's pay the loan from the

          3                surplus which you will note doesn't

          4                seem to speculate about additional

          5                millions that may come to the city if

          6                the Single Tax Office ever gets their

          7                accounts straight.  I urge you to vote

          8                against this increased borrowing.  The

          9                financials appear to show that we have

         10                enough money to payoff that loan and I

         11                believe that's what we should do and

         12                start paying down our debt.

         13                     Thank you very much.

         14                     MR. MCGOFF:  Thank you, Mrs.

         15                Schumacher.

         16                     Any other speakers?

         17                     I hereby declare this public

         18                hearing closed.

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 00033

          1                C E R T I F I C A T I O N

          2

          3

          4           I HERBY CERTIFY that the proceedings and

          5     evidence are contained fully and accurately in

          6     the notes taken by me at the hearing of the

          7     above-captioned matter and that the foregoing is

          8     a true and correct transcript to the best of my

          9     ability.

         10

         11

                                        _________________________

         12                            Amelia Nicol

                                       Official Court Reporter

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